Defence Force cuts: 'We're already operating on the smell of an oily rag'

A Defence Force employee says proposed cuts to its civilian workforce to fill a $30 million budget hole as "a real kick in the guts".

The New Zealand Defence Force (NZDF) has confirmed it is likely to cut jobs, and halt pay increases and work programmes in the face of a "largely uncontrollable" budget shortfall that initially swelled to more than $130m.

In an email to all staff on Wednesday, NZDF management invited expressions of interest for voluntary redundancy from its civilian personnel, who were set to bear the brunt of the organisation's fiscal woes.

If you are affected by the NZDF cuts, please get in touch: news@rnz.co.nz

Chief of Defence Force Air Marshal Tony Davies told staff it had to reprioritise its budget to ensure "ships, aircraft, equipment and personnel ready to respond where needed".

"The international security environment means it is essential that we continue to deliver our core military activities."

He said although it had found savings within its operating budgets, it was still facing a $30m deficit.

"We have made the difficult decision not to grow the Regular Force, which means while we will continue to recruit and train, we are not seeking to increase the overall numbers in uniform in the next year."

Because of this, reducing its civilian headcount was the likely upshot.

It was also revealed there would be no remuneration increases for civilian staff or health practitioners.

Based on its 2023 annual report, the NZDF employs a total of 3067 civilian personnel.

'Incredibly reliant on civilians'

An army officer told RNZ anonymously the immediate reaction "within my sphere of influence is of high concern".

"I am currently working the equivalent of three full time equivalent roles.

"Obviously I am not the only one in this situation, but particularly of late we have been incredibly reliant on civilians to even maintain some semblance of baseline capability, taking on well above and beyond their job descriptions."

The officer said they had not spoken to any civilian staff, but believed the move would be "a real kick in the guts for them".

They also feared cuts to military operations would be "devastating for any form of response, whether domestic or international".

"We're already operating on the smell of an oily rag."

Before May's Budget, NZDF leaders warned MPs the government's sweeping cuts to the public sector would have an impact on its core front-line services after it was asked to find 6.5 percent of savings.

In Davies' email, he said rising costs within the military space - underlined by claims ammunition costs had risen 600 percent since 2020 - had hit the sector hard.

Fuel costs per litre had almost doubled during the same period, Davies said.

"This problem is for the NZDF to solve, and we are facing some challenging months ahead."

Base salary increases for the uniformed workforce had also been put on hold.

The government will inject $571 million into defence spending to better remunerate servicepeople and improve defence equipment and infrastructure.

An NZDF spokesperson said the Budget - that allocated a total $571m to the Defence Force - included $163m of additional funding to improve the pay and allowances for uniformed military personnel.

"The NZDF acknowledges that this is difficult news for staff.

"It is committed to providing support, answering questions from staff and hearing concerns as the processes are worked through."

Elsewhere, the NZDF were considering other cost saving measures including managing leave liability down, restricting civilian recruitment to essential positions only, converting contractors to employees where it financially makes sense, and disestablishing some vacant positions.

Developments also come amid pay bargaining between NZDF leaders and with two unions, with negotiations with a third union to happen in the coming months.

"The NZDF has met with all the unions, which represent about a third of the civilian staff, to ensure they have a full understanding of the NZDF's position.

"It will continue to engage with the unions and employees who are members of the unions in accordance with the collective agreements and other legal obligations."

NZDF leaders will be holding a stand up "town hall style meeting" for staff at it s Defence House headquarters in Wellington on Thursday.

Camp and base visits were to follow in the coming weeks.

Defence minister Judith Collins said in a statement the cuts were an operational matter, so it would not be appropriate for her to make a comment.

"The men and women of the NZDF do a great job protecting New Zealand and its interests but these are tough economic times, and everyone is being asked to look at everything to ensure all funding is used to best effect," she said.

"The frontline is the priority, and I am confident NZDF leadership will lead their people through what I know is a challenging process."