Budget 2020: Defence spending locks in $1bn Air Force upgrade

The C-130J Super Hercules, intended to replace the aged Hercules aircraft that New Zealand's air force has used since the 1960s. Photo / File

Funding for a massive upgrade to our ageing military aircraft is going ahead, even as the country heads into its gloomiest economic outlook for decades.

Top of the shopping list is the C-130J Super Hercules, which is intended to replace the Royal NZ Air Force's Hercules transport aircraft that has been used since the 1960s.

The $898 million in funding comes despite Cabinet having yet to approve the business case for the new C-130J. More money has been allocated to complete the purchase and transition in the coming years.

Defence Minister Ron Mark said the $1.77 billion in funding for Defence - including NZ Defence Force and the Ministry of Defence - was "critical to our national resilience and had been deferred for too long".

As part of that, he said buying the C-130J "continues to be my highest priority as Minister of Defence".

Mark's position on Defence funding had the NZ First MP pointing to the coalition agreement between his party and the Labour Party.

The funding supported NZ First's "comprehensive and ambitious vision" for the future of the NZ Defence Force "and this funding will maintain our momentum in delivering that plan".

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Other funding included $666m for the Army, Navy and Air force for frontline capability, computer and communications technology and continued upgrades across NZDF bases.

Similar funding was allocated to support Mark's Strategic Defence Policy Statement, launched in 2018 with the aim of directing NZDF's focus on local and regional issues, and strengthening its ability to project New Zealand's presence across the Pacific. It also broadened NZDF's role to include actions such as addressing the impact of climate change.

Other funding included $840,000 to Veterans' Affairs out of Covid-19 funds to improve information exchange across health systems, recognising those considered to be in older, vulnerable populations who may struggle to visit GPs under some alert conditions.

Money in the Budget will support projects already announced - four new patrol aircraft, a new dive and hydrographic vessel for the Navy and to double the size of the Army's Limited Service Volunteer scheme that aims to give young people the attitude and skills needed to get jobs.

The Defence papers showed signs those areas outside the big-ticket payments and purchases had been trimmed, with many falling short on previous years' funding.

They also showed capital projects - including upgrading capability - had been funded out of cuts to funding intended for other areas. Increasing security across NZDF was funded as a priority, using money that had been set aside for some base upgrade work.