Prime Minister Chris Hipkins will this afternoon announce a planned $240 million spend on defence assets and infrastructure in the upcoming Budget.
Hipkins and Defence Minister Andrew Little will announce the spending on defence after Cabinet meets on Monday, a funding package that is understood to include $243.4m in capital investments, as well as funding to support the Defence Force with the climbing cost of living.
The $243m will be spent on improvements to the Navy’s two frigates, which have in recent years been overhauled; upgrades to 43 recently acquired Bushmaster vehicles; and the construction of a new refuelling facility at the Air Force's Ohakea base.
The sum of further spending – possibly on increases to wages – would also be part of the pre-Budget announcement on Monday afternoon.
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A spokesperson for the Government said the Budget, to be published on May 18, would be about “getting the basics right.
“The Government inherited a seriously underfunded Defence Force and since 2017 has been working to turn that around, with a record investment of over $4.5 billion.
“Budget 2023 will further build on our previous investment with a focus on people and skills.”
The Defence Force has been struggling since the pandemic with record-high attrition driven by a labour crunch, as its resources are stretched by both maintaining ageing assets and introducing new aircraft into service.
Staffing issues led to the Air Force decommissioning its P-3 Orion aircraft months earlier than planned, in January, before new P-8 Poseidon surveillance aircraft were ready for operations.
Three Navy ships have also been tied up in Devonport, unable to be used, due to lack of personnel.
At the 2022 Budget, the Government committed to a $90m wage boost for defence, and allocated $525m for maintaining of defence assets, and $137m to improve building and infrastructure.
Chief of Defence Air Marshal Kevin Short last month said defence was offering its staff $60m in one-off payments to stop them walking out the door, after losing 30% of uniformed personnel over two years.
He has suggested at least $60m more will be needed in the coming Budget to boost wages and retain personnel. The Defence Force has in recent years spent more than $1b on wages annually.
The National Party has been urging the Government to commit more spending to defence, criticising the anticipated drop-off in defence spending in the coming years if more was allocated in future Budgets. The party has not set out how much it would spend if elected to Government.
A sweeping review of the country’s defence policy announced in 2022 is ongoing. Little last week said the review was “well underway” and would start to produce reports in the coming months.
