New Zealand plans to significantly increase its defense budget to reach 2% of its GDP

On Monday, New Zealand announced an increase in defense spending by NZ$9 billion (approximately $5 billion) over the next four years, with a goal to nearly double this expenditure to 2% of GDP within the next eight years, amid escalating global tensions.

Prime Minister Christopher Luxon emphasized the need for enhanced defense funding to secure the nation’s prosperity during a press conference where he unveiled the Defence Capability Plan.

“We are no longer in a favorable global environment alongside our allies and partners,” he stated. “While my primary concern is the economic well-being of our country, security is essential for prosperity, and defense plays a crucial role in that equation.”

The Defence Capability Plan outlines the allocation of NZ$9 billion over the next four years to strengthen defense capabilities, in addition to baseline spending expected to be detailed in May. This new funding represents a significant increase from the nearly NZ$5 billion allocated for the Defence Force in 2024/25.

New Zealand’s first national security review in 2023 highlighted the necessity for increased military investment and reinforced partnerships with Indo-Pacific nations to address challenges related to climate change and strategic competition with China and Russia.

Historically, New Zealand’s Defence Force has faced chronic underfunding, currently standing at just over 1% of GDP. Recent years have seen high attrition rates, leading to the idling of three ships and the postponement of plans for a new vessel intended for Southern Ocean patrols, although attrition has decreased in the past year.

The four-year plan includes investments in enhancing strike capabilities, acquiring an uncrewed aerial system, replacing helicopters, and extending the lifespan of frigates. Additionally, it aims to replace the Boeing 757 fleet following several notable breakdowns that affected international delegations.