Defence Minister Dr Jonathan Coleman said his ministry would start investigating the drone project in 2018.
There had been no Cabinet discussion on drones or "remotely piloted vehicles" and Coleman confirmed there was no need to develop drones with a strike capability.
Labour defence spokesman Phil Goff said the drones could be a cost-effective surveillance tool in New Zealand's Exclusive Economic Zone, where incursions would probably increase. There was "some potential in illegal migration" but drug smuggling and illegal fishing were more likely threats.
New Zealand First leader Winston Peters said unarmed drones would never be a substitute for firepower. "So you've discovered a boat that's illegally fishing, what do you do now? That's when you need the firepower to ensure your laws are, in a huge exclusive economic zone, observed." Peters said New Zealand had "grossly" under-invested in the navy for years, adding "for a maritime nation, that's very foolish".
Coleman responded that it was wrong to suggest the navy was under-invested and understaffed. "We've invested $242 million in new naval helicopters and $446 million in the frigate combat systems upgrade. Work continues on the frigate platform systems upgrade and Project Protector fleet enhancements."
Coleman said morale was rising, the Navy's regular force numbers increased by 7 per cent in the year to June, and staff turnover was now well below historical averages.