New Zealand military proposes civilian layoffs to plug budget hole

New Zealand military proposes civilian layoffs to plug budget hole

By Lucy Craymer

New Zealand's military said on Thursday it plans to ask civilian staff to volunteer for layoff packages and to make other cuts as it tries to plug a NZ$130 million ($79.04 million) budget shortfall.

The military had identified ways to reduce spending by NZ$100 million, but a further NZ$30 million needed to be found to remain in budget, a New Zealand Defence Force spokesperson said.

New Zealand reduced its defence spending for the current fiscal year to 0.9% of gross domestic product, down from 1% the prior year, according to the defence force.

The drop in budgeted spending came as recent government reports have warned about old equipment, and the military has struggled to hire and retain personnel resulting in three of the country's nine ships being idled.

"The New Zealand Defence Force (NZDF) can confirm that it informed staff yesterday that a process has begun to rapidly reprioritise its budget as it works to keep ships, aircraft, equipment and personnel ready to respond where needed," the spokesperson said on Thursday.

The military in August would invite expressions of interest in voluntary layoffs from the civilian workforce, the spokesperson said, with other cost savings measures to be considered including restricting recruitment and cutting some vacant positions.

There will be no increases in civilian staff and health practitioners' pay or military base pay, the spokesperson added.

New Zealand Defence Minister Judith Collins said in a statement the financial shortfall was an "operational matter" and it would be inappropriate to comment.

Despite the budget challenges, the government wants to improve the state of the country's armed forces and take on more regional and global missions as it raises concerns about increasing geopolitical challenges.

Prime Minister Christopher Luxon said last week that New Zealand needed to stand up for the international rules-based order as potential military flashpoints loom in the Indo-Pacific region.