Government papers say there will be no extra funding over the next 10 years for projects outlined in last year's Defence White Paper due to the tough economic climate.
Defence Minister Wayne Mapp says New Zealand's fiscal position has deteriorated since the White Paper was published in November last year and the plan must be affordable.
Dr Mapp says projects can be funded over the next 10 years from accumulated depreciation with no need for capital injection. The White Paper says Defence aims to save up to $400 million by the 2014/15 financial year.
On Monday, a capability plan was released in response to the White Paper which assesses what projects can and can not be done and details how the Defence Force plans to maintain or replace its equipment in the future.
Under a $3 billion capability plan announced on Monday the Army will be re-shaped into a Joint Amphibious Task Force, which will include the Navy and Air Force and allow more personnel to be deployed in combat for longer.
Other spending for the coming decade includes a new SAS battle training facility, new advanced trainer aircraft, and the upgrading or replacement of ageing Seasprite helicopters.
An increase in frontline personnel is expected.
Former army chief Lou Gardiner says the spending plan does nothing to ease the pressure on the Defence Force's coffers.
Major-General Gardiner says none of the funding is new money and will all come out of depreciation costs with no requirement for capital injection.
That will keep the heat on Defence to make sure these capabilities can be funded, he says.