Defence Minister Chris Penk used the opening hours of the Shangri-La Dialogue in Singapore on Friday to tell the region that New Zealand will nearly double its military spending over the next eight years, with the long-promised lift to 2 percent of GDP now framed as a settled trajectory rather than an aspiration.
Penk, who replaced Judith Collins in the portfolio in April, said New Zealand would aim for “a smooth and steady upward trajectory to 2 percent” of gross domestic product by the early 2030s. The Defence Capability Plan released by the government in April 2025 sets the same benchmark, with a target year of 2032/33. New Zealand has spent just over 1 percent of GDP on defence for the past two decades, leaving the country well below most other small advanced economies and a long way behind the new spending norm inside NATO.
The announcement landed alongside the first detailed accounting of how Budget 2026 starts paying for it. The defence vote rises by about 6 percent in nominal terms in the coming year, with $1.58 billion in new funding split between $880 million in operating spend and $700 million in capital, according to the Budget papers reported by the New Zealand Herald. Almost $77 million of that goes to keeping the ageing Anzac frigates and the strategic sealift vessel HMNZS Canterbury in service while their replacements are scoped, with a further $64 million for future air mobility and roughly $60 million for upgraded military housing at Waiōuru.
Penk used Singapore to reveal that two new uncrewed surveillance aircraft are now in the pipeline. One will work the South-West Pacific from existing patrol bases, the other is being specified to operate in polar conditions and to launch from Royal Navy vessels operating in the Southern Ocean. Unit prices have been withheld for what officials call commercial sensitivities. Decisions on Anzac frigate replacements are still some way off, with the British Type 31 and a Japanese Mogami variant both in serious contention, and a replacement for HMNZS Canterbury is also being scoped in the same procurement window.
The minister told Reuters in Singapore that the strategic logic for the lift was about more than just dollars. “I think the word inter-operability is an important one for us and I would add inter-changeability, certainly with regard to Australia, who’s our nearest neighbour but also a formal ally,” he said, echoing language used by the Australian government as it stitches together AUKUS-era equipment fleets with the New Zealand Defence Force. “I think it’s important that we are very visibly present … in the Asian region and we do things in conjunction with the likes of Korea and Japan.”
The 2 percent target now puts New Zealand on the same nominal track Australia announced two years ago. Australia’s current defence budget sits at 2.02 percent of GDP and Canberra has pledged to climb to 3 percent by 2033 as the cost of AUKUS submarine acquisition starts hitting the books. NATO members went further again at last year’s Hague summit, agreeing a combined 5 percent of GDP target by 2035, with 3.5 percent for direct defence and 1.5 percent for defence-related infrastructure. New Zealand is not bound by NATO numbers, but Penk made clear in Singapore that allied benchmarks are now the reference point ministers expect to be measured against.
Domestic reaction has so far run along familiar lines. Greens co-leader Marama Davidson said Budget 2026 was “delivering billions of dollars for landlords, fossil fuel dependency, and on new military equipment” while leaving lower-income households short, in a statement reported by The Spinoff. Te Pāti Māori co-leader Rawiri Waititi accused the government of “deliberately deprioritising Māori aspirations while funding defence, prisons and infrastructure”, telling the New Zealand Herald that the overall budget had risen by $13.4 billion while Māori-targeted spending fell by $34 million. Labour’s response so far has focused on the 8,700 public service jobs being shed across the same Budget rather than on the defence trajectory itself.
The political question now is whether the 2 percent floor holds across a change of government. Both Labour and the Greens supported the broad direction of the previous Defence Policy Review and have not opposed lifting capability spending in principle, but neither party has yet publicly committed to maintaining the full 2 percent track if elected later this year. With the 2026 general election only months away, every party that wins seats in Parliament will inherit a Defence Capability Plan that now bakes in fleet replacements running well into the 2030s, with their own cancellation costs attached.
For voters, the upshot is a real choice about how much of the Crown’s growing fiscal envelope goes to uniforms and platforms, and how much to health, housing and education. You can compare every party’s published positions on defence, foreign policy and the wider Budget in our updated voting tool ahead of polling day.
What do you make of the Government’s plan to lift defence spending to 2 percent of GDP by 2033? Is the timeline about right, too slow, or money that could be better spent elsewhere? Drop your views in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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