Big jump in defence spending but will it boost morale?

New Zealand Defence Minister, Jonathan Coleman.

The Government plans to increase its defence spending for the first time in four years with a half-billion dollar investment, but Labour says the new money will not buy back morale and expertise lost during years of budget cuts.

Defence Minister Jonathan Coleman confirmed yesterday the Defence Force's budget will rise for the first time since 2010.

National will allocate $100.3 million in next month's Budget and a total of $535 million over the next four years.

Dr Coleman said the previous Labour Government bought offshore patrol vessels and helicopters but did not increase funding to operate them.

The funding boost came after major reforms in 2010 which required the New Zealand Defence Force to reduce costs by $350 million to $400 million a year.

Hundreds of jobs became civilian before the programme was halted in 2012 because it was causing high attrition rates and low morale.

As a result, the navy was not able to crew its patrol vessels, the air force lost a large number of trained crew, and the army was unable to perform some basic duties.

Labour's defence spokesman Phil Goff said the funding boost was a belated concession from National that the cuts went too deep.

"It's an acknowledgement of the disaster that the policy of cuts was. For the pathetic amount of money they saved ... they lost so many people from skilled and non-commissioned officer levels, which takes about seven years to train for," Mr Goff said.

Dr Coleman said the new money was not reparation for years of cuts.

"The savings programme was moving money around to fund our priorities. We've done that, we will continue to do that, but this is new money on top of that. This is not make-up for cuts."

The reforms were designed to cut costs by $350 million a year by 2014/15.

Since 2010, they have saved just over $200 million a year.

He said the Government was also close to awarding contracts for training facilities for the SAS and for an upgrade of the navy's frigates.

It was seeking a replacement for the navy's tanker the Endeavour.

These projects would not be funded out of the new money.

Defence spending
• Budget will increase by $100m to around $3b in 2014/15 budget.
• $535m to be invested over next four years.
• Funding is for running ships, helicopters, vehicles.