New Zealand Unveils Defence Industry Strategy with $9 Billion Spending and Technology Fund
The New Zealand government has launched a new Defence Industry Strategy combining NZ$9 billion in defence spending over four years with a NZ$100–300 million military technology fund and updated local-industry participation requirements. The initiative aims to gradually raise defence expenditure to about 2% of GDP within eight years, restructure procurement processes, and encourage innovation, potentially creating opportunities for U.S. and other international suppliers.
The strategy emphasizes a “buy local” approach, promoting domestic supply chains while also offering co-development and offset pathways for foreign contractors. Future tenders will include provisions for companies to propose technological alternatives that could reduce timelines or costs, applying a Minimum Viable Capability approach. This method focuses on delivering threshold operational capabilities first, then iterating improvements over time based on user feedback and evolving technology.
Maritime Capability Updates
The strategy is reflected in ongoing upgrades to the Anzac-class frigates, including HMNZS Te Kaha, which now carries the CMS 330 combat system, Sea Ceptor air defence missiles (CAMM), and a SMART-S Mk2 3D radar, while retaining its 127 mm Mk 45 gun, Phalanx CIWS, and torpedo systems. These upgrades are integrated into the National Maritime Coordination Centre, providing real-time maritime surveillance and data fusion for security, biosecurity, and search and rescue missions.
The light naval fleet is also being expanded. Three Littoral Manoeuvre Craft Sentinel 1250 were delivered in 2023, designed with corrosion-resistant high-density polyethylene hulls and a low electromagnetic signature. A separate contract covers 17 Sea Boats 780R, with the first deliveries expected by the end of 2025. Local suppliers such as Hamilton Jet and General Marine Services play key roles in manufacturing and support.
Air and Land Modernization
In the air domain, the RNZAF has validated C-130J-30 self-protection systems domestically, conducting trials for chaff and flare release at RNZAF Base Auckland and the Kaipara Air Weapons Range. This approach reduces costs, accelerates entry into service, and develops local expertise in electronic warfare and system integration.
On land, the strategy promotes iterative development of FPV drones and additive manufacturing for parts and subassemblies. This allows rapid production of operational modules and enhances reconnaissance and precision strike capabilities at controlled cost. The emphasis on uncrewed systems also includes long-range UAVs for maritime surveillance, uncrewed VTOL vehicles to support shipborne operations, and uncrewed surface and subsurface vessels to improve coverage of New Zealand’s exclusive economic zone (EEZ).
Sustainment and Industrial Support
The Defence Capability Plan allocates NZ$300–600 million to strengthen logistics, maintenance, and local production of critical parts. Where outsourcing is needed, Australia is prioritized to reduce downtime, with services such as P-8A radar and military radio repairs conducted in Adelaide and Brisbane. Regional initiatives, including PIPIR, aim to provide in-theatre repair capabilities and reduce reliance on distant supply chains.
The strategy also introduces reforms to procurement and workforce development. An annual NZDF Procurement Pipeline will improve visibility for small and medium enterprises, and a procurement centre of excellence will streamline contracting processes. Close collaboration with Australian defence agencies is intended to harmonize industrial clearances and market access, enhancing resilience and operational readiness in the Indo-Pacific region.
Operational Implications
Modernized Anzac-class frigates and enhanced air, land, and uncrewed capabilities support maritime security, convoy escort, and anti-submarine operations, while local manufacturing and iterative procurement improve system availability. The strategy reflects a balanced focus on industrial capability, sustainment, and operational effectiveness to ensure that New Zealand can respond to evolving security requirements efficiently and sustainably.
✍️ This article is written by the team of The Defense News.