WELLINGTON, New Zealand — New Zealand’s Defence Force and intelligence agencies are on track to receive almost $4.3 billion (US$2.5 billion) in this year’s budget, Finance Minister Nicola Willis announced on May 28.
The NZDF is among the handful of government agencies exempt from trimming their budgets by 2% this year.
Their funding includes $2.3 billion capital and $1.2 billion operating funding to retain NZDF personnel — currently more than 15,000 people — increase numbers in key areas and improve accommodation and training facilities at military bases across the country. Intelligence and communication security services receive $156 million.
The operating funding includes $120 million over four years to bring NZDF pay closer to market rates and $174 million to meet increased deployment costs.
The Maritime Fleet Renewal program includes $143 million capital and $72 million operating costs over four years for critical maintenance on the Royal New Zealand Navy’s (RNZN) two Anzac-class frigates and the strategic sealift vessel HMNZS Canterbury, while developing options for their replacement.
The RNZN is also funded for introducing two types of drones. One will be used in the south-west Pacific to provide long-duration surveillance data, while the other is polar-capable and will conduct missions from naval vessels in the Southern Ocean. Sustaining the Anzac frigates, in service since 1997 and 1999, respectively, includes $14.9 million for communications upgrades.
There’s $1.5 million of capital funding, alongside $16 million of operating funding, to begin work on the Technology Accelerator program, which focuses on connecting industry with the NZDF to solve specific military challenges.
Major defense projects include $2.6 million on the maritime helicopter replacement and $60.5 million on a Future Air Mobility Capability, a figure set to more than double in the next fiscal year.
Supplying the Bushmaster armored vehicles with communications gets $13 million and $25.6 million goes toward utility vehicle replacement costs.
Willis said this is the second year of the Defence Capability Plan (DCP), expected to average $85.5 million per year over the next four years. She cautioned that the world is more volatile than ever. “The rules-based global system is under strain. Countries are boosting their spending on defense.”
Tucked into the budget is $42 million for the clean-up, salvage and other costs — previously estimated at $32 million —arising from the sinking of HMNZS Manawanui, due to human error, in October 2024.
Nick Lee-Frampton is the New Zealand correspondent for Defense News.