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Opinion: Australia and New Zealand’s strategic compasses have often pointed to different directions. Where Australia sees potential threats to the north, New Zealand’s historical perspective has been that geographic isolation mitigates risk, but that needs to be balanced against a shrinking world, explains Ross Browne of Museum Street Strategies.
New Zealand has been slow to recognise that the world is becoming a more dangerous place. The recent release of New Zealand’s Defence Capability Plan (DCP) 2025 signals a major change. Faced with what the government described as an “increasingly volatile world” and a “deteriorating strategic environment”, the plan outlines an ambition to rebuild the New Zealand Defence Force (NZDF), making it more combat-capable and ready for contemporary challenges.
For an Australian audience, understanding this plan is crucial, not only due to the deep ties between our nations but also because of the explicit focus on interoperability and acting as a “force multiplier with Australia”.
Ambition born from necessity
The DCP 2025 is framed by the government as a necessary reset. The plan has a 15-year horizon but focuses on the next four years (2025–28). Over the next four years, $12 billion is allocated to major capabilities and essential support. Two-thirds of that is new spending. In contrast, the previous (2019) plan covered a10-year period with a spending envelope of about $20 billion.
The NZDF’s need to “rebuild” is driven by historic underinvestment. With defence funding closer to 1 per cent of gross domestic product (GDP) than 2 per cent, the stated ambition of the plan is for defence spending to lift to more than 2 per cent of GDP in the next eight years. Absorbing this step change will be challenging.
Bases are antiquated. Some core kit is decades old. Stand-off strike capability is virtually non-existent. Strengthening and expanding capabilities will take time. Like Australia, New Zealand faces challenges in finding the right people and building the systems to manage increasingly complex technology.
But the ambition is clear: transform the NZDF into a force better equipped for modern conflict.
This involves developing a navy with new combatant, patrol and amphibious ships to operate across the Pacific and Southern Ocean. In the short term, enhancing strike capabilities for Anzac frigates and P-8s is on the radar.
The NZ Army should be capable of independent operations but also seamless integration with Australian forces. It will receive enhanced strike and sensor capabilities. Armoured and other vehicles will be replaced. Special operations forces will receive new investment.
In the air, new P-8 and new C-130Js will be joined by new maritime helicopters. Beyond 2029, the future of the NH90 will be considered. Replacement with different aircraft is on the cards.
Bolstering cyber and information warfare capabilities, alongside modernising the workforce and infrastructure, completes this picture of a more robust, lethal and future-focused defence posture.
A plan for now, an eye on the future
The NZ DCP’s four-year focus within a longer-term strategy highlights a crucial aspect of modern defence planning: adaptability. No plan can be static. Historically, DCPs are a “point in time” assessment, establishing direction while retaining the flexibility to pivot as requirements changes, technology evolves and threats morph.
Crucially, the NZ plan signals an openness to innovative and potentially more cost-effective solutions. Investments in uncrewed autonomous vessels, long-range remotely piloted aircraft enhanced cyber security, space capabilities and a dedicated Defence Science and Technology uplift and Technology Accelerator.
This focus on asymmetric capabilities, advanced technologies and digital modernisation presents significant opportunities for industry.
For Australian defence industry operating at the cutting edge of autonomous systems, cyber, ISR (intelligence, surveillance, reconnaissance) and advanced manufacturing, NZDF’s modernisation drive could open further avenues for collaboration. NZ drone maker Syos Aerospace recently signed a deal with the UK to supply unmanned military vehicles for use in Ukraine. NZ’s technological base is not insignificant.
The DCP emphasis on interoperability suggests the potential for joint projects and leveraging shared technological advancements across the Tasman. But this does not necessarily mean just buying what Australia has. New Zealand’s strategic environment and defence priorities can differ. Pockets aren’t as deep. Memories of past projects remain mixed – the NZDF now operates regionally orphan fleets of Sea Sprite and NH90 helicopters, having followed Australia’s lead looking for synergies.
Australia has a focus on regional power projection, often requiring high-end, heavily armed platforms optimised for high-intensity conflict, acting alone if necessary. New Zealand values versatility, affordability and coalition operations. Capabilities frequently complement, rather than duplicate, Australian investments. HMNZS Aotearoa, the ice-strengthened fleet tanker, is the only tank either navy has capable of operating in the deep south.
Australia’s defence procurement often includes significant “sovereign build” requirements, aiming to develop and maintain domestic industry. While this is a strategic imperative for Australia, it can lead to higher unit costs. New Zealand will not always benefit these sovereign build premiums and could find more cost-effective solutions by exploring a wider range of international suppliers.
Conclusions
New Zealand’s Defence Capability Plan 2025 is more than just a shopping list.
While facing its own unique challenges and resource constraints, the NZDF’s direction offers both reassurance and opportunity as Australia pursues its own ambitious defence strategy.
Understanding and potentially collaborating on aspects of NZ’s journey presents a pathway to enhanced collective security and a more stable region. Our compasses are now pointing to the same direction.
Ross Browne is a director of Museum Street Strategies, NZ’s only specialist defence and national security public affairs firm.
