Much work was being progressed but “we do not say for a moment that we have completed that task … it will be ongoing”.
Water protection capability was also low, at 57%, in part due to the sinking of the HMNZS Marawanui in 2024, for which three navy officers have been charged. The gap will be plugged when the HMNZS Otago becomes water-ready some time in the coming year.
Part of the overall readiness equation is also retaining staff and while attrition had come down to 8.5% over the last year, Davies told the committee there remained “major gaps” including for “the most senior people”.
“It’s a challenge to fill those gaps. We can’t just go out and recruit a ship’s captain or a P8 pilot or head of engineering and expect to be able to deploy them a few minutes later.”
There were many financial tugs on the NZDF, among them the need to buy more drones, or uncrewed vessels.
Davies said the NZDF had two drones, called tahi and rua, which had been used for 221 days at sea for the NZDF, Customs and police, including in Fijian waters and around Northland and Bay of Plenty.
Budget 2026 included funding for more drones, including one for the Southern Ocean, but none can be weapons-capable.
Penk was also asked about pressure from the US to increase New Zealand’s defence spending, which currently sits at about 1.2% of gross domestic product (GDP).
The DCP is a blueprint for increasing this to 2% by 2032/33, which Penk said would be met if the current spending trajectory is maintained.
Defence Secretary Pete Hegseth with President Donald Trump in the Oval Office. Photo / Demetrius Freeman, The Washington Post
US Secretary of Defence Pete Hegseth recently said that New Zealand was freeloading off the US because its defence spending fell short of the 3.5% of GDP that the US now expected from its allies and partners.
Penk told the committee that the Government stands by its 2% commitment by 2032/33 as “the right level for us”.
“The position of this Government is that we will make decisions we consider the right ones for the New Zealand people, consistent with independent foreign policy. The views of other nations are interesting but not determinative for the decisions we make.”
Penk, who is also Minister for Veterans, was also asked about the recent High Court ruling that Veterans’ Affairs had been getting it wrong over Agent Orange and other veteran welfare claims. The ruling means the Government might have to pay over a billion dollars in additional support to veterans.
Last year, Penk did not rule out legislating to overturn the court ruling, but today he said the Government was “responding in a way consistent with court ruling” and Budget 2026 provided money to process additional claims.
“It’s a complex area. We will provide the necessary resource to meet legal and moral obligations, regardless of what interpretation of that legislation may be preferred.”
Waitangi Day celebrations at Waitangi included a gun salute from the HMNZS Canterbury. Photo / Dean Purcell
Budget 2026 saw an additional $1.58 billion pumped into the military, which included extending the operational life of the Royal New Zealand Navy’s Anzac-class frigates and the HMNZS Canterbury, buying drones for surveillance in the southwest Pacific and Southern Ocean, building modern housing on military bases and a new training facility at the army’s Linton camp.
This year’s Budget aimed to keep old ships available for longer, pump money into personnel in key occupations and pave the way for new technology and a shift towards a more capable and modern force.
The spend lifts NZDF’s budget from $5.064b in 2025/26 to $5.491b in 2026/27.
Most of the money – almost $4.2b – is for the NZDF’s day-to-day work. About $3.5b of that is to keep the military ready to do what the Government requires, while about $621 million is for operations that protect New Zealand’s territory and support security work overseas and in the region.
The NZDF also gets more money for equipment and infrastructure projects, with capital up from $892.7m this year to $1,062,000,000 next year.
Big-ticket spending was led by $76.8m to keep the frigates and the HMNZS Canterbury operating. The frigates remain New Zealand’s main naval combat ships. Canterbury is the Navy’s sealift and amphibious support vessel.
Derek Cheng is a senior journalist who started at the Herald in 2004. He has worked several stints in the press gallery team and is a former deputy political editor.