New Zealand boosts defence spending with drones, fleet renewal focus

New Zealand set aside NZ$1.58 billion in new defence funding, a package that puts maritime security, drone systems and fleet renewal at the center of Wellington’s next military phase. Defence Minister Chris Penk said the money includes NZ$880 million in additional operating funding and NZ$700 million in new capital spending, and he cast the move as part of a broader decade-long push to lift capability, not a one-off splurge.

The timing reflects a hard reality for the Royal New Zealand Navy. Its main maritime combat power still rests on the Anzac-class frigates HMNZS Te Kaha and HMNZS Te Mana, which entered service in 1997 and 1999. Most of the fleet is expected to reach the end of its design life by the mid-2030s, while the tanker HMNZS Aotearoa remains the exception. The government is also paying for critical maintenance on the frigates and on HMNZS Canterbury, the Protector-fleet amphibious and military sealift vessel that moves personnel, vehicles and supplies around New Zealand’s coast and overseas.

That bridge strategy is buying time for a much larger reset. The Maritime Fleet Renewal Programme is designed to fund two classes of drones, one for long-duration intelligence, surveillance and reconnaissance missions across the South-West Pacific and another polar-capable uncrewed system for operations from Royal New Zealand Navy vessels in the Southern Ocean. Officials said in March that the polar-capable project was still at the market-research stage, not yet a commitment to buy a specific system. The long-range drone project has been described separately as carrying a ballpark budget of NZ$100 million to NZ$300 million over four years.

The ministry says the renewal program is also meant to rethink how the maritime system works, with fewer ship classes, better concurrency across ships and a more efficient workforce. That matters in a country whose military spending stood at 1.19% of GDP in 2024, far below the level Wellington now says it wants to reach, more than 2% within eight years. Since the Defence Capability Plan was released just over a year ago, Penk said total new investment has reached NZ$5.8 billion, part of a wider $12 billion defence package over four years that includes $9 billion in new money.

The strategic message goes beyond accounting. As New Zealand deepens defence cooperation abroad, including support for a Norway-led multinational effort training Ukrainian forces in Poland, it is also signaling that its own neighborhood has changed. With frigate replacement options narrowed to Japan’s Mogami-class and Britain’s Type 31, Wellington is moving to keep sea lanes, alliances and Pacific reach intact while it decides what kind of Indo-Pacific security partner it wants to become.