Photo: RNZ / Samuel Rillstone
More than half a billion dollars is going to defence in this year's Budget to improve pay for the frontline and upgrade equipment.
Defence Minister Judith Collins made the pre-Budget announcement at Burnham Military Camp near Christchurch on Friday.
The overall Budget boost is $571 million, to be mostly spent over four years, with the exception of $19m of capital funding, which will be allocated to the 2028 to 2031 financial cycle.
"Of that, $163 million is for increasing the pay of our hard-working women and men of our New Zealand Defence Force - the people who do us proud at home and throughout the world.
"Our people are at the frontline of New Zealand's security in an increasingly unstable world and that increasingly unstable world makes it essential that we retain our hard-working and well-trained people who without hestitation deploy throughout the world," Collins told her audience.
She said it would be "a significant improvement" to current pay rates.
Collins believed the Defence Force was in "a pretty dire state" when she took over the portfolio late last year in terms of morale and attrition.
Attrition had dropped since last December, Collins said, with remuneration, more deployments and a sense that the government "had their back" contributing.
She had already commented in the past that attrition rates must be addressed "with urgency".
"We need to stabilise the force and today's announcement of pay increases for our uniformed personnel is key to that."
She would like to see the attrition drop to a 7 percent rate which would take a while to reach.
Judith Collins chats with some Defence Force members during her visit to Burnham military camp near Christchurch. Photo: RNZ / Rachel Graham
Another $408m will go toward projects and infrastructure.
The project funding will be broken down into $127m in operating funding and $281m in capital funding.
A small portion of the new funding has been clawed back from savings within the New Zealand Defence Force.
Collins said $99m of the $107m in savings is from the New Zealand Defence Force, which will be reinvested into remuneration and the other $8m was found within the Ministry of Defence.
Those savings have come from projects ending and "a reduction in international and domestic travel, as well as a decrease in spending on contractors and consultants", Collins said.
Any major projects already planned and underway are expected to continue.
"Subject to Cabinet approval, a project will begin to replace the Unimog and Pinzgauer trucks, the NZDF's workhorses, and most frequently deployed vehicles.
"Replacement vehicles will have integrated communications that will enhance interoperability with regional and global partners, such as Australia, Canada, the United Kingdom and the United States," Collins said.
Collins said people would most recently have seen the current vehicles in use to assist communities during Cyclone Gabrielle.
Some vehicles had been used for 40 years and it was time they were replaced with vehicles which would complement those used by our allies and "would be a crucial step in this challenging world we live in".
One of the Defence Force's Unimogs. Photo: Robin Martin/RNZ
The other projects for which funding has been allocated through Budget 24, subject to Cabinet approval, are:
- The next phase of an upgrade to the NH90 helicopter navigation systems and radios;
- upgrading the regional supply facility and logistics model at Linton Military Camp;
- modernising devices and productivity tools;
- upgrading some digital services; and
- improving national maritime domain awareness.
Collins said retaining personnel and having them equipped to do their jobs is vital to ensure "New Zealand is ready, willing and - crucially - able to play its part internationally".
"NZDF personnel are at the frontline of New Zealand's security but they cannot do their jobs without the right equipment and conditions.
"The world is increasingly unstable. We have only to look at events in the Ukraine and Middle East to see how quickly people's lives can change," Collins said.
"This Budget announcement is a signal that New Zealand is ready to step up and play its part to protect the freedoms that so many of us take for granted."
The next step for defence is the Capability Plan, which Collins said "will shape our future investment decisions around the equipment we need as we step up".
There is renewed interest in defence spending at present because of talks the government has been having on possibly joining Tier 2 of the AUKUS agreement between the US, Australia and Britain.
Foreign Minister Winston Peters has repeatedly played down the prospect, saying New Zealand hasn't been invited to join and he doesn't know what it would entail.
However, if New Zealand did decide to join, it is expected more spending on defence would be required from allies.
On Thursday, Finance Minister Nicola Willis gave a major pre-Budget speech in the Hutt Valley, and in the process ruled out an austerity Budget and reaffirmed her commitment to tax cuts for most New Zealanders.