On The Myths Of Frugality In Our Defence Spending

one sense, Peru is the poster child of political

instability, having gone through nine presidents in the past

10 years, with several ending up in jail. Paradoxically,

Peru has also been a model of economic stability. Julio

Velarde has been the governor of Peru’s Central Reserve

Bank since October 2006, and Peru’s currency – the sol

– is widely regarded as being one of South America’s

strongest and most stable currencies.

Yesterday’s

run-off election in Peru would have elected the 10th

president in the past decade. It pitted a hard right option

– Keiko Fujimori, daughter of a previous extreme right

wing president – against a hard left option, Roberto

Sanchez. The result has ended up in almost a statistical

dead heat, with Sanchez reportedly ahead by only 4,300 votes

94% of the vote has been counted. Political gridlock and

mutual accusation of voter fraud will follow.

Velarde, meanwhile, will finish his fourth five year term as

governor of Peru’s central bank in July. If Sanchez wins,

he has indicated he will ask Velarde to stay on. Yet Velarde

may have finally had enough.

Defence: no expense

New Zealand’s chronic sense of insecurity is

never all that far from the surface. If we aren’t bragging

that we’re punching above our weight we’re anxious that

foreigners might not like us and/or might think we’re not

pulling our weight. As a result, we over-compensate, in the

hope this might win us favourable treatment from bigger

countries that are barely aware of our

Currently, this combination of self-doubt

and appeasement is being played out in our plans for Defence

spending into the early 2030s. None of the increase seems

based on any rational assessment of what equipment we might

usefully require to defend ourselves, in what locations, and

against whom. Our own security needs are commonly treated as

being entirely irrelevant. It seems to be all about pleasing

bigger countries, in the hope they’ll stop saying mean

things about us.

The current plan is to lift the money

spent on Defence to 2% of GDP by 2032. One justification for

this massive increase in Defence spending is that we live in

an unstable world. Maybe so. That still begs the question as

to whether an arbitrary 2% of GDP level of spending on

hugely expensive pieces of dubiously relevant equipment will

actually make this country any safer. Where’s the

cost/benefit analysis on any of this?

Moreover, it

begs the question as to why we would be spending vast sums

in order to be better integrated with the armed forces of

the very same superpower widely seen to be the prime

instigator of the global insecurity in question. The Iran

War for instance, was triggered by the same US

administration that is currently calling us names.

fact, it could be argued - God protect us from our friends -

that the defence spending envisaged is likely to make New

Zealand less safe in the years to come, by dragging

us into conflicts instigated by our traditional allies.

Interestingly, the same isolationist Trump administration

that is cracking the whip on our defence spending is

offering us no guarantee of protection in return, despite

our government’s apparent subservience to America’s

strategic plans.

Not only are we being pressured into

serving US interests for no equivalent commitment in

return... but the days of us getting mates’ rates for US

weaponry seems

to be over as well.

[Defence analyst Dr Mark]

Obren said the US would sometimes waive research and

development costs from sales, but it appeared not to have

done so for Australia or NZ - or for NATO, where the Trump

Administration now saw arms sales as much more of a business

opportunity. "The idea of cheaper equipment provided because

we're part of the boys' club, is coming to an

Good to know. So when we’re being told by

the US War Secretary Pete ( “Pete

loves war”) Hegseth that we’re freeloading, and need

to be spending more on Defence, its worth keeping in mind

that the person saying so is a salesman for the US arms

industry. And thus, best ignored.

Those years of

All of that aside...a repeated

rationale for the expensive outlays on our armed forces is

that our military needs have

allegedly been neglected by successive governments, thus

leaving the NZDF ill -equipped to meet the security

challenges of the scary world out there beyond our shores.

(Is the world any more unsafe now than it was during the

Cuban Missile Crisis, or when the US and the Soviets were

facing off in Europe? Or during the prior wars in Korea,

Vietnam, Bosnia etc? Arguably not.)

As mentioned, it

is hard to see how lining up obediently in battle formations

under the leadership of Commander-in-Chief Donald J. Trump

would ever be in New Zealand’s best interests. More to the

point, it is not as if our military has been forced to

subsist on survival relations over recent

Here’s a list I’ve compiled of some of

the expensive ways in which our armed forces have been

re-equipped over the course of the past 25 years. I’ve not

included the annual operational costs of the armed forces,

which are considerable. (Reportedly, it will cost $NZ30,000

per hour to operate our new Seahawk helicopters.) What

follows does not claim to be an exhaustive list. But it does

2001: Light Armoured Personnel Carriers for

the NZ Army. Cost : $NZ653 million.

2001 – 2026. Ove

this period, the NZDF has bought four generations of

helicopters for a range of purposes: the five AgustaWestland

A100 trainers, the nine NH90s, the ten KamanSH-2G Sea

Sprites, and the recently authorised purchase of five new

Sikorsky MH-60R Seahawks, for advanced anti-submarine and

anti-surface warfare.

The final contracted price for

the Seahawks package has yet to be formally announced.

Presumably, this final figure will include weaponry, spare

parts, maintenance platforms, housing for the choppers etc.

RNZ has reported a

ballpark unit figure cost of $NZ400 million for each of

the Seahawk choppers, a figure considerably more than that

paid (for a variety of reasons) by other

formally approved the Seahawks sales package for $US1.5

billion, or $NZ2.6 billion. Reportedly, the Seahawks

choppers will be operationally compatible with the Japanese

Mogami-class frigates that the Australian Navy has

already begun to purchase. By the end of next year, New

Zealand appears set to buy two of the same enhanced version

of the Mogami class frigates, at an estimated cost of at

least $NZ1.2 billion each. If some of the Mogami frigates

get built in Australian shipyards, the frigates programme

will create as many as 10,000 quality jobs – but only for

Australians.

2003. Two Boeing 757 aircraft, bought

second hand when 10 years old. Cost after

modifications: $NZ 220.6 million.

2007: New purpose-built

Defence Building, Aitken St Wellington. Cost $NZ110

million. Damaged beyond repair by 2016 Kaikoura earthquake.

Replaced by

extensively refitted Defence House Bowen St. Wellington

Cost :$NZ 203 million.

2017 : New rifles for

the armed forces. Cost: $NZ59 million

Poseidon P8-A purchase. Four anti-submarine surveillance

aircraft for RNZAF. Initial Cost: $NZ2.34 billion. Beyond

the airframes, costs were incurred in shifting the squadron

to Ohakea, upgrading the Ohakea tarmac, building a

$250 million purpose built hangar for the planes and

their flight simulator, and improving the quality of the

housing provided for squadron members and their

2018: Littoral operations vessel HMNZS

Manawanui. Cost: $NZ147 million. Sank in Samoa, 2024.

Listed as a $NZ77 million write off in Budget 2025, with a

further $NZ32 million earmarked for clean-up

2019: The purpose built, ice-strengthened fleet

tanker HMNZS Aotearoa. Cost: $NZ493 million. Estimated

annual cost of maintenance: $NZ 5.6 million.

Five new Lockheed C130-J30 Super Hercules transport planes.

cost: $NZ1.521 billion.

2025: Two new Airbus

A321XKLR aircraft to replace the NZDF’s Boeing 757s (see

above) on a lease to buy arrangement. NZDF estimate the

capital cost of this project to be $NZ620 million, plus

four year operational costs of $NZ80.86 million. Roughly

$NZ700 million then, so far.

2023- 2026. Pay increases

for NZDF staff. As outlined

here, the Clark government delivered pay increases to

NZDF personnel in 2001, 2002, 2003, and 2004, culminating in

a pay increase as part of the 10-year $4.6 billion Defence

Sustainability Initiative funding package initiated in

The pay rise provides for an average 4.3 per

cent increase, with the median rank increases ranging from 3

per cent to 7.5 per cent and will give a minimum two-step

pay adjustment of $1200 to all personnel, with additional

single service targeting of trades and

The issue of pay rises was addressed

again in 2023, in the REM23 Pay Adjustment. This $419

million salary increase (over four years) was the biggest

boost to military pay in more than ten years, and (as with

previous pay hikes) was meant to stem the high rates of

attrition of NZDF both to Australia, and into the private

Budget 2026 continued this pay process via the

REM26 adjustment, that allocated a further $120 million over

the next four years. The avowed focus of these recent pay

hikes has been on raising basic pay grades for junior and

middle-ranking staff, with the intention of bringing pay

rates to within 90% of that available to private sector and

/or equivalent Australian DF personnel. This

OIA response gives tables of NZDF pay grades in relation

to estimated market pay equivalents. Reportedly, the average

NZDF basic salary is $74,000 per annum.

BTW, as the

pointed out, civilian staff employed by NZDF should

automatically be included in these pay rises, but are not.

This Budget

2026 paper outlines several other funding boosts to

NZDF. Funding was made readily available for these

war-gaming activities:

*Building a modern secure

training facility at Linton Military Camp to prepare

soldiers for mission planning in contemporary combat

* There is also $23 million capital

and $2.5 million operating over four includes

targeted funding for immediate critical upgrades in areas

such as the rifle range at Waiouru, as well as simulation

and other tools....

*Technology accelerator:

$1.5 million capital and $16 million operating over four

years on a pilot programme focused on connecting industry

with Defence to solve specific military challenges. [No

details provided on what are these “specific” military

challenges facing New Zealand, that our private sector would

be able to help resolve. Since this is a “pilot”

programme, similar military activities offering potential

profit opportunities for the corporate sector are likely to

follow, in our own version of the military-industrial

2026 : Frigate upgrades. As the 2026 Budget

paper puts it :

This year we will be spending $143

million capital and $72 million in operating costs over four

years for “critical maintenance” on our two current

Anzac frigates. There is also funding for further work to

extend the life of the frigates, while the project develops

options for their replacement

Meaning: we’re

spending $215 million to keep these floating museums a

little longer on the water for what are mainly P.R.

purposes. BTW, this $215 million temporary fix for these two

old ships is slightly more than the $212.4 million that

Budget 2026 allocated to the school lunches programme for

240,000 New Zealand children, through 2027.

fighting platforms, the new frigates (even when equipped

with the new Seahawk helicopters) will make little security

sense beyond their subsidiary role within US/Australian or

UK-led battle formations. Even then they would be at serious

risk of being taken out by a swarm of $200 drones especially

if and when – in a battle setting – the enemy has

managed to jam the “command and control” systems of our

America’s warships are vulnerable.

Deploying an aircraft carrier, like the USS Gerald R.

Ford, into a tense area conveys a potent message; it’s

a powerful tool of “gunboat diplomacy.” But it’s

questionable whether commanders would want to send it into

an active war theatre, especially against China, which is

ready to launch swarms of accurate drones and anti-ship

missiles to disable even a mighty carrier—and to turn on

cyber-weapons to jam the high-tech sensors and guidance

systems that make the carrier and its escort ships so

Still, we continue to spend billions on

the likes of frigates, as if the nature of air and sea

warfare has not changed significantly in the past 50 years.

As taxpayers, we are paying a very expensive price to enable

the NZDF to engage in what – in a security sense - are

little more than games of military cosplay. We continue to

buy expensive, vulnerable weapons platforms that will be

“inter-operable” with the expensive, vulnerable weapon

platforms of our allies, while

our alleged adversaries rely on relatively cheap,

technologically advanced weapons. Guess who would be more

likely to prevail in real-life conflict

Living the Life

As the above list

indicates, the NZDF has never had to settle for the levels

of unmet need, perpetually deferred capital expenditure,

failing equipment, and inadequate pay and staffing levels

that have long dogged the public health system. Successive

governments of the centre-left and the centre- right have

given the NZDF what they have asked for. Time and again,

only the multi-billion dollar best has

Footnote One: The vast sums

cited above continue to be poured into a relatively small

receptacle. As this research article on

the military’s role in our Covid response pointed out

The NZDF generally has around 10,000 personnel at

its disposal — the Army has approximately 4600 regular

force staff, the Air Force 2540, and the Navy 2200. The Army

is therefore essentially a Brigade, the Air Force a single

fixed wing/rotary squadron (assets don’t include combat

aircrafts), and the Navy has two frigates, a new ice-breaker

vessel and smaller patrol

Footnote Two: To foster

the sense of a social purpose for its expensive needs and

tastes, the NZDF commonly points to its role in coming to

the community’s assistance in times of need. Yet from

responding to natural disasters to fisheries protection to

finding lost sailors, all of this work could be carried out

with civilian vessels, planes and drones that would cost far

less to buy and to operate, and without the risk of dragging

us into wars initiated by our friends and

neighbours.

Moreover, there is evidence that NZDF

personnel may not excel at or even welcome such socially

useful roles. True, the NH90 helicopters proved

to be very useful for evacuations in the wake of the

Kaikoura earthquake. In the aftermath of Cyclone Gabrielle

however, the NZDF bungled

its supply of water tanks to East Coast communities in

need. More to the point, many of the armed forces asked to

staff New Zealand’s managed isolation facilities during

Covid seem to have actively resented being asked to do such

work. As the above research article reports:

the 136 staff who completed exit 17%

identified Operation Protect as a “somewhat important”

or “very important” factor when deciding to leave [the

NZDF]. More recent figures have shown that 338 personnel

left the NZDF in 2021 up to October, with a third of them

citing involvement in OP PROTECT as a factor in their

decision to leave, and with 227 of these resignations coming

from the Army.

On the upside, the same body of

evidence suggests that the Covid MIQ deployment did enable

the armed forces to better develop some of its “soft

skills” in dealing with the public. In that respect,

perhaps losing the NZDF personnel reluctant to serve society

in non-lethal ways may have been a blessing in

Attrition from OP PROTECT may act to push

out some of those who are incapable of adapting, or of

accepting that “serving” one’s country might require

something other than traditional warfighting or even

peacekeeping.

There’s a thought. For decades,

the NZDF has been trained and expensively equipped for the

prime purpose of killing people living far away, in the

alleged “defence” of our national interests. As Sir

Roger Douglas once said, there’s got to be a better