Christopher Luxon says National keen on lifting defence spending, party discussing $1.7b costs

National leader Christopher Luxon is keen on lifting defence spending. Photo / Mark Mitchell.

National supports the idea of New Zealand lifting its level of defence spending, possibly to a level of 2 per cent of GDP, the level regarded as something of an international benchmark.

National leader Christopher Luxon told the Herald that New Zealand had an independent foreign policy but that to "stand up for our values" New Zealand would need to find a way to back up its commitments.

"You've got to say 'how do we back up our words with actions?' and so getting back to making sure that we are carrying our responsibilities, that we have invested enough in defence, those are conversations that we have had in the party," Luxon said.

National's caucus had its weekly meeting yesterday but Luxon said the conversation about defence policy was actually the result of a "series of conversations we've had over the last six, seven months or so", which had recently become more explicit.

"We want to stand with our friends and our allies and our partners. That means we need to be able to back up our commitments and our words - we've got to make sure we are carrying out our piece of it - if that means looking at defence spending, so be it."

The OECD's measurement of defence spending has New Zealand's spend at about 1.5 per cent of GDP. Lifting spending by 0.5 percentage points would mean an increased spend of about $1.7 billion.

Yesterday Act also challenged the Government to lift defence spending, drawing a searing rebuke from Prime Minister Jacinda Ardern that this could lead to cuts in public services, when combined with Act's tax cut pledge.

Luxon conceded this might not be possible, given current constraints on public spending.

National has promised to adjust tax brackets, costing $1.7b if implemented this year -more if implemented after the next election - plus the removal of the top tax bracket, costing $600m, and the reinstatement of interest deductibility, costing $350m-$490m.

The party is looking to fund those changes in its first term in government, when each new Budget is meant to have $3b of new operating spending.

When asked whether National could afford to increase spending levels, Luxon said that was "the conversation".

"I'm not sure we can - the point and the principle is one we're quite interested in.

"We have to go through budgets and work out how we can do it, and how we can manage it - obviously it's a challenging time economically for New Zealand."

Luxon criticised the Government's decision to review defence spending, potentially leading to spending being pushed into the future.

"I don't think the message the New Zealand Government has given recently that they want defence cuts at this time is the right time to be doing anything like that."