Government to spend $571m on Defence at 2024 Budget

Friday, 10 May 2024

The Government will boost defence spending by $571 million for soldiers’ pay and military housing and hardware at the coming Budget.

Defence Minister Judith Collins visited the Burnham military camp, near Christchurch, on Friday morning to announce defence spending plans for the Budget, due to be delivered on May 30.

“Our people are at the front-line of New Zealand security in an increasingly unstable world, and an increasingly unstable world makes it essential that we retain our hard-working and well-trained people, who without hesitation deploy throughout the world to ensure New Zealand does more than just talk about doing the right thing,” Collins said.

“We need to stabilise the force and today's announcement of pay increases for our unified [sic] personnel is key to that.”

The Government has for months signalled that it would continue to invest in defence despite its efforts to cut $7.5 billion out of government spending, as it seeks to both wrangle high inflation but also afford tax cut promises made at the election.

Foreign Minister Winston Peters has also in recent weeks said partner countries - that he would not name - have made clear that New Zealand needs to change its “parsimony” with defence spending and pull its weight in an increasingly contested world.

The increased defence spending follows recent years’ Budgets which have pumped billions into the Defence Force, as it has struggled with high attrition, ageing assets, and bringing new assets - such as P8 Poseidon surveillance aircraft - into service. At the 2023 Budget, the Labour Government committed $419m to defence pay, and $328m for assets and infrastructure.

Of the $571m announced by Collins on Friday, $163m will be spent on improving salaries for defence staff and $408m spent on upgrading equipment and infrastructure.

Much of this would be spent in the coming four years. Some of this money would come from $99m of savings the Defence Force had found within its existing budget, including from projects ending, reducing international and domestic travel, and decreasing spending on contractors.

“This is the amount that we believe we can afford. But also, it is a significant improvement as well on the current remuneration package that defence has,” Collins said.

How much salaries would increase would be determined by the Defence Force executives, Collins said. She said she did not imagine the pay rises would be “going right to the top”.

The equipment the Government was committed to funding included new navigation and communication systems for the Air Force’s NH90 helicopters, and replacements for the army’s 40-year-old Unimog and Pinzgauer trucks that are commonly used during civil defence emergencies. Also funded would be a “cloud-based computer application” for the Defence Force to watch New Zealand’s maritime domain in real time.

“It is very important that we had the best real time information so that we're putting our resources we then need to, and our Navy and Air Force have to cover an enormous amount of area. So using satellite technology is a great thing,” Collins said.

Another logistics building at Linton Military Camp will be built, and 35 homes in Devonport will be leased for defence staff.

Also being upgraded was the Defence Force’s digital “classified environment”, for communication with partner countries.

Labour leader Chris Hipkins said the Government’s boost to defence spending would just “keep the lights on”. He characterised the announcement as a “little bit more money” compared to the billions Labour spent purchasing new Hercules airlift and Poseidon surveillance planes.

“Ultimately, this is business as usual, it’s less than the investment we made in defence last year,” he said.

“We know defence has a lot of catching up to do.”

After the Budget, Collins will receive a renewed defence capability plan, which would outline what defence assets the Government intends to acquire in the coming decades.

“I know that defence is going to need more, and I’m very happy to help them get that,” Collins said.