New Zealand is overhauling its defence procurement strategy with a bold initiative designed to bolster local industry and foster innovation in military technology. The move, announced by Defence Minister Judith Collins, signals a strategic shift towards greater self-sufficiency and collaboration with domestic suppliers, positioning the country to meet evolving security challenges with agility and resilience.
The new framework mandates that international defence suppliers must now demonstrate how they will integrate New Zealand’s local industry into their operations, from delivery to long-term sustainment. This requirement is expected to open doors for small and medium-sized enterprises (SMEs), enabling them to participate as subcontractors to major defence manufacturers. While New Zealand boasts around 800 defence suppliers, the majority of large-scale equipment purchases have historically gone to multinational firms. By prioritising local involvement, the government aims to create a more inclusive and competitive defence industrial base.
A cornerstone of the initiative is the establishment of a dedicated military technology fund, valued between 100 million and 300 million New Zealand dollars ($58 million to $174 million). This fund will support the development of advanced military technologies, fostering innovation and ensuring that New Zealand’s defence capabilities remain at the cutting edge.
“When the world around us is changing at such a pace, we need to change our approach to how we equip our Defence Force, and we need to work in partnership with industry to be better together,” Collins said. “We have the talent and the will. We now need to build the support and clear the way for innovation.”
The announcement aligns with New Zealand’s broader defence strategy, which includes a significant increase in military spending and a renewed focus on regional security partnerships. In April, the government unveiled plans to boost defence expenditure by $5 billion over the next four years, raising it from 1 percent to over 2 percent of GDP within the next decade. This financial commitment underscores the government’s determination to modernise the New Zealand Defence Force (NZDF) and address emerging threats.
The Defence Capability Plan, a 15-year strategy, outlines key investments over the next four years to enhance readiness and adapt to global security challenges. Central to this plan is closer military cooperation with regional ally Australia, reinforcing New Zealand’s commitment to collective defence and regional stability.
By prioritising local industry engagement and innovation, New Zealand is not only strengthening its defence capabilities but also fostering economic growth and technological advancement. The new procurement rules and military technology fund will likely spur greater collaboration between the public and private sectors, creating a more dynamic and resilient defence ecosystem. As geopolitical tensions continue to evolve, New Zealand’s strategic shift could serve as a model for other nations seeking to balance international partnerships with domestic industrial development.