A personnel advocacy group says the Government’s funding for defence capability is wasted if a market pay gap persists.
The $12 billion Defence Capability Plan, unveiled last year, includes $9b of new spending over four years.
It will take New Zealand’s defence spending from just over 1% of GDP to more than 2%.
The plan includes new strike capabilities, new maritime helicopters and VIP aircraft, drones and accommodation upgrades.
Mission Homefront co-founder Erin Speedy said attrition would rise if personnel weren’t properly compensated, and the NZDF would lose its best capability – its people.
“If there’s no one there to operate this equipment, these drones, these ships … all this brand new fancy gear, then it’s just going to sit there gathering dust.”
Mission Homefront co-founder Erin Speedy says attrition will rise if personnel aren’t properly compensated. Photo / Mission Homefront.
In Budget 2026, the NZDF received $120 million over four years for pay and remuneration.
She said this boost was a Band-Aid.
Every few years, pay fell significantly behind the market rate, attrition spiked and the Government injected a one-off funding package.
“If you look at the last Government investment into pay in 2023, that was a $419m targeted pay package … that was meant to make a massive difference in bringing salaries up to at least 5% within market. And three years later, you know, we’ve seen it drop significantly already by another 5%.”
The NZDF said it operated in a fiscally constrained environment, like other public sector agencies.
“The market pay gap within base salaries of NZDF personnel is undesirable. However, it should be noted the NZDF provides a number of benefits to our military personnel, including an additional payment on top of base salaries that recognises the unique nature of military service.”
It was also implementing Critical Continuity Payments as a targeted response to retain key ranks within a small number of critical trades and qualifications across the Royal New Zealand Navy, New Zealand Army and Royal New Zealand Air Force.
It said it was working through how the $120m funding boost for remuneration would be allocated.
“The NZDF will be prioritising increases to military and civilian pay tables.”
Defence Minister Chris Penk says work is being done to retain personnel. Photo / Mark Mitchell
Defence Minister Chris Penk said work was being done to retain personnel and address the historic underspending.
That work included the $120m pay package, continuity payments for key personnel and investing up to $600m into modernising military homes.
He said the Government wanted careers in the Defence Force to remain attractive, adding that attrition rates had stabilised and had halved since their 2023 peak of nearly 16%.
“It’s worth noting other benefits on offer to NZDF personnel include discounted financial advice like retirement planning and a mortgage brokering service, discounted insurances, access to Defence Force superannuation schemes, as well as the Defence Force providing medical and dental services for military personnel.”
Lachlan Rennie is an Auckland-based multimedia journalist for Newstalk ZB covering science, defence, technology, community issues and general news. He previously studied journalism at the New Zealand Broadcasting School before joining NZME in 2024.