Defence Minister Judith Collins, Australian Defence Minister Richard Marles, Foreign Minister Winston Peters, Australian Foreign Minister Penny Wong. Photo / Thomas Coughlan
ANALYSIS
The real test of this week’s historic “ANZMIN” meeting between the Foreign and Defence Ministers of New Zealand and Australia will be in May, when Finance Minister Nicola Willis delivers her first Budget.
While the focus this week was on Aukus, and rightly so, as Aukus represents one of the most significant foreign policy questions faced by New Zealand in a generation, we should not lose sight of the non-Aukus near-term questions thrown up by the meeting.
We shouldn’t forget that any decision on pillar ii association with Aukus is some time away. Australian Deputy Prime Minister Richard Marles reminded us on Thursday that any decision to expand the non-nuclear pillar ii would happen “in the longer term”.
More significant for the near term was the two countries’ restating in stronger terms than before their commitment to interoperability, which means the ability of the two countries’ defence forces to work seamlessly together.
Marles said yesterday’s meetings had seen the countries commit to “constructing two defence forces which are seamless in the way in which we are operating”.
The main cost of building an interoperable defence force is the acquisition of defence equipment. Interoperability in defence equipment has been on the agenda since then-Prime Minister Chris Hipkins raised it in his first official meeting with Australian Prime Minister Anthony Albanese last year.
We may get to see how this works in practice fairly soon. Thanks to last year’s election, the Government is currently in the middle of a late budget cycle, with ministers putting up and debating budget bids.
Defence Minister Judith Collins has been fairly candid that she would like to see a boost to defence. The NZ First side of the Government is keen too - building on the large defence asset purchases it spearheaded when in coalition with Labour, particularly the purchase of new P-8 aircraft.
(For the sake of fairness, the current Government cannot argue convincingly that defence spending languished under Labour’s second term. Labour increased spending each year and put its focus on retention).
NZ First, no longer holding the Defence portfolio, is nonetheless keen to see that spending increase. It sees defence commitment as a key aspect of being successful in the foreign policy it wants to run, which is a more explicit pivot towards New Zealand’s more traditional security partners. They fear that New Zealand won’t get a look in if it does not address the perception that the country is freeloading.
The fear is that Australia (and the Americans) will simply look at the share of GDP spent on defence, and use that as the basis on which to determine whether New Zealand is worth bothering with.
In that context, there are interesting questions to be asked over the decision of National to break a commitment in its own election manifesto, and subject the Defence Force and the Ministry of Defence to its cost-cutting exercise, where each agency is asked to look for cuts of 6.5 or 7.5 per cent.
The Defence Force has been asked to look for 6.5 per cent cuts. These are unlikely to be seen fondly in Canberra, unless overall spending continues to track upwards.
Prime Minister Christopher Luxon has spoken about lifting Defence Spending to the Nato benchmark of 2 per cent of GDP, but that looks some way off.
Vote Defence Force was about $5b in the 2023 Budget, if you subtract the $120m spent on veterans. That equates to about 1.3 per cent of GDP.
We’ll only know at the May Budget how the tussle between Collins, Peters, and the rest of the Coalition over defence spending has gone. Now is not a good time to be making budget bids, particularly ones that have so little domestic political payoff.
The statement released by the four ministers on Thursday showed how closely the new Government is prepared to pivot.
The statement namechecked the “enduring nature of the Anzus Treaty, which continues to underpin the strategic relationship between the two countries, 72 years after it was signed, and formalises the commitments we have to each other as allies”.
There’s some debate over the significance of this wording. A 2018 joint statement by the then-Defence Minister Ron Mark, and then-Australian Defence Minister Marise Payne namechecked Anzus, but it was missing in some statements from successors in the role, Peeni Henare and Andrew Little.
In 2016, then-Prime Minister John Key expressed some scepticism about the Anzus descriptor which was included in an Australian defence white paper.
He said it Australia and New Zealand had “more an Anzac relationship in so much as Australia and New Zealand work together on some of these issues”.
“They [Australia] have a very different defence profile and capability obviously to New Zealand but they are well and truly aware that a long time ago we suspended Anzus and we have no intention of re-joining,” Key said.
Thursday’s statement also said the ministers discussed and agreed the Aukus pact “made a positive contribution toward maintaining peace, security and prosperity in the Indo-Pacific”.
This is quite a significant win for the Australians, given China, and some Pacific leaders have cautioned the pact risks elevating tensions in the region. New Zealand academics have talked up the risk that New Zealand closely associating itself with Aukus alienating Pacific nations, which tend to appreciate the fact that New Zealand has taken a different approach to Australia in respect of its militarisation.
Otago University Professor Robert Patman told the Herald this week that other countries in the Indo-Pacific noticed that New Zealand was “not in lockstep with countries like the US and Australia”.
“That we reserve the right to make independent decisions gives us considerable kudos in Asia. A number of countries in ASEAN, and the Pacific Island states make a big distinction between Australia and New Zealand. Do we want to erode that advantage?” Patman said.
Peters is fortunate that he is well-liked and respected in the Pacific, which could mitigate these concerns, but he will not always be foreign minister, and future foreign ministers will have to balance New Zealand’s desire to more closely embrace its Pacific identity and project influence in the Pacific, with the Pacific’s squeamishness about Aukus-led militarisation.
We’ll get a good sense of just how much the Government is willing to back that Aukus talk in terms of dollars and cents in May. With the new Government eyeing a series of meetings with Pacific leaders in the coming months, we’ll also be able to see how the pivot has gone down with our neighbours.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.