The big problem with New Zealand is its government has zero commercial nouse. It would rather plough $3 billion a year in taxpayers funds into doing something inefficiently and badly because that is the way it's always been done than think about creating new opportunities for New Zealand to employ its people and develop its fiscal base. That's taking money that taxpayers could use to build with and put it into things that deliver less value to the country as a whole.
Defence funding at present is mostly a dead weight loss to the economy. Some of the coastguard activities of the Air Force and Navy have economic value but they do not need defence capability. People who could be developing firms, exporting, and improving our standard of living are working very hard on defence activities which cost far more than their civilian counterparts could supply them for. There is no need for ASW aircraft to provide SAR capabilities. That's like requiring someone to have Ph.D in maths to do book-keeping. Our military helicopters are outrageously expensive compared to civilian helicopters with roughly the same capability. All of this is to effectively take taxpayer value and bury it in the ground.
Defence doesn't have to be a drag on our nation's economy. It could be a huge contributor to it, but to get there it would have to think completely differently. Less like an old British duffer and more like a Singaporese.