2. Defence considers the following expenditure in FY 2003/4 as unforeseeable and unavoidable (Table 1):

a. Peace Support Operation in DRC (MONUC II Phase III). Defence is

committed to expend an additional RM 291,369 and thus requested this amount.

b. African Mission in Burundi: AMIB. Defence is committed to expend

an additional RM 458,031 and thus requested this amount.

c. Operation SUNRAY in DRC Bunia. Defence spent an additional RM

22,726 and thus requested this amount.

d. Operation INKUNZI in Algeria. Defence spent an additional

RM 2,736 and thus requested this amount.

e. General Elections as Requested by SAPS. Defence estimates an

expenditure of RM 16,429 to assist SAPS as requested during the general elections and thus requested this amount.

3. The deployments reflected in paragraphs 3 a to d are considered unforeseeable because aspects of these deployments such as mission, objectives, location and force levels were unknowable during the preparation of the FY 2003/4 budget. These deployments are considered unavoidable being ordered by the President in the national interest. The assistance to the SAPS was not foreseen by Defence during the preparation of the FY 2003/4 budget but has subsequently been requested by SAPS. If the President orders this assistance the related expenditure will be unavoidable.

4.The total additional funding requested for operational deployments was

791,291. The request was partially satisfied by an additional allocation of

500. The shortfall is thus RM 291,291.

5. Defence has estimated the following carry-through costs for operational deployments in FY 2004/5:

a. Peace Support Operation in DRC (MONUC II Phase III). Defence is committed to expend an additional RM 315,549 and thus requested this amount in the FY 2004/5 budget cycle.

b. African Mission in Burundi: AMIB. Defence is committed to expend an additional RM 564,378 and thus requested this amount in the FY 2004/5 budget cycle.

6. The total requested for carry-through operational deployments was RM 1 040. The request will be partially satisfied by an additional allocation of RM 300. The shortfall is thus RM 740.

7. The general international practice for funding operational deployments is:

a. The additional costs for an unforeseen deployment are not budgeted for. This is to avoid a provision that might not result in expenditure.

b. The additional costs for a deployment are provided by means of an adjustment budget.

c. If the deployment extends into a following financial year the additional costs are included in the budget baseline.

d. If the deployment is terminated during the financial year in question the unspent funds are surrendered.

e. The deployments are limited by affordability considerations.

8. The emergent local practice is to not limit deployments according to affordability considerations and to partially fund the additional costs of deployments with the expectation that Defence must compensate by:

a. Raising donations to fund the additional costs.

b. Reprioritising current activities and related expenditure.

9. The reliance on donors is risky because donors might not be forthcoming or may set conditions that may prove prohibitive for the specific expenditure requirements. Reprioritisation to compensate for the additional expenditure has serious implications for the production of combat ready forces for replacement of deployed forces or for further deployments. This is tantamount to throttling the goose that's laying the golden eggs! For example to reprioritise RM 291 worth of Defence activities could mean the termination of 15 sub-programmes and 3197 jobs. To reprioritise RM 740 worth of business would terminate 23 sub-programmes and 8 131 jobs. It is not sensible to reprioritise to this degree within a financial year. Such a degree of reprioritisation would only be feasible in the medium term.

10. Defence is required to reprioritise its FY 2003/4 and FY 2004/5 activities to compensate for the shortfall in funding for force deployments. This will have an adverse impact on the provision of combat ready forces for replacements of further deployments. A practice must be established where either additional funds are provided to Defence for the additional costs for deployments or deployments must be limited to what is affordable within the Defence budget baseline. Government must determine the force level limits for deployments and not exceed these. This can be based on affordability and/or capacity of Defence to provide forces. Defence must be funded for the additional costs for such deployments both for in-year deployments as well as multi-year deployments. Failure to do so will lead to a risk of unauthorised expenditure or an erosion of force producing capacity with a risk to continuity.