Cuts to Defence Force spending could be delayed, Defence Minister Jonathan Coleman says.
Dr Coleman told RadioLive this morning the cuts were likely to be put on hold for up to two years, because they could jeopardise operations.
"We've made a certain number of savings so far. We know we can get to the $250 of the $350 million, but the last $100 million might be quite tough, and we may have to delay by a year or two," he told RadioLive.
The Government told the Defence Force (NZDF) in 2010 to reduce costs so money could be redistributed within the military in order to save $350-$400m.
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In response to a call for cuts, the NZDF initiated a civilianisation project which would convert 1400 military positions into civilian jobs.
Earlier this year Auditor-General Lyn Provost issued a highly critical report on the cuts, saying they would fail to meet savings targets and would lead to a drop in morale and capability.
Her report was critical on numerous fronts - including the fact that the NZDF told the Government it would convert 1400 military positions into civilian jobs without knowing how many military positions it would need from 2015.
The initiatives had achieved only "limited success" and would not achieve NZDF's target of converting 1400 military positions and saving $20.5m a year by 2015, Ms Provost said.
"Instead, 600 military positions will be converted and we estimate savings of $14.2m a year by 2014/15. In addition, a drop in morale and increase in staff attrition has led to reduced NZDF capability."