Asked whether government was now re-investing money to cover large Defence Force cuts since 2010, Dr Coleman said: "No, absolutely not.
"There's been a savings programme as well that's saved $204 million. Over time it will save up to $350 million. This is money on top of that.
"That money has already been directed to the frontline. But this is new money which is needed to run the capabilities and enhance Defence's overall capabilities."
A white paper outlined a plan to cut the Defence Force budget by $400 million a year in 2010, partly by converting hundreds of military jobs into civilian jobs.
The $535.5m in operational spending would allow the NZDF to maintain its current capabilities, and sustain and grow personnel numbers over time.
It would also allow the Defence Force to modernise and upgrade its capability.
Dr Coleman said: "There has been a considerable investment in Defence under this Government. In the last year, we purchased new naval helicopters, army trucks and a pilot training package."
He said government would soon be awarding contracts for the SAS battle training facility and for the Navy's frigates.