New report reveals deepening pay and retention crisis in the NZDF

A nationwide remuneration survey has revealed New Zealand Defence Force personnel are facing a pay crisis, with widespread financial hardship, collapsing morale, burnout and stress, and a pay model that is doing a diservice those who serve our country.

The Mission Homefront survey, completed in March 2025 by more than 300 current and former NZDF personnel across all ranks, trades, and branches, reveals that the current pay system does not respect or reflect the realities of military life. 

91% say their base salary does not fairly reflect their work, responsibility, or the commitment required of their roles, while 92% say the Military Factor does not compensate for the unique burdens of serving Aotearoa. 

Mission Homefront Co-Founder Erin Speedy says the results show our sailors, soldiers and aviators are under an unsustainable strain, with more than half of survey respondents reporting financial hardship, and 16% regularly struggling to afford basic needs.

“People are living paycheque to paycheque, skipping meals, unable to afford both necessities and extras for their children and families, withdrawing KiwiSaver under hardship provisions, delaying having children and relying on friends and family to get by. That’s not ‘fair remuneration’, when the people holding the NZDF up, are barely keeping their heads above water.”

What also painted a worrying picture, she says, was the indication that 74% of respondents had considered leaving due to poor remuneration, meanwhile 63% were actively planning their exit within the next five years. 

“The NZDF is losing its skilled tradespeople, specialists, and senior leaders who are the backbone of capability. If the Government wants a combat-ready, future-focused force, it needs to start with fair pay and fair treatment of it’s personnel, for who it has taken advantage of for far too long.”

85% say civilian counterparts earn significantly more, often $20,000 to more than $40,000 above Defence pay.

The Government’s own benchmarking data which states pay is within 5% of the market, is also skewed under the total remuneration model - which incorporates it’s own Kiwisaver contributions and the Military Factor payment into benchmarking. 

“For the Government to include its own Kiwisaver contributions and the payment that is meant to compensate for the loss of rights, risk, injury and danger, and the compulsion to serve where and when the NZDF requires, is morally corrupt,” Speedy says.  

“Many personnel believe the $18,000 Military Factor is only being used to bump up inadequate base salaries to bring them closer to the civilian market, and is completely failing to provide any meaningful redress for the complexities of service life as it’s intended to do,” Speedy says.  

“These are some of the hardest working members of our society, who serve Aotearoa with commitment, passion and purpose, who are put in harm’s way without complaint, and who’s pay and conditions of service have completely been eroded by successive Governments.” 

Speedy says when you dive deeper into the numbers, a person’s 10 to 15 years of service to the country as a Sergeant is only worth just over $70,000 as an average base salary. 

The pay structure also significantly harms families and individuals, with 17% reporting allowances and reimbursements have negatively affected their tax obligations, entitlements and have resulted in unsustainable and sometimes crippling debt with IRD. 

Mission Homefront is calling for urgent structural reform and the creation of an independent annual pay-benchmarking and review body to ensure Defence pay is reviewed independently of the Government of the day, to ensure fair compensation.

“NZDF personnel are forbidden to join unions, they cannot organise, bargain, or negotiate. Without independent oversight, our personnel are taken advantage of at the mercy of the Government of the day’s “budget constraints”.’ 

Unlike Australia, Canada or the United States, New Zealand continues to tax operational, deployment and service allowances which penalises people for their service.  

Speedy says the Government’s focus on new infrastructure and equipment must be matched with investment in the people who operate them.

“You can’t fix capability with hardware. If pay and service conditions don’t improve, the NZDF won’t have the workforce to deliver on any Defence Capability Plan, now or in the future.”

“Stronger foundations, stronger forces,” Speedy says. “If we want a Defence Force that can protect Aotearoa, we have to protect the people who serve.”

See the full report here: www.missionhomefront.co.nz/our-research 

ENDS

Key findings include:

• 91% say their base salary does not reflect their work, responsibility, or the commitment required.
  
  

• 92% say the Military Factor—currently $18,024—does not compensate for the unique burdens of service.
  
  

• 85% say civilian counterparts earn significantly more, often $20,000–$40,000+ above Defence pay.
  
  

• 74% have considered leaving due to poor remuneration.
  
  

• 63% are planning to leave within the next five years.
  
  

• More than half report financial hardship, with 16% regularly struggling to afford basic needs.
  
  

• 26.5% did not know their employer KiwiSaver contribution is taken out of their total remuneration.
  
  

• 17% say allowances and reimbursements have negatively affected their tax obligations or Working for Families entitlements.
  

View the full report here: www.missionhomefront.co.nz/our-research