NZDF remuneration package risks worsening retention

Mission Homefront is extremely concerned about the impact 2026 remuneration package will have on morale and retention, as personnel tell us they are ready to walk out the door. 

The overwhelming feedback from sailors, soldiers, aviators and their families is that this package feels like a kick in the teeth and is incredibly insulting. People are telling us they feel undervalued, underpaid and deflated. Many have described it as the lowest morale they have experienced in years after remaining hopeful poor wages would be adjusted. For many personnel, the pay increase won't even be reflected in their take-home pay.

Many are also frustrated about the lack of transparency around the announcement and the message it sends to increase salaries for senior officers. 

The 2.2% pay increase only applies to base salary. When total remuneration is considered, including the Military Factor, the increase is closer to 1.7%. Meanwhile Kiwisaver has also increased, meaning the actual take home pay increase is around 0.9% for most. 

We also question why the NZDF appears to switch between talking about base salary and total remuneration depending on which figure paints the better picture. The lack of consistency and transparency is further eroding trust.  Meanwhile, many are also frustrated about the decision to send the decision about this poor pay rise, late on a Friday afternoon, rather than front-foot a difficult conversation.

Junior ranks are telling us that they have struggled to understand the decision to provide the largest percentage pay increases to senior officers, despite the 33% market gap. 

Many of the lowest-paid personnel continue to struggle financially, make difficult decisions about paying bills, travelling to see their families or whether or not they can even afford to start one. 

So for them, it is incredibly difficult to see those already earning circa $200K being prioritised and are calling it a slap in the face. We are extremely concerned about the discontent in the forces and the impact this could have. 

The Government and NZDF have given a meagre 1.7% with one hand, and on the other hand also reduced the Operationally Deployable and Employable Additional Payment Rate (OEAPR). The OEAPR is a fixed rate, and is now being spread across more people. 

This hits junior sailors, soldiers and aviators the hardest. Some of those who can least afford it will see much of their pay increase effectively cancelled out. 

It is also extremely concerning that the NZDF has specifically excluded allowances from the REM announcements, when those allowances have been eroded by inflation over many years. 

When inflation, higher KiwiSaver contributions, increased mess charges (estimated at 4.5%), rising travel costs, and the day-to-day cost of living are taken into account, this remuneration package is essentially another pay cut.  

Fuel and related travel is becoming too expensive for personnel who are posted away from their families or loved ones. Allowances do not cover the actual expenses, meaning personnel are consistently paying the costs of their service to this country out of their own pocket. At the end of the day, it is families who miss out, children who don’t get to see their parent and vice versa. 

We regularly hear from families struggling with the financial realities of military life.

Families are struggling to put food on the table, and we are seeing different bases around the country being forced to come up with initiatives to help alleviate that pressure. It is a national disgrace, and it should be a source of national shame, that those who serve and protect our country, cannot afford to pay their bills and feed their families. 

Particularly those who are battling power bills running into the thousands because they are trying to heat damp, cold Defence housing or operate dehumidifiers around the clock. We have spoken with some that are spending over $10,000 a year on power alone. 

Meanwhile, rent increases are also expected to be announced this month, despite the national average rent price falling over the past year. According to Infometrics, average weekly rents declined by 1.2% in the year to March 2026, with median rents down 1.6%.

If the NZDF and Chief of Defence Force continue to use this data to calculate service housing rents, it will be extremely difficult to justify any increase.  

Many families are asking why they should be paying more for homes that are cold, damp and in need of significant investment. At a time when this remuneration package leaves many no better off financially, increasing rents or continuing to charge for barrack accommodation sends the wrong message.

Personnel living in their own homes are also facing rising mortgage costs, insurance and rates.

We are extremely concerned that uniformed personnel are walking away from the NZDF and the impact this will have on an already understaffed, overworked and under pressured work force. 

Many personnel have told us they have handed in their papers, or are now considering their options, particularly in the infantry battalions who received none of the recent critical retention payments. 

Social media commentary tells us that seek.co.nz was the highest visited site on the NZDF servers, when this pay rise was announced. We think it’s a pretty good indication of the lack of morale on the ground. 

We also know that many personnel have already handed in their papers over the last few months and this pay increase they have told us, has solidified their decision. 

Lateral transfers to the Australian Defence Force are also being considered by serving people. We don’t have numbers, but again, what personnel are telling us is that they can get salaries tens of thousands of dollars higher and are already starting this process to join their fellow Kiwi comrades already across the ditch. 

Given the critical understaffing of the NZDF, there is a chance if personnel are putting in their papers to leave, these may not be accepted and personnel would be forced to stay which raises huge mental health concerns.

We also acknowledge the targeted retention payments recently announced for some critically short trades. Those payments will make a real difference to the people receiving them, and those personnel deserve to be recognised after years of carrying extraordinary workloads.

However, retention bonuses are a symptom of the problem, not the solution. They are a response to pay falling so far behind that shortages become critical. They do not address the underlying issue affecting the wider workforce.

The consequences of not looking after our service people will be reduced recruitment and higher attrition and we are incredibly concerned this is exactly what will play out over the next few months. 

Personnel are disappointed, surprised, and angry. They feel unsupported and the sentiment on the ground is that it no longer feels like the Defence force is an organisation for which ‘people are the most important thing’.

Without the right pay and conditions of service, the NZDF is at serious risk of not having enough suitably qualified and experienced people to staff and crew the new equipment and capabilities being purchased in DCP 2025.