New Zealand is set to overhaul its defense procurement policies and establish a military technology fund, a move aimed at bolstering the domestic defense sector, as reported by Reuters. This initiative seeks to enhance local industry participation in defense capability development, marking a significant shift in how defense contracts are awarded.
Under the revised rules, international suppliers will be required to demonstrate their commitment to involving local businesses in both delivering and maintaining defense capabilities. This change comes in response to the observation that most major equipment purchases are currently sourced from multinational companies, despite New Zealand’s industrial base comprising around 800 suppliers. The New Zealand Defence Force has been tasked with identifying opportunities for smaller, local enterprises to contribute to military supply chains, often acting as subcontractors to larger manufacturers.
In tandem with these procurement reforms, Wellington plans to create a military technology fund, which is projected to range between 100 million and 300 million New Zealand dollars (approximately $58 million to $174 million). This fund will aim to support the development of advanced military technologies and foster innovation within the defense sector.
Judith Collins, the New Zealand Defence Minister, emphasized the necessity of adapting to the fast-changing global context, stating, “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 expressed confidence in the nation’s talent and commitment, highlighting the need to build support systems that facilitate innovation.
This announcement is part of a broader strategy to modernize New Zealand’s military capabilities and enhance national security. The government has introduced the Defence Capability Plan, a comprehensive 15-year strategy that prioritizes essential investments over the next four years to ensure military readiness amid evolving global security concerns.
Additionally, the government revealed plans to significantly increase defense spending by $5 billion over the next four years, aiming to raise defense expenditure from 1 percent to over 2 percent of GDP within the next decade. The strategy also includes a focus on strengthening military ties with regional ally Australia, reflecting a commitment to enhancing collaborative defense efforts in the region.
