Defence Minister Andrew Little held a press conference on Friday morning after the Government released a roadmap for the future of defence and national security.
Two documents were released alongside New Zealand's first National Security Strategy, the first in a series from the Government's Defence Policy Review.
The two documents were the Defence Policy Strategy Statement and the Future Force Design Principles.
The announcement has been called "the biggest shake-up for New Zealand's foreign and defence policy in a generation," by geopolitical analyst Geoffry Miller.
The review was initially scheduled to report back in 2024 but was fast-tracked when Little became defence minister earlier this year.
It found Aotearoa's Defence Force (NZDF) is not in a fit state to respond to future challenges and the Government has announced a fundamental change in its role. The force will move away from its passive and humanitarian focus and towards being combat-ready.
Little said New Zealand no longer has "a choice" because we do not live in a benign strategic environment.
Prime Minister and Minister for National Security and Intelligence, Chris Hipkins, said the world is contending with a range of "complex and disruptive security challenges", some of which Aotearoa has experienced too.
He said the documents outline a plan and are an "important step" in how "we are protecting our national security and advancing our national interests in a more contested and more difficult world".
Little was upfront about New Zealand's position, "In 2023, we do not live in a benign strategic environment", he said.
"Aotearoa is facing more geostrategic challenges than we have had in decades."
He listed climate change, terrorism, cyber-attacks, transnational crime, mis and dis-information, as some of the challenges the country is facing.
Little emphasised Kiwis stood "for a peaceful world for all people".
Newshub Nation senior reporter Laura Walters, who was at the press conference, asked whether Little was mentally preparing Kiwis for the possibility of a war in the region.
"No one wants conflict, we want to live in a peaceful world and, like many of our partners, we will use whatever means we have, including diplomatic and through international forums, to prosecute the cause of peace," Little said.
"While there are threats of conflict, we have to be prepared for that as well."
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Friday's announcements made clear the NZDF will be working towards being combat-capable, with the potential of being deployed more regularly.
Little said the NZDF "has always been combat capable, that's what a Defence Force is".
He went on to say as conditions change, "we have to be thinking about what that means for us".
"If for example, a conflict does break out in the South China Sea, where $20 billion dollars of our exports flows through every year, we have a stake in that and we may be called on should conflict break out."
According to the National Security Strategy, "China's rise is a major driver of geopolitical change".
The authors assert that Beijing is becoming "more assertive and more willing to challenge existing international rules and norms," going so far as to say China is employing "economic coercion" to achieve its aims.
"We need to be equipped for that and prepared for it," Little told Walters.
The increase in defence spending comes at a time when many other sectors of New Zealand society are struggling to get through the cost of living crisis.
Little said that the primary duty of the Government was "the safety and security of its people".
"That does mean we have to have a national security capability and a defence capability and ensure peoples' physical health is looked after as well."
Little admits the Government "haven't been very good in the past at talking publicly about it, the onus is on us to talk publicly about it, and we have to talk openly about what we need to do to preserve and protect our interests".
Former Labour Prime Minister Helen Clark was quick to condemn Friday's announcements, taking to X, formerly Twitter, to say the documents released "suggest that NZ is abandoning its capacity to think for itself and instead is cutting and pasting from 5 Eyes' partners".
Clark highlighted a section in the Defence and Policy Strategy Statement that reads: "Defence will continue to work with partners and with industry to leverage shared expertise and knowledge on military technological developments. Defence will improve the effectiveness of its defence science and technology capability and partnerships.
"New Zealand’s Five Eyes partners will be particularly important in this regard. AUKUS Pillar Two may present an opportunity for New Zealand to cooperate with close security partners on emerging technologies."
She said this section infers "an orchestrated campaign on joining the so-called 'Pillar 2' of AUKUS which is a new defence grouping in the Anglosphere with hard power based on nuclear weapons".
She pointed out NZ initially removed itself from AUKUS discussions because of its nuclear-free policy.
Professor Robert Patman, an international relations specialist at the University of Otago, said AUKUS - a defence alliance between Australia, the UK and the US - "has already been criticised for fuelling nuclear proliferation".
"On balance, detachment from AUKUS seems a much less risky option than partial membership through Pillar 2."
