Australia has been "very open and frank" about the need for New Zealand to have a reliable Defence Force, according to the Chief of Defence Force.
Australia and New Zealand's Defence Ministers agreed in Melbourne this month to increase integration between the military forces.
Air Marshal Kevin Short appeared before Parliament's Foreign Affairs, Defence and Trade Select Committee on Thursday morning, and said Australia was "reshaping" its Defence Force for "a singular threat from a singular direction".
"They are putting a huge amount of effort into that and they are making decisions every day about how they will equip their force and where they will ... compromise and put money somewhere else. So to put money into longer range, more accurate weapon systems they are making sure that their ships have those systems fitted. In other short range or defensive systems ... they're saying 'no, that's a lower priority, we won't do it'. So they're shifting their priority."
New Zealand had discussed its position with Australia not to have a singular "threat" driving what it did with Australia, Air Marshal Short said.
"So in discussions with Australia, they understand that, but they also want to make sure that on their eastern flank, that there is a reliable and capable Defence Force, which they can ... rely on.
"We can say until we're blue in the face 'we think we've got the capability', 'we know how to respond', 'we know what you want', but it's actually always measured by our friends and allies.
"Australia has been very open and frank about what they see and what they would like to see."
Possible spending cuts
As the coalition government looks to save $1.5 billion annually across the public sector, the Ministry of Defence has been asked to propose 7.5 percent in savings, while the Defence Force has been asked to find 6.5 percent.
Speaking at the select committee this morning, Defence Minister Judith Collins said she had made her expectations for the Defence Force clear.
"We have to look for savings, that's why I've said to Defence 'I don't want you doing anything that's not actually about your business ... I don't want you exploring your personal wellbeing that much, except during your own time'.
"I need everything being focused on getting the job done."
Collins, however, also stressed the need for further investment in the Defence Force.
"Because everything that defence buys is expensive and it's just the nature of the beast, basically ... and of course, our personnel are very highly trained and very well regarded. And there has possibly been quite a lot of poaching going on of our people by other friendly nations and it's really important that we look after them."
Air Marshal Kevin Short said he had presented the potential impact of a 6.5 percent cut in spending on the Defence Force to Collins.
"We're looking at all areas line by line and we have presented to the minister ... we haven't had the detailed discussion which says to this point we can absorb some of the savings, but to absorb more than what I call the trimming ... trimming from administration, travel, contractors, that sort of thing ... we start to get into not doing maintenance on infrastructure, not doing maintenance on our major platforms."
To go further, Air Marshal Short said, the Defence Force would have to "divest ourselves of capability".
"We're presenting that solution, but showing ... very clearly the impact."