New Zealand announces major increase in defence spending

New Zealand has announced a major increase in its defence budget for fiscal year 2019–20 to support military recapitalisation efforts.

The expenditure, announced by the government on 30 May, provides NZD5.06 billion (USD3.29 billion) to defence, which represents a 23% increase over the budgeted 2018–19 defence allocation of NZD4.11 billion.

New Zealand’s new defence budget will include funding towards the acquisition of four Boeing P-8A Poseidon maritime patrol aircraft. (IHS Markit/Patrick Allen)

New Zealand’s defence funding is calculated from two allocations administered by the Minister of Defence.

The ‘Vote Defence Force’ allocation covers salaries, training costs, and military preparedness, and the ‘Vote Defence’ allocation includes funding for the “purchase, modification, or refurbishment of major items of defence equipment for the New Zealand Defence Force (NZDF)”.

In the 2019–20 defence budget, Vote Defence Force received NZD4.29 billion, 18% more than in 2018–19, while Vote Defence received NZD766 million, which is a 63% increase over the NZD470 million budgeted for 2018–19.

Vote Defence Force contains NZD916 million for the army, NZD907 million for the air force, and NZD493 million for the navy. The vote also contains NZD1.3 billion for capital expenditures, a 74% increase over 2018–19, for the “purchase or development of assets”, according to budgetary documents.

Vote Defence spending for 2019–20 receives funding for several procurement priorities, most notably New Zealand’s procurement of four Boeing P-8A Poseidon maritime patrol aircraft (MPA). New Zealand confirmed this deal in July 2018 at a cost of NZD2.34 billion, with payments spread over fiscal years until 2026.

In the 2019–20 budget the P-8A procurement receives NZD108 million.