Capital Expenditure on Defence

IBISWorld forecasts capital expenditure on defence to surge by 38.1% in 2025-26, to reach $9.89 billion. The NZDF is responsible for securing New Zealand's sovereign interests and ensuring preparedness for joint operations. The NZDF operates through three key output capabilities; the New Zealand Army (Ngati Tumatauenga), Royal New Zealand Air Force (Te Tauaarangi o Aotearoa), or RNZAF and the Royal New Zealand Navy (Te Taua Moana o Aotearoa), or RNZN. Surging defence expenditure over 2025-26 can mainly be attributed to strengthening investment in a range of capability improvements and operational equipment. The 2025 Defence Capability Plan reveal that the Ministry of Defence is set to receive around NZ$9 billion in funding from early 2025 through to 2028. This includes over NZ$2 billion in maritime helicopters and an estimated NZ$600 million to NZ$1 billion on NZDF vehicles. These initiatives drive defence capital expenditure over the year, prompted by recent geopolitical uncertainty in regions like China, Russia and the US.

Over the past five years, expenditure has grown strongly on the army, RNZAF, and RNZN capabilities. The outbreak of COVID-19 had a mixed impact on defence spending, with reduced activity during the outbreak limiting expenditure in 2020-21. However, the NZDF was also involved in managing the outbreak, supporting expenditure.