WELLINGTON, Jan. 30 (Xinhua) -- New Zealand's highest-ranking military officer admitted Wednesday that a reorganization to " civilianize" military posts had damaged perceptions of the armed forces and harmed personnel morale.
His comments came after the auditor-general described a fall in trust and reduced capabilities of the New Zealand Defence Force ( NZDF) as a result of bungled attempts to introduce the government- imposed cost-cutting reforms.
A report by Auditor-General Lyn Provost said the reforms, implemented by the government in September 2010, had produced only "limited success" in meeting their goals.
The reforms begun in 2010 resulted in 303 military staff being discharged 87 of whom were appointed to civilian jobs, while 218 were discharged with redundancy payments, said Chief of Defence Force Lieutenant General Rhys Jones.
"When combined with some of the conditions of service changes being considered at the same time, many within the Defence Force felt that we had broken a social contract with them," Jones said in a statement.
"We believe that the civilianization process had a detrimental affect on our peoples' perception of our organizational culture. This came through in higher rates of attrition, and lower morale," he said.
"However, the reality of militaries throughout the world, such as the United Kingdom and the United States, is that down-sizing is a fact of life. Our Defence Force hadn't had to deal with that for a while, so it came as a shock."
The NZDF had been trying to rebuild trust and confidence, and pay hikes last year were a significant part of that.
Rebuilding in key ranks and trades was being achieved through recruiting strategies, as well as organizational changes to lower attrition including reducing uncertainty, providing a sense of stability, and a clear vision of the future, said Jones.
"I am pleased to note that our latest internal staff survey results reveal that morale has improved for the third continuous quarter. It is yet to rebuild to levels of pre-civilianisation, we are nonetheless heading in the right direction," he said.
The auditor-general's report said the government had required the NZDF to meet three conditions: annual savings of 350 million to 400 million NZ dollars (293.13 million to 335 million U.S. dollars) by the 2014-2015 financial year; enhanced frontline capabilities and activities; and maintaining specified outputs.
Initially the civilianization project represented 16 percent to 18 percent of the overall defense budget of 2.25 billion NZ dollars for the 2010-2011 year.
In September 2010, the NZDF committed to convert 1,400 military positions into civilian positions, said the report.
"However, when NZDF told the government that it would convert 1, 400 military positions into civilian positions, it did so without knowing how many military positions it would need from 2015," Provost wrote in the report.
When the NZDF finally calculated how many and what kind of military staff it would need from 2015, it found that it needed more military staff overall and that some ranks and trades had surplus military staff.
"I consider that NZDF should have found out how many and what kind of military staff it would need before telling the government that it would convert 1,400 military positions into civilian positions," said Provost.
The NZDF planned for the civilianization project to save 20.5 million NZ dollars a year by 2014-2015, but staff in the Auditor- General's office found it would save just 14.2 million NZ dollars a year.
The NZDF's decision to move quickly to put the civilianization project into effect meant that it did not fully consider its potential effect on staff and it failed to address "the significant risks of the process."
One example of the effect on the NZDF specified outputs as a result of the reforms was a decrease in sea days available for inshore patrol vessels (IPVs), said the report.
"The IPVs did not sail the funded number of sea days in 2011- 2012 because of a shortage of staff and having to complete operational trials."
The main opposition Labour Party blamed the government for a " botched reorganization" that had caused more damage than it had benefits.
"Defence Force staff were left disillusioned that their loyalty and commitment was not reciprocated and they have been leaving in record numbers," Labour's acting defence spokesperson, Phil Goff, said in a statement.