 "New Zealand to slash defence spending by 6.6 per cent amid defence challenges")
Despite New Zealand’s armed forces grappling with ageing equipment, personnel shortages and ambitions for a more significant regional role, the conservative government plans to cut military spending by 6.6 per cent, according to the defence minister’s office.
Defence Minister Andrew Little said that the proposed defence budget for the year ending in June 2025 will drop to NZ$4.95 billion ($3.03 billion), down from this year’s NZ$5.3 billion. The new budget, set to be presented on May 30, will reduce New Zealand’s defence spending to 0.9% of GDP, compared to 1% in the current year.
These cuts come amid government reports highlighting issues with outdated equipment and difficulties in hiring and retaining military personnel. Despite these challenges, the government aims to enhance the condition of the armed forces, undertake more regional and global missions, and explore the possibility of joining the AUKUS defence pact.
“I have been consistently clear that Defence will need more funding and am committed to supporting Defence,” Defence Minister Judith Collins told Reuters in an email, adding that big decisions on capital spending would be made after the completion of a Defence Capability Plan in June.
The cuts put New Zealand at odds with many of its traditional partners, such as Australia and Japan, which are ramping up spending in response to China’s growing military presence in the region.
Japan, which spent roughly 1% of GDP on defence as recently as 2022, will hit about 1.6% next year and aims to reach 2% by 2028. Australia will go from 2% to around 2.4% over the next decade.
Impact Shorts
View AllNew Zealand Prime Minister Christopher Luxon has worked hard to increase international engagement since taking office, including sending a maritime security team to the Red Sea. But falling revenue and rising debt have hamstrung the country’s ability to boost defence spending even as it says it is concerned about China’s growing presence in the Pacific and a worsening global security environment.
“The government has made it clear that it wants to spend more on defence and be seen to be doing more in the defence space, but decades of sustained underinvestment mean chickens are coming home to roost,” said David Capie, director of the Centre for Strategic Studies at Victoria University. “It’s not going to be fixed in one budget; it’s going to take significant and sustained investment over a long time.”
The country’s Finance Ministry presents the government budget, which parliament must approve. Finance Minister Nicola Willis said in an email that the government had announced NZ$571 million of new spending over the next four years.
The government noted that defence force spending in the current year had been significantly boosted by large capital expenditure on new C-130J aircraft. The government has said it wants to cut spending on average by 6.5% to 7.5% across all agencies.
With inputs from agencies.
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