The Prime Minister has confirmed the New Zealand Defence Force (NZDF) will have an increased Budget despite the Government being focused on departments cutting costs.
It comes as demands and requests increase for the NZDF with troops in the Middle East and the Pacific as well as our commitments to train Ukrainian troops.
But this has raised questions about whether the NZDF will still have a 7.5 percent savings target imposed on them by the coalition Government.
A big promise the coalition Government made when it was elected into power was to reduce costs across Government departments.
In December, 39 Government departments or agency chief executives were asked to suggest annual savings of either 6.5 or 7.5 percent.
Luxon said the cuts are a response to the previous Government increasing government spending by 84 percent as well as "dumb, stupid, inefficient activity" happening.
But for the NZDF, along with health, education and some other portfolios, Luxon told AM the Government acknowledges they're under "significant cost pressures".
Luxon confirmed on AM the NZDF budget would increase when the next Budget is released in a few months, but they would still need to find some savings.
"We still want them to have that culture in that mindset to say, let's make things as efficient as possible," Luxon told AM.
"Any money that they save will be recycled into those frontline services and also those portfolios have been invited to make some budget bids. As we go into the budget process in May, we would expect that some of those portfolios will have obviously increases in their total budgets as well."
Luxon said health and education would likely see an increase to their budget when the Government announces its Budget later this year, but he still expects them to be efficient and generate savings that are recycled back within their existing budgets.
AM co-host Melissa Chan-Green asked the Prime Minister if that meant agencies like the NZDF, education and health are exempt from reaching the 7.5 percent savings target.
"What we're looking at is a target overall across the whole of government, there'll be some Government agencies that will generate a lot more than 7.5 percent, there will be some that might struggle to get there," he replied.
"But what we're asking of all those CE's [chief executives], is to go through all of their individual budgets, line item by line item, stop the dumb stuff, stop the stuff that's not working. Make sure that everything is efficient as it possibly can be... and in the case of Defence, that savings will be regenerated and recycled back into the frontline services."
Watch the full interview above.
