New Zealand's defence budget returns to growth

New Zealand has announced a strong increase in its defence budget for 2021–22, reflecting the country’s robust economic recovery to the Covid-19 pandemic.

Budgetary documents issued by the New Zealand Treasury on 20 May show that the total military expenditure for 2021–22 will be NZD5.18 billion (USD3.7 billion), a year-on-year increase of nearly 11% over the ‘estimated actual’ defence budget for 2020–21, which was NZD4.68 billion.

The figure for 2020–21 – announced in May 2020, shortly after New Zealand’s worst Covid-19 outbreak – represented a decline against the previous year of about 7%, with cut funding reappropriated for the country’s Covid-19 recovery fund.

New Zealand’s defence budget comprises two appropriations: ‘Vote Defence Force’ and ‘Vote Defence’.

In 2021–22, the Vote Defence Force – covering salaries, training costs, and military preparedness – has been allocated NZD4.28 billion, an increase of 8% against the estimated actual for last year of NZD3.96 billion. The ‘Vote Defence’ expenditure – including funding for procurement and refurbishment of defence equipment – is NZD900.5 million, a rise of 25% over the NZD720.5 million allocation last year.

Contained in the Vote Defence Force allocation is funding for the New Zealand Defence Force (NZDF).

In 2021–22 the Royal New Zealand Air Force (RNZAF) received NZD985.3 million, an increase of 3% over the estimated actual figure for 2020–21 of NZD954.4 million. The New Zealand Army and Royal New Zealand Navy (RNZN) are allocated NZD886 million and NZD500.2 million, increases of 2% and 1% respectively.

The Vote Defence Force allocation also includes NZD1.16 billion for capital expenditure. According to the document, this represents an increase of 36% over the NZD856.4 million allocation in 2020–21.