The New Zealand Defence Force is preparing to lay off civilian staff, freeze the size of its regular force and make other spending cuts to plug a $30 million hole in its budget.
News of the cuts is another public blow for Defence, which has been suffering recruitment and retention problems amid concerns about the pay and conditions of serving personnel.
In a message to staff seen by Newsroom, Chief of the Defence Force Air Marshal Tony Davies said the military had begun to “rapidly reprioritise its budget” to ensure it could deliver its core activities in the current international security environment.
Davies said Defence had a “largely unmanageable” budget deficit of more than $130m due to rising costs across the board, with the cost of one type of ammunition increasing 600 per cent since 2020 and fuel costs per litre almost doubling over the same period.
“While we have identified expenditure that we can reduce, we still need to find around $30 million more to stay within budget. This issue is for the New Zealand Defence Force to resolve and we have a tough few months ahead.”
Military officials had decided not to increase the size of the Regular Force – the full-time personnel who make up the bulk of the defence force – so while training and recruitment would continue, the overall number of uniformed personnel would not increase next year.
Civilian staff were also likely to have to be cut, as a voluntary redundancy process was due to begin next month.
Davies said the Defence Force was considering other cost-saving measures, including reducing the leave requirement for both the military and civilian workforce, restricting civilian recruitment to essential roles only, reviewing its contacts with independent contractors and eliminating some vacant posts.
There would be no funding for pay increases for civilian staff, a position that had already been communicated to the various unions representing them, although Defence would remain committed in accordance with its collective agreements and other legal obligations.
Davies said further work would be done with senior leaders to identify other areas of work that could be reduced or stopped, but there would first be consultation on whether the changes would affect people’s jobs.
“We know these employment measures will be disappointing and have not been taken lightly. We will communicate and work with you in a transparent and open manner throughout this process.”
Defence did not have a “target” for staff reduction, but was looking across the organisation for areas where it could be more efficient and reduce costs.
“People who serve in the New Zealand Defence Force, whether uniformed or civilian, are individuals who believe in a collective notion of service to others and the values that unite us.
“These are the values we should all look to as we navigate and support each other through this time of uncertainty,” Davies said.
The NZDF will hold a town hall meeting at its Defence House headquarters on Thursday to discuss the changes, with a series of further visits to camps and bases in the coming weeks.
The Defence Force was not among the government agencies required to cut base spending by up to 7.5 per cent in the May Budget, which included $571 million in new funding for the military ($99 million of which came from savings made elsewhere in the NZDF budget).
But concerns remain over a lack of funding, with foundation improvements put on hold, an education support scheme cut and the wife of one staff member urging the government to improve poor pay and conditions.
In a statement largely echoing Davies’ message, a Defence spokesman confirmed it had been in touch with staff about a budget reprioritisation process.
Defence Minister Judith Collins told Newsroom it would not be appropriate for her to comment on what was an operational matter, but added: “The men and women of the New Zealand Defence Force do a great job protecting New Zealand and its interests, but these are tough economic times, and everyone is asked to review everything to ensure all funds are being used in the best way.
“The frontline is the priority and I am confident that the leadership of the New Zealand Defence Force will guide its people through what I know will be a challenging process.”
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