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, $9 billion of which is “new”.

In a statement, Prime Minister Christopher Luxon and Defence Minister Judith Collins said the plan would deliver “enhanced lethality” and “deterrent effects”.

Luxon will provide further details at the post-Cabinet press conference at 4pm, which is being livestreamed.

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 $600m to $1b), enhanced strike capabilities ($100m to $300m), and a new fleet of maritime helicopters to operate from Navy ships ($300m to $600m).
$12b in four years

$12b in four years

The plan breaks down investments to 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 by Cabinet for each individual investment must go to Cabinet for agreement and funding must be appropriated in the Budget.

This means that while 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.”

Looking further forward, between 2029 and 2039, the plan says the Anzac frigates will be replaced with comparable contemporary frigates as well as offshore patrol vessels. The recently-sunk HMNZS Manawanui will not be replaced with a new vessel, with dive and hydrographic tasks to be undertaken from other platforms rather than a 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 $12 billion of funding over the next four years, including $9 billion of new spending and $3 billion 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’s 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 New Zealand this has been criticised for eroding the independence of New Zealand’s foreign policy and aligning the security policy more closely with the United States. The plan will not dispel these fears, explicitly citing the “ANZUS alliance with Australia” and the “wider Five Eyes partnership”.

The Government repeated the “force multiplier” language that had recently copped criticism and said the plan would be 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 strikes 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 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.

‘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.”

“The Government has committed to reviewing the plan every two years. Put simply, this is the floor, not the ceiling, of funding of our Defence Force.”

Luxon noted the support 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.

Defence Minister Judith Collins said the New Zealand Defence Force needed the right equipment and conditions to do their 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 repeatedly before, 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.”

Major investments planned for 2025-2028:

• Enhanced strikes capabilities
• Frigate sustainment programme
• Persistent surveillance (uncrewed autonomous vessels)
• Replacing the maritime helicopters
• Javelin anti-tank missile upgrade
• Network Enabled Army
• Special Operations sustainment
• Vehicles for the NZDF
• Counter uncrewed aerial systems (UAS)
• Long-range remotely piloted aircraft
• Replacing the Boeing 757 fleet
• Space capabilities
• Enhancing cyber security capabilities
• Enterprise resource planning
• Improved intelligence functions
• Updating classified digitial services
• Accommodation, messing and dining modernisation
• Defence estate regeneration
• Defence housing programme
• Future Devonport naval base design
• Ohakea infrastructure programme
• Defence, Science & Technology uplift
• Technology accelerator
• Information Management
• Digital modernisation
• Logistics resilience
• Consolidated Logistics Project infrastructure
• Implementing a workforce strategy

Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.