Christopher Luxon holds post-Cabinet press conference
The Government’s defence spending will reach over 2% of GDP within eight years, with $12 billion in funding planned over the next four years.
Major investments include replacing the Boeing 757 fleet, enhancing strike capabilities and acquiring new maritime helicopters.
The plan focuses on critical investments, extending the life of Anzac frigates, and aims for greater interoperability with partners.
The Government’s defence spending will hit more than 2% of gross domestic product (GDP) within the next eight years, with a long-awaited plan released today revealing $12 billion in funding over the next four years, $9b of which is “new”.
It’s being described as a “landmark day” for both the Government and the New Zealand Defence Force (NZDF) by Prime Minister Christopher Luxon.
“This is a significant financial investment and it represents the floor, not the ceiling,” he said. “This plan is not just about the Defence Force, it’s fundamentally about our national security and our economic prosperity.”
Defence Minister Judith Collins said the plan would deliver “enhanced lethality” and a “deterrent effect”.
She said it was not “about choosing sides or beating the drums of war”, but supporting an international rules-based order, working alongside our partners and making smart decisions for the future.
“It gets our NZDF out of the intensive care unit and not just growing, but growing where we need it to go,” she said. “Our personnel deserve a serious plan that will serve them as they serve us, this is what we have delivered.”
There are several major investments expected between this year and 2028 highlighted within the Defence Capability Plan (DCP).
This includes replacing the Boeing 757 fleet (expected at $600 million to $1b), enhanced strike capabilities ($100m to $300m), and a new fleet of maritime helicopters to operate from Navy ships ($300m to $600m).
The plan breaks down investments into those between now and 2028, and “indicative” investments which are foreshadowed from 2029 onwards. The plan is not explicitly funded – the funding must be agreed upon by Cabinet for each individual investment.
This means that the near-term investments are likely to be funded, given the Government that put them in the plan is the same Government that sits around the Cabinet table deciding funding. Investments further into the future will be funded by the Government of the day.
In the near term, the Government has decided not to immediately replace the country’s ageing Anzac frigates, HMNZS Te Kaha and Te Mana, but instead provide additional maintenance to extend their lives into the early 2030s. This will cost between $300m and $600m.
“Extending the life of the frigates will retain Defence’s combat capable ships and the skilled workforce required to operate combat vessels until the ships are replaced,” the plan says.
“This ensures retaining a critical combat capability able to operate at home, in our region, and globally. Rather than removing the frigates from service for an extended period, the maintenance work is planned to progress incrementally, aiming to ensure the frigates are available for training, operations and contingencies.”
Asked about the decision not to soon replace the frigates, Collins said New Zealand now additionally had uncrewed capabilities and re-emphasised this plan was a minimum.
“Every two years we will check in to see, should we be adding to that capability?” she said.
The frigates will need to be replaced eventually, and the plan does suggest this will happen between 2029 and 2039. The Anzac frigates are expected to one day be replaced with comparable contemporary frigates.
The recently sunk HMNZS Manawanui will not be replaced by a new vessel, with dive and hydrographic tasks to be undertaken from other platforms rather than a single dedicated one.
There had been speculation ahead of the plan that it would include replacing the frigates as part of a joint procurement project with Australia – much like the 1990s joint procurement of the current frigates.
This idea has been scrapped in favour of getting more life from the current frigates, which have recently undergone a system upgrade.
The Defence Force is in the midst of a much wider review of Navy capability, the Maritime Fleet Review, which will inform the shape of its assets into the 2030s.
Prime Minister Christopher Luxon speaking in the Newstalk ZB studio this morning. Photo / Michael Craig
When will New Zealand hit 2% of GDP defence spending?
Luxon said in a statement that the DCP contained $12b of funding over the next four years, including $9b of new spending and $3b from depreciation. That is expected to raise the country’s defence spending from just over 1% of GDP to more than 2% in the next eight years.
The Government has used a GDP forecast from the Stockholm International Peace Research Institute, which it says allows for international comparison and has been recommended by Treasury.
Spending 2% of GDP is significant. This spending level is set as a target for members of the Nato alliance. While New Zealand is not a member of Nato, the 2% target is often cited as an unofficial benchmark for the optimum level of spend – although there are sceptics who note that a lower level of spending, invested well, is better than a larger amount that is wasted.
The United States has been putting pressure on allies and partners like New Zealand to lift spending levels. Within NZ this has been criticised for eroding the independence of New Zealand’s foreign policy and aligning the security policy more closely with the US. The plan will not dispel these fears, explicitly citing the “Anzus alliance with Australia” and the “wider Five Eyes partnership”.
Collins said she had briefed Australian Defence Minister Richard Marles on the plan. She also spoke with Pacific leaders, who relayed they were “delighted” with the commitments.
Asked about the reference to Anzus, Collins said people needed to realise “we’re not playing tiddlywinks here”.
“It’s a tough world out there and the Australians are our best friends,” she said.
The Prime Minister stressed there was no change to New Zealand’s nuclear policy.
The Government also repeated the “force multiplier” language that had recently copped criticism and said the plan would enable New Zealand to be more interoperable with partners. Interoperability – the ability of a defence force to seamlessly operate with that of another country – has long been a goal of the relatively small NZDF.
The plan promised enhanced strike capabilities. These will be for the maritime domain and allow for longer-range strikes.
“Options include arming existing air and maritime platforms with missiles such as the P-8A Poseidon fleet and the Anzac frigates or exploring other options, including land-based strike,” the plan says.
The two-aircraft Boeing 757 fleet will be replaced. They are “used to support New Zealand’s presence in Antarctica, evacuate New Zealanders from conflict and disaster areas, and carry civilians and ministers for trade, diplomatic and consular missions”.
As for replacing maritime helicopters, the plan says the current Super Seasprite maritime helicopters that operate from frigates are reaching their end of life. In future years, the plan says there could be consideration of acquiring uncrewed systems to increase the number of deployable aircraft and provide longer endurance.
Defence Minister Judith Collins said it wasn't time for tiddlywinks. Photo / Alex Burton
‘The floor, not the ceiling’
Luxon said: “This blueprint has been designed with a 15-year horizon but deliberately focuses on critical investments needed in the next four years to ensure our Defence Force can adapt as the world around us changes.”
He noted his appreciation of New Zealand First and Act for their “unwavering support in advancing this plan”, and made a special mention of NZ First for previously driving the procurement of the P-8A and Hercules Aircraft.
Collins said the New Zealand Defence Force needed the right equipment and conditions to do its jobs.
She believed the plan would ensure the NZDF was combat capable with “enhanced lethality” and a deterrent effect, would be a “force multiplier with Australia and interoperable with partners”, would be “innovative” and have “situational awareness”.
The minister also paid tribute to those who serve in the NZDF. As she has done repeatedly in the past, Collins highlighted that many personnel had left the force in recent years, including after having to patrol managed isolation facilities during the Covid period. That included members of New Zealand’s most elite military force.
“That has left us with a hollowed-out middle in our personnel and this plan allows us to address that. Already our attrition has fallen from 15.8% in December 2022 to 7.5% in February 2025,” Collins said.
“We know we need to rebuild the core of the NZDF so we can fully utilise the ships, aircraft, vehicles and weapons we already have, while looking to what is needed in the future.”
Act’s defence spokesman, Mark Cameron, called the DCP a “major win for New Zealand’s security” and the goal of exceeding 2% of GDP demonstrated to the world “that New Zealand is ready to step up”.
Winston Peters, the Foreign Affairs Minister, said it was a “step in the right direction in ensuring that we do our part to make New Zealand and our region safer and more secure”.
Labour leader Chris Hipkins was “broadly” supportive of the new plan.
