China has just announced that it will increase its arms budget by 8 per cent this year. This followed a 10 per cent increase last year.

China now spends 2.1 per cent of its GDP on the military although, as with many countries, the lack of transparency and creative accounting suggests that this figure may actually be much bigger than what is reported.

Despite such caveats, Russia is reported as setting aside 4.5 per cent of its GDP for the military.

Australia has recently announced its intention to increase their spending from the current NZ$32 billion a year to reach the target of 2 per cent of their budget on military matters by 2020 at a cost of $42 billion.


President Obama is currently chastising Britain to pay its "fair share" and spend 2 per cent of their GDP on defence. Even poor countries like Fiji have increased their military budget to about $80 million a year. This recently manifested itself in 27 containers of Russian-made weapons, with more en route.

Most countries are not only upgrading their military capacity, they are also expanding. Collectively, the world has gone from spending $1675 trillion on weapons in 2001 to some $2590 trillion today. This is over 10 times the amount spent globally on foreign aid each year.

Conflicts in the Ukraine, the Middle East, and tensions in the South China Sea have seen many countries rethink their military needs. The United States currently spends 3.5 per cent of its GDP on the military.

Their sheer economic size means that their defence budget is close to $880 billion a year. This figure does not include the $1.4 trillion President Obama intends to put into modernising US nuclear capacity in the decades ahead.

The result is that even when China announces it will increase its military budget, taking it up to close to $220 billion a year, it is still less than a quarter of the size of the standard military budget of the United States. Similarly, Russia at $97 billion a year, is overshadowed.

The question is, how is New Zealand going to respond to such trends?

The current spend here is about $3 billion a year, at 1.2 per cent year of the annual budget. Many of our major assets, such as the two frigates and six Orions, will need to be replaced within the next decade.

Possible replacements for our five Hercules, which are working on platforms over five decades old, cost about $300 million each.


New frigates cost about $1.4 billion a vessel. The soldier that cost $450 to outfit in World War II now costs about $25,000.

Whether the total amount and type of these assets are sufficient to perform our current responsibilities under the auspice of the United Nations, or on behalf of our friends, is already a matter of debate.

It is also the core of the debate, as our military needs are intimately connected with how we see our place in the world.

A significant part of the Australian justification to increase their expenditure on their military is due to rising tensions in the region and the South China Sea.

In the immediate region, the fact that Fiji has now moved to Russian-sourced weapons, linked to defence agreements with Russia will only get more tense when Mr Bainimarama decides to welcome visits from Mr Putin's navy in Suva.

In the wider region, the Australians now seem to be on the cusp of new missions with the United States. They seem to be preparing to join them in doing speed runs past the disputed rocks, reefs or atolls, as occupied by the Chinese.

Revelations that China appears to have placed air defence systems and military aircraft on Fiery Cross reef in the Spratleys is particularly unfortunate after their President had pledged not to militarise the disputed islands in the region in late 2015.

This promise was despite the fact that many of the other disputed islands, such as Thitu held by the Philippines, Itu held by Taiwan, and Swallow Island held by Malaysia had been militarised earlier.

To increase military budgets as a justification to stir the pot in this region which needs to be demilitarised is questionable. What is of even greater debate when it comes time for us to reconsider our military budget in this area is whether we see ourselves as playing a supporting role, or not.\

Alexander Gillespie is Professor of Law at the University of Waikato.
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