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 Post subject: Budget 2015/16
PostPosted: 25 Feb 2015, 15:50 

Joined: 07 Apr 2008, 11:50
Posts: 4256
I have just quickly skimmed through the defence budget - http://www.treasury.gov.za/documents/na ... terans.pdf - the good news is that quite a lot of capital expenditure is planned (ships, planes, army base rennovation, etc) and there is provision for achieving the Defence Review's "Milestone 1" in the short term.

So guys (and girls) we have some concentrated reading and analysis to do to answer the big question: Is there enough money to at least stop the decline of the SANDF?


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 Post subject: Re: Budget 2015/16
PostPosted: 25 Feb 2015, 16:46 

Joined: 07 Dec 2009, 06:30
Posts: 952
i like 2 squadrons and 85 combat school forecast. cant wait to print those and go in detail. thanks for the link rtd
could it be that there are big things coming to those units or is it just that the aircraft will be needing a lot of maintenance in 2017?


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 Post subject: Re: Budget 2015/16
PostPosted: 25 Feb 2015, 17:40 

Joined: 07 Apr 2008, 11:50
Posts: 4256
micfradus wrote:
i like 2 squadrons and 85 combat school forecast. cant wait to print those and go in detail. thanks for the link rtd
could it be that there are big things coming to those units or is it just that the aircraft will be needing a lot of maintenance in 2017?


The major capital items for the SAAF in this budget include "light and medium transport aircraft".
The Gripens and Hawks simply run on piles of cash, though the acquisition of "precision guided weapons" (read "missiles") for the combat aircraft is also mentioned.


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 Post subject: Re: Budget 2015/16
PostPosted: 25 Feb 2015, 18:17 

Joined: 07 Dec 2009, 06:30
Posts: 952
I might be reading very wrong then. This is what I get so far so please give me a hint in the right direction:
“It has budgeted for medium and light transport aircraft, a new generation mobile communication capability, and precision guided air force ammunition for air defence. These acquisitions are reflected in spending in the Air Defence programme in 2016/17 and 2017/18” program 4. Numbers look steady to me across the board.
Objectives: program 4
• Defend and protect South Africa and its airspace over the medium term by providing:
– 4 helicopter squadrons and 1 combat support helicopter squadron per year
– 3 medium transport squadrons, which will include 1 VIP squadron, 1 maritime and transport squadron, 1 light transport squadron and 9 reserve squadrons per year
– 1 air combat squadron per year
– 24-hour air command and control capability.

Biro and hotel on this if I’m reading right: For maritime defence, program 5: the department plans to acquire a hydrographic vessel and offshore patrol vessels, upgrade frigates and static communication for the navy, and replace heavyweight torpedo capability. Spending is on departmental agencies and accounts in the Maritime Defence programme in 2016/17 and 2017/18. These numbers go up but are still steady to me.
Objectives program 5:
• Defend and protect South Africa and its maritime zones over the medium term by providing:
– a surface combat and patrol capability of 3 frigates, 1 combat support vessel, 2 offshore patrol vessels and 3 inshore patrol vessels in each annual operational cycle
– a sub-surface combat capability of 2 submarines in each annual operational cycle
– a mine warfare capability of 2 vessels in each annual operational cycle to ensure safe access to South Africa’s harbours, and mine clearance where required
– a maritime reaction squadron capability, comprising an operational boat division, an operational diving division and a naval reaction division in each annual operational cycle
– a hydrographic survey capability to ensure safe navigation by charting areas and to meet international obligations

When I look at Table 19.C Largest defence force units, the numbers are going up, but the only thing that jumped at me was the two units I mentioned as they are forecast to double from 24 320 to 52 551 and 28 233 to 46 055 respectivey.


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 Post subject: Re: Budget 2015/16
PostPosted: 25 Feb 2015, 19:07 

Joined: 07 Apr 2008, 11:50
Posts: 4256
About the new heavyweight torpedo (for the submarines of course), I found this article from a few years ago - http://defenceweb.co.za/index.php?optio ... Itemid=106

I haven't had time yet to go through the tables closely. As far as the Gripens and Hawks units getting a large increase in their operational budgets, it's about time! (As I said earlier, they run on large piles of money.)


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 Post subject: Re: Budget 2015/16
PostPosted: 25 Feb 2015, 19:16 

Joined: 07 Dec 2009, 06:30
Posts: 952
that is interesting link. i also saw a significant jump in expenses for VIP transport, 21sq might be getting a new toy?

apart from that, ive looked till im cross eyed now on biro ipv mention. all i see is offshore..i haven't printed the pages yet and my head is sore from tilting. if someone else has seen it mentioned, let us know please. maybe we get 6 off shores :lol: and hotel

never mind. it was right infront of my eyes....lol, to much numbers looking


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 Post subject: Re: Budget 2015/16
PostPosted: 25 Feb 2015, 19:50 

Joined: 07 Apr 2008, 11:50
Posts: 4256
About "precision guided air force ammunition for air defence", that's the A-Darter of course. It's about to go into production and the SAAF is widely reported to be the launch customer.

Given a new torpedo for the subs we might get to see (or rather not see, just read about) a live-fire excercise or two using some of the old stock. Many bubbleheads go through their entire careers without ever having a chance to blow something up, our guys might just be getting lucky sometime in the not too distant future.


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 Post subject: Re: Budget 2015/16
PostPosted: 26 Feb 2015, 00:34 
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Joined: 29 Jun 2004, 21:13
Posts: 1165
Location: Johannesburg, South Africa
I don't know guys, despite some promising-looking but not guaranteed increases for 85 CFS and 2 Sqn in 2017/18, the majority of this budget looks pretty bad for the SAAF.

First, the overall SANDF budget has increased by only R1.7bn, or around 4%, which is less than inflation. Added to the fact that the Rand/Dollar exchange rate has decreased by another 11% over the past year and it means that for most units it's already an effective decrease in operating budget. The only positive aspect here is the lower oil price lowering the cost of fuel.

Projects Biro, Hotel, Metsi and Kiepie were mentioned last year too, they should've been at the acquisition stage already. But Armscor, National Treasury and the SANDF all seemingly have vastly different understanding of what it takes to acquire new equipment. Both appear to think they can suddenly give the SAAF a small extra allocation out of the blue and expect acquisitions to happen immediately, but the SAAF is forced to design its project requirements to budget, meaning it can't progress far on the RFIs and other documents until it knows exactly how much it can get...

Speaking of the SAAF, its budget is cut by over R300 m this year, from R7.17 bn to R7.04 bn. Transport and Maritime gets the biggest cut, losing 43% of its 2014/15 budget from R1.81 bn to R790 m, perhaps because the Kiepie/Metsi projects didn't go ahead. The Air Combat Capability subprogramme gets just R1.4 bn, still lower in 2015 Rands than the 2012/13 budget.

On top of all this, only 6500 flying hours total are budgeted for the entire SAAF, down from the average of 11 500 hours each year in 2012 and earlier. Yet the SAAF is expected to do more than ever, especially with ACIRC.

Plus, the actual operating budget for each service has been decreased in real terms, because personnel costs have gone up more than expected and the SANDF has been told to absorb the costs by shifting funds from the goods and services budgets.

More funding next year for Biro and Hotel on the SAN side is welcome, but it's still not enough and much, much later than initially planned. Nor does it appear the extra funding is permanent, it starts tapering off in 2017/18 because the National Treasury believes that the SANDF is adequately funded and needs only extra allocations now and then for capital payments. The additional cost of operating new capabilities is not considered.

Purchasing A-Darters is required of the SAAF as part of the development programme and it's a great missile, while the acquisition of the DM2A4 Seehecht (said to be the torpedo mentioned) will give the Heroine class subs a potent new weapon. But both the SAAF and SAN desperately need the training money to actually fire a few of these things and get their respective crews not only qualified but proficient on the use of the new weapons.

This sort of disconnect was highlighted when the Finance Minister boasted in his speech about how he was placating the Defence Minister by allocating so much money to force employment, but the actual allocation is just R200 m more than last year. That's about what the SANDF is wasting on all those Cuban technicians they just brought out.

Then there's the long term outlook in terms of the Defence Review. At Armed Forces Day, the Defence Minister was adamant that a scaling back of the SANDF's commitments in Africa was not even on the table. In her words, the money 'would be found'. Yet in 2015/16 the cap on government expenditure has been reduced by yet another R25 billion to try to get our deficit under control and there is so little extra money that the state will need to sell off assets to pay the money it has promised to Eskom. With a growth rate of just 2%, growing to 3.5% in two years, there simply is not an extra ten or twenty billion Rand for the SANDF on the horizon any time soon.

In sum, the picture is bleak. Yet again, a year has gone by with dire warnings about SANDF underfunding and not a single thing has been done about it. After being told again and again how underfunding was destroying the SAAF's capabilities, the response was not to increase the SAAF's budget, but to reduce it. It's all a bit mind-boggling.

I hate to admit it, but I'm more pessimistic about the SANDF and its future now than I have ever been before. I do not believe that the force is led by responsible civilian leadership.


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 Post subject: Re: Budget 2015/16
PostPosted: 26 Feb 2015, 00:57 

Joined: 07 Dec 2009, 06:30
Posts: 952
thank you darren, that was very sobering.
lets hope then that "funds are found"


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 Post subject: Re: Budget 2015/16
PostPosted: 26 Feb 2015, 01:53 
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Joined: 03 May 2005, 08:40
Posts: 3478
Location: New Zealand
As far as I can see the writing's on the wall for the SANDF and it reads "exit". :(

_________________
A plan is simply a basis for change.


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 Post subject: Re: Budget 2015/16
PostPosted: 26 Feb 2015, 06:13 

Joined: 03 Mar 2008, 08:21
Posts: 1581
I am not impresed by the budget. Not enough for training and maintance. The navy nearly went broke last year and our budget has badly gone up shell the rand has become weaker.


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 Post subject: Re: Budget 2015/16
PostPosted: 26 Feb 2015, 16:26 

Joined: 08 Mar 2009, 05:05
Posts: 3549
Location: Canada
H1017412 wrote:
As far as I can see the writing's on the wall for the SANDF and it reads "exit". :(

Get rid of the subs, get rid of Gripen's and fix or get rid of that damn A109, redistribute the money before they actually drown.
Next up on the chopping block, the Hawks?


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 Post subject: Re: Budget 2015/16
PostPosted: 26 Feb 2015, 17:06 
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Joined: 29 Jun 2004, 21:13
Posts: 1165
Location: Johannesburg, South Africa
The Hawks really have no value without the Gripens, if you get rid of the one you might as well ditch the other. But leaving the SAAF without a fighter capability is quite unthinkable.

The saner option, IMHO, would be to reduce the SANDF commitment to Africa to being no more than 2 reinforced battalions maximum as a hard limit and reduce the size of the standing army. That'll free up a ton of money.

The only long-term fix is to get the structure to a point where the cost of personnel is no higher than 40% of the budget, with 30% spent on operations and the other 30% on acquisitions. This is going to require a combination of a higher budget, drastic changes within the SANDF including a total overhaul of its HR policies and the willingness to demobilise those soldiers no longer contributing value.

I re-read the 1998 Defence Review again recently. What I found very interesting was the authors' statement that the force design they were recommending was, at the time, unaffordable, but that it would become affordable within the next few years as the SANDF personnel profile was fixed in line with stated SANDF policy:
Quote:
9. The affordability of the force design, which is central to its implementation, is subject to certain assumptions and qualifications. The long-term sustainability of the design requires a continuous investment in the periodic upgrading and replacement of equipment. The costing of the design thus incorporates annualised upgrade and replacement costs over the life span of the equipment. This is based on realistic assumptions, under present conditions, of the anticipated life span and cost of such equipment. Since the life span of major equipment is measured in decades and many replacement projects will commence many years hence, it is impossible to predict with absolute accuracy the actual annualised cost of equipment.

10. The process further assumes that the current imbalance in the so-called "tooth-to-tail ratio" of the SANDF will be corrected by the transformation process, thus releasing a greater portion of the budget for combat capabilities. The ratio on which the calculations are based is an estimate of the anticipated result of transformation.


It also reminded me that the government had committed to keeping the defence budget at or around 1.5% of GDP as a baseline, even though the actual figure has been at around 1%-1.2% since then, and how ambitious even the less-preferred force design was.

I wrote about this very topic in this month's FlightCom/SA Flyer, if anyone's interested, but in short the SAAF of today lacks many of the capabilities seen as being absolutely non-negotiable core capabilities in the more affordable Option 2 of the 1998 Defence Review. Most importantly, it's missing medium range maritime patrol aircraft, aerial refueling and EW aircraft.

As I said before, this country's civilian leadership fundamentally does not understand defence.


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 Post subject: Re: Budget 2015/16
PostPosted: 26 Feb 2015, 18:24 
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Joined: 12 Jun 2011, 14:21
Posts: 2593
Darren wrote:
As I said before, this country's civilian leadership fundamentally does not understand defence.
No need for me to add my own opinion on the politics within SA, I think they are well known here already. Suffice to say I agree on the conclusions you too have reached.

Thank you for separating the wheat from the chaff and dissecting that defence budget. A percentage of 1% - 1.2% of GDP? That I was unaware of, it's suicidal! In the UK it's at 2% of GDP and that is considered the minimum. Spare a thought for the £100 billion Pound Sterling that will be needed to replace Trident within the next 10 years (UK submarine based nuclear deterrent, 4 subs, 120 nuclear warheads). I digress.

Geez guys - there are some mindboggling tough decisions for the SANDF to make. Personnel costs are obviously the killer in SA's case. And yes, your 'government' will have to decide, is it defence or is it jobs for cadres and comrades of a bygone era. Without the right political mind-set, nothing in terms of your military will ever come right.


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 Post subject: Re: Budget 2015/16
PostPosted: 26 Feb 2015, 20:45 

Joined: 03 Mar 2008, 08:21
Posts: 1581
Why are we buying farming supplies? All so why is air force CnC getting such a big increase. Surely the transport wing needs that money. Why is the navies HR getting a increase well the logistics is getting a cut.

There are many more whys. Not only is the budget small but the spending is confusing.


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