NZ Commits $4.2 Billion in Budget 2025 to Strengthen Defence, Spur Economic Growth

In a significant strategic pivot underscoring national and regional security, the New Zealand Government has unveiled a sweeping $4.2 billion investment in the country’s Defence capabilities as part of Budget 2025. Defence Minister Judith Collins described the announcement as a critical step toward “pulling our weight” in a turbulent geopolitical landscape, while simultaneously stimulating the domestic economy.

This robust funding allocation includes $2.7 billion in capital investments and $563 million in operating expenditure designated for priority projects outlined in the recently released Defence Capability Plan. The Plan maps out a $12 billion roadmap for revitalizing Defence over the next four years, including $9 billion in new commitments—subject to future approvals.

“Today we announce investments in critical tools that support our national and economic security,” Minister Collins stated. “This includes everything from interoperable missile systems and counter-drone technology to upgraded military aircraft and communications infrastructure.”

Major Defence Enhancements

Among the key projects funded in this round are:

• Replacement of the two Boeing 757 aircraft, vital for transporting troops, delivering humanitarian aid, and supporting diplomatic and trade missions.

• Replacement of the Seasprite maritime helicopters, enhancing naval aviation capabilities—previously confirmed but reinforced in this announcement.

• Modernization of the Javelin anti-armour missile systems, with new launch units to ensure extended range and interoperability with allied forces.

• Deployment of encrypted communication systems to ensure secure field communications for Army units.

• Introduction of counter-uncrewed aerial systems (UAS) that can disable potentially hostile drones near military or critical infrastructure sites.

• Detailed planning for the Devonport Naval Base redesign, securing its future role in national defence logistics.

• Investment in modern housing and facilities for Defence personnel, along with an upgrade of military vehicle fleets and information systems.

Economic and Strategic Impact

Minister Collins emphasized the dual-purpose nature of the defence spending, highlighting its potential to boost the local economy. The government plans to engage New Zealand-based businesses and contractors wherever practical, particularly in areas involving advanced technologies, infrastructure development, and digital systems.

“Ultimately, spending on Defence will result in economic benefits to everyday New Zealanders and New Zealand businesses,” said Collins. “We look forward to growing a defence industry that not only supports our military needs but also fosters technological innovation and job creation.”

This multi-billion-dollar initiative builds on the $957 million already announced earlier in the year for defence activities, personnel support, and estate development. The comprehensive strategy signals a bold effort to raise Defence spending to 2% of GDP by 2032/33, aligning New Zealand with NATO-standard benchmarks for defence investment.

A Strategic Global Role

Minister Collins highlighted that the modernisation is not merely domestic in focus but also positions New Zealand to play a more prominent role on the global stage.

“Our people are being called upon to go more places, more often and for longer,” she explained. “This funding ensures they are equipped, supported, and able to contribute meaningfully to global peace and stability.”

New Zealand’s shift in defence policy comes amid escalating geopolitical tensions in the Indo-Pacific and broader global arenas, where regional stability and supply chain security have become pressing concerns. By enhancing its military capability and readiness, New Zealand sends a clear message that it is ready to act as a committed partner in upholding international security.

The Defence Capability Plan also points to a long-term strategy that will see incremental enhancements, contingent upon cabinet approvals and evolving security needs.

With this landmark investment, the Government is setting a clear trajectory for a more assertive and capable Defence Force that not only secures New Zealand’s borders but also actively contributes to international stability. The 2025 Budget commitments mark a turning point for the country’s military doctrine, economic development, and global strategic posture—firmly establishing that New Zealand will “pull its weight” in an increasingly complex world.