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New Zealand will double its defence budget to 2 per cent of GDP within the next 10 years, prime minister Christopher Luxon announced on Monday, a sharp reversal of direction from last year’s cuts to military spending.
The defence budget will be increased by NZ$9bn (£3.9bn) over the next four years as part of the government’s new Defence Capability Plan, which outlines major investments to strengthen military readiness at a time of growing global instability.
New Zealand currently spends just under $5bn a year on defence, the equivalent of just over 1 per cent of GDP. The extra $9bn injection announced on Monday will be on top of baseline defence spending in the upcoming budget, due to be tabled in May.
The new spending includes investments in strike capability, an uncrewed aerial system, replacement helicopters, and life extension for New Zealand’s aging frigates. The country also plans to replace its Boeing 757 aircraft after repeated technical failures left diplomatic delegations stranded overseas.
“New Zealand and our allies and partners across the world are no longer in a benign environment,” Mr Luxon said at a press conference in Wellington. “There can be no prosperity without security, and defence is one vital component of that picture.”
The government’s move follows last year’s national security review, which warned of rising risks from the climate crisis, and intensifying competition between Western powers and China and Russia. The review called for stronger military ties with Indo-Pacific nations and a renewed focus on regional stability.
New Zealand’s military has long faced challenges from years of underfunding, leading to high attrition and the temporary decommissioning of several naval vessels. Last year the defence budget was cut by just over 6 per cent despite the country’s ambitions for a greater regional security role.
While attrition has eased slightly in the past year, capability gaps remain, analysts say.
The government says the new investments will support both economic security and international partnerships.
“We are investing in defence not only to protect New Zealanders and our interests,” Mr Luxon said, “but also to ensure we remain a credible partner in our region and beyond.”
