New Zealand Set for Defense Spending Hike
(Source: Forecast International; issued June 01, 2019)
The government of New Zealand unveiled its latest budget on May 30 for the 2019-2020 fiscal year (which runs from July 1 through June 30), with defense in line for a big hike in funding under the proposed outlay. For the upcoming fiscal year, Treasury will allocate NZD5.06 billion ($3.3 billion) toward defense, which amounts to a year-on-year hike of NZD1 billion, or 20 percent, over the current earmark of NZD4.054 billion ($2.64 billion).

Under the latest defense appropriations, the New Zealand Defence Force (NZDF) will receive the vast bulk of the funding, with 85 percent going toward personnel costs, training, housing, and development of assets, etc., while NZD766 million ($499 million) is earmarked for the procurement of new equipment and refurbishment or upgrade of existing materiel. The procurement of four Boeing P-8A Poseidon maritime patrol aircraft is a core priority under the broader procurement earmark, with the NZD2.34 billion ($1.52 billion) program costs being spread over multiple fiscal years out to 2026.

The upcoming fiscal budget is the first for the minority coalition government of Labour leader and prime minister Jacinda Ardern since the publication of its Strategic Defence Policy Statement 2018 on July 6, 2018, shortly after the launch of the current fiscal year.

This was to be followed within months by a new Defence Capability Plan, but a Defence Capability Review (“The Review” in Ministry of Defence parlance) only began setting out terms of reference in December 2018. The aim of the review is to align and update the previous Defence Capability Plan (unveiled by the previous government in June 2016 as a supplement to its White Paper) to better reflect the Ardern government’s priorities and fiscal strategy.

A Ministry of Defence spokesperson has stated that the government’s new Defence Capability Plan will be released soon.

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