A top official advises ‘deep breaths’ on potential NZ involvement in Aukus, as military budgets and capabilities face scrutiny. New Zealand governments must stop “robbing Peter to pay Paul” by putting off expensive but important investments in the country’s military, a senior defence official has told politicians.

The heads of the NZ Defence Force and the Ministry of Defence, along with Defence Minister Judith Collins, appeared in front of Parliament’s foreign affairs, defence and trade committee on Tuesday as part of the latest ‘scrutiny week’ for government departments.

The financial strain facing the Defence Force was among the main topics of discussion, with RNZ reporting the military had told staff it needed to find $360 million in operational savings for the next financial year.

“Everything’s tight: it’s tight in terms of personnel, it’s tight … in terms of money, everything is so we can’t waste anything,” Collins told the committee.

However, she was unaware of any work that the Defence Force found itself unable to do as a result of its tight budgets, a position supported by the new Chief of Defence Force, Air Marshal Tony Davies.

“We have not failed to deploy or do an operation that we’ve been asked to do – the issue really is it takes us longer to prepare to do those missions … and we might not be able to send the same number of people that we have previously sent,” Davies said.

The military had faced operating pressures for as long as he could recall, and was not along with all government agencies dealing with similar constraints.

News of more cost-cutting comes as the Government continues to work on a new defence capability plan, setting out billions of dollars in planned military investments over the coming decades. The plan was due to be released earlier this year, but Collins told media on Tuesday it would now not be completed until early next year.

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Ministry of Defence chief executive Brook Barrington said the plan would create a blueprint for the Defence Force’s future, with the investment and procurement process of critical importance given New Zealand’s tendency to “sweat our assets” by keeping them in service for longer than other nations.

Barrington said interoperability with the Australian Defence Force would be important, given the shared strategic outlook with New Zealand’s only formal ally, although that did not mean the Government should always emulate the investment decisions made by Australia.

“I would not want to suggest some sort of robotic response here: we still have our own interests and we need to pursue those, but they are interests we should pursue transparently with Australia to the fullest extent possible.”

Over the last 30 years, successive governments had shown a tendency to defer capital spending on defence projects, creating a “lumpiness” as various aircraft, ships and other equipment reached the end of their life.

“In many respects, this is robbing Peter to pay Paul: robbing time in one year simply causes a train wreck of a problem further down the track, so we just have to get out of that bad habit.”

Davies said a similar problem was looming with the Navy, as “almost our entire maritime capability” would need replacing within the next decade at significant cost.

The Defence Force chief said record attrition seen during the Covid-19 pandemic had begun to turn around, with current levels similar to those in 2017/18. A peak of 9771 uniformed personnel in 2021 had dropped to 8489 by the middle of 2023, but was currently sitting at 8741.

However, there was still a “hollowness … across the entire organisation” because of the departure of experienced, skilled personnel.

Speaking about the current security environment, Barrington said New Zealand’s strategic position was sharply deteriorating as the rules-based international order faced a series of challenges.

Though much had been made of the coalition Government working more closely with like-minded partners such as New Zealand’s Five Eyes partners, that term also applied to Germany, Japan, South Korea and the Nordic states.

“These are countries that we have worked with, share common values and systems of government with for decades, and I think the Government is simply underscoring what has been quite a long trend.”

Asked about potential New Zealand involvement in Pillar II of the Aukus security pact, after Labour leader Chris Hipkins last weekend set out his party’s opposition to such a move, Barrington said officials were “following an orthodox public policy process” and intended to provide “robust and well-interrogated advice” to the Government in due course.

“It just seems to me that in some respects, perhaps we’re getting a little ahead of ourselves on this and deep breaths would be – is what we’re doing …

“I do not talk about the politics, that is not my business. I simply reassure the committee that we are being orthodox in our approach to it.”