Tonight we are here to celebrate excellence in the defence industry. It is a time to acknowledge the industry that underpins our defence efforts and acknowledge the contribution you make.

It is also a time to lift our sights and look at where this excellence can lead. I forecast a great future for the defence sector. You have the capacity and capability to be a key contributor to the economic resurgence of New Zealand.

Why do I talk about economic resurgence? Because that is the goal of this Government. We have weathered the recession. Now it is the time to look at how we can raise our economy towards parity with Australia, and give us the services and lifestyle that we aspire to as a country.

The ambition is clear; the task will challenge us. We will need to harness the innovation, ambition and know-how of New Zealand companies, and encourage them to grow. Government is not a substitute for business. It is a catalyst and a support for business. This is the direction that we are taking.

The Associate Minister has talked to you about some of the issues facing defence and defence industries out for the next twenty-five years. The Secretary of Defence has updated you on how the Review is progressing. Tonight I want to tell you about why I see a bright future for your industry.

The first reason is that excellence that we are celebrating this evening.

Since becoming Minister, I have visited all the camps and bases, and seen first-hand our equipment and capabilities. Everywhere there is evidence of smart thinking, quality work and a determination to deliver the best results from often modest resources.

Let me give you an example. I was on board the delivery voyage from Whangarei of the first IPV, HMNZS Rotoiti. These are superb little ships - in fact, at 55 metres and 340 tonnes, not so little. They will be a tremendous asset to the Navy and to New Zealand. There is very substantial local content in these vessels. The workmanship and the innovation are a credit to all those involved.

I know that many companies have also been involved with the OPVs and HMNZS Canterbury. The reality is that these are all highly capable ships. Canterbury is already proving its worth, including delivery of relief supplies to Samoa. I visited the OPVs in Melbourne a few days ago and I am confident that we will be highly satisfied with them once they are in service.

Clever thinking is also in evidence in new technologies such as UAVs. The mini-UAVs developed here in New Zealand give soldiers a simple and effective way of looking over the nearest hill or building.  We do not need to spend millions of dollars to experiment with this technology - it is an area where good old "Kiwi ingenuity" can provide innovative and cost-effective solutions that can be tailored to what we actually require.

That excellence comes through in other areas, including the provision of goods and services. Our service personnel expect and deserve good quality places to live and work, food to eat and a whole variety of services from cleaning to banking to communications. Much of this is provided by local companies. The big ticket procurements may seem glamorous, but year in and year out the majority of the money is spent on all those essential elements that sustain a modern force.

A good example of this "back-room" innovation is the work we are currently doing with a major bank to trial a new invoice payment facility.  It enables government departments to offer early payment to their suppliers in exchange for a modest discount.

In effect, each supplier could choose to receive the discounted payment as soon as an invoice has been approved.  There are clear benefits here for business cash flow.

Suppliers will be able to confirm that their invoices have been received, when they are due to be paid, and will be able to choose early payment in order to meet other business commitments, such as payroll.

Suppliers should find the discount rate suitably attractive compared with the cost of alternative finance, if that is available.  This particular facility has been used in the commercial sector overseas, but not in government as yet.  We're leading the way.

I've described this at some length as it's a good example of what we had in mind when we included prompt payment initiatives as part of the SME package earlier this year.  I'm hoping that the trial leads to the uptake across the public sector.

There is also a considerable amount of infrastructure work under way at the moment. Project Takatini covers the redevelopments at Ohakea and Whenuapai. I am impressed with the quality of the facilities being provided to support the new helicopters. They will be in state of the art hangars with briefing rooms and crew spaces appropriate for 21^st century machines.

The second reason I forecast a bright future for you is the upcoming opportunities.

As you know, the Review is looking carefully at procurement. In particular, we want to look carefully at whole of life support, and ensuring that we leverage the capital spend to get the maximum benefit to New Zealand. If we are spending hundreds of millions of dollars on sophisticated technology, we want to ensure that we can support it, improve it and learn from it.

It is also becoming apparent during the Review that we have to be more innovative about how we manage our resources. This particularly applies to facilities and also to managing capabilities. There has been a pattern of deferring replacement of platforms and buildings until they are well past their economic life.  

The result is that we have ended up with buildings and other assets that are not fit for purpose and cost a lot to maintain. We will be looking carefully at how we break out of this cycle. There will be many opportunities where substantial life-cycle savings will be made. We will be looking to industry to work with us to realise these efficiencies.

These opportunities are not just confined to the NZDF. One of the exciting developments over the last year has been the relationship with Australia. This has been encouraged by both Prime Ministers, and you will have heard of the intention to develop specific Anzac capabilities.

These capabilities will be aimed mainly at how we can better support the South Pacific region. Whilst we do not yet have specifics, there will certainly be scope for New Zealand companies to be involved in developing these joint capabilities.

This warming of the relationship will also create wider business opportunities through breathing new life into CDR. Australia and New Zealand have always been the closest of allies, but there is a new focus on just how mutually important the relationship is. This is driven by the dynamics of the wider Asian region, which is vital to us all in both a security and an economic sense.

Australia released its own White Paper earlier this year. This sets ambitious defence goals.  There will be opportunities for New Zealand defence industries to provide services to Australia, and partner with Australian companies to meet needs on both sides of the Tasman.

There is currently great interest in defence. The media have covered operations as diverse as our contribution to the collective effort in Afghanistan through to the fantastic work done by the NZDF to assist Samoa and Tonga in the wake of the tsunami tragedy. This has reminded all New Zealanders of just how important and relevant the NZDF is.  

Standing behind the NZDF are you, our defence industries. Our ability to have responsive and deployable forces also rests with you.

I welcome the many submissions to the Defence Review received from industry. These will help us as we set a long-term path to ensure we have defence capabilities that are effective and supportable. The excellence that will be showcased later this evening stands as a showcase of your industry.

Can I thank you for the exceptional service you have given to the New Zealand Defence Force. I look forward to your bright future as you take your place in the economic growth through excellence that is our aspiration for the whole country.