Foreign Minister Winston Peters has secured a $621 million five-year funding plan for the Ministry of Foreign Affairs to boost staffing and its ability, among other things, to negotiated free trade agreements.
It will also fund new diplomatic posts in Sweden and Brisbane and increase Ministry of Foreign Affairs and Trade staff abroad by 50 per cent or 100 people, as well as boost home-base staffing.
The announcement was made a week after Mr Peters as New Zealand First leader announced his party's opposition to the free trade agreement with China.
Mr Peters has made it clear he would expect the package to be part of any power deal involving his party.
National Party leader John Key indicated that under his policy of capping the core public services at 36,000 people, the 100 new staff would have to be offset against cuts elsewhere.
The increase was met with delight by former diplomats in Wellington at the Institute of International Affairs as "historic".
Former foreign affairs secretaries Mervyn Norrish and Richard Nottage and former United States ambassador Denis McLean all congratulated Mr Peters.
Mr Peters described the plan as a "seismic re-engineering" of the foreign service.
The ministry would get $523 million in new operational funds over the next five years and a capital injection of $98 million.
To put it into perspective, the ministry's present annual operating budget was around $278 million, he said.
He painted a picture of a service which was overstretched with the proliferation of trade agreements, the troubles in the Pacific regions, the emergence of climate change as a global issue, the need to expand New Zealand's presence in Asia and general consular services.
"Foreign Affairs still has fewer staff today than 20 years ago, and those staff seem to be working permanently in overdrive," Mr Peters said.
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Mr Peters acknowledged that trade was Phil Goff's responsibility but Mr Peters is responsible for the ministry's resourcing.
More than 400 free trade agreements were now in existence or being negotiated around the world.
"Keeping New Zealand interests to the fore in such a spaghetti bowl is a major undertaking," he said.
New Zealand was in trade agreement negotiations with Malaysia, Asean, and the Gulf Co-operation council and was holding discussions with Mexico, India and South Korea and it was no secret it was interested in better access to Japan and the United States.
The funding would be used for:
* An increase of more than 100 (an increase of more than 50 per cent) diplomats and support staff overseas.
* More staff in Wellington targeting high-priority areas such as Asia, the Pacific, Latin America, trade and environment.
* New posts in Stockholm and Brisbane, with a diplomatic presence added to the trade work of the Consulate-General in Melbourne.
* Extra staff and resources to Asian posts aimed at improving work with groupings such as Asean and the East Asia Summit.
* An increase in trade policy capacity, overseas and in Wellington, to push towards trade negotiations with key markets such as Korea, Japan, the United States, India and Mexico.
* Reinforced posts in troubled Pacific countries and more resources for related work in Wellington.
* Strengthening the embassy in Tehran to allow greater engagement with Pakistan and Afghanistan.
* More staff at several two-person overseas posts.
* Increases to the Pacific Security Fund and Asia Security Fund to build regional capacity to combat terrorism and other threats.
National foreign affairs spokesman Murray McCully said either Mr Peters had worked with officials to improve the bid he put in last year for a large increase, or he had said to Finance Minister Michael Cullen "you need my support, give me the money".
The Green Party applauded the new funding. additional reporting NZPA