Until recently, Australia's independent-minded neighbor across the Tasman Sea chose to ignore grumblings from Canberra that it wasn't pulling its weight in defense spending.
But earlier this month, New Zealand started listening, announcing plans to boost its defense spending by $3.2 billion over the next 10 years to modernize equipment and add hundreds more ground troops.
In addition to frustrating Australia, New Zealand's antinuclear, pacifist stance has troubled its own generals and affected the morale of the armed forces in recent years. As the government moves to respond to these concerns with new money, it is also shifting strategy by concentrating on peacekeeping skills that it has developed in East Timor, Afghanistan, and the Solomon Islands.
"With the realization that the end of the cold war has only opened a Pandora's box and created more trouble spots, it's time, they feel, to contribute in the best way possible," says Peter Cozens, executive director of the Center for Strategic Studies at Victoria University in Wellington, New Zealand.
Almost two decades ago, New Zealand was thrown out of ANZUS, the trilateral security alliance with Australia and the United States, for refusing to allow US nuclear-powered or equipped ships to dock in its waters. It canceled a deal to buy 28 F-16 fighter jets in 2000, cut its modern warships to two, and slashed the air force. It currently spends $850 million a year on defense - less than 1 percent of its gross GDP.
The goal now is to reverse that trend, while still streamlining the military. When the budget was announced in early May, defense minister Mark Burton told the Australian Broadcasting Corporation that New Zealand would move away from trying to do a little bit of everything in favor of making "realistic contributions."
By redefining its "defense identity," New Zealand could well repair its relationship with the US, which was damaged in the 1980s, experts say.
"New Zealand now does not need the latest American equipment, but it offers troops in certain situations, and that opens up the possibility of rebuilding something that was lost," says Hugh White, professor of strategic studies at the Australian National University in Canberra.
The move is also likely to strengthen ties with Australia, on which New Zealand has long depended for security.
Australia spends about $12 billion on defense. It has the advantage of signalling and communications equipment from the United States, as well as fully equipped armed forces.
New Zealand, which lacks the ability to defend itself from a maritime threat, has long assumed that any attack would meet an Australian response.
"Australia has already taken a decision to be on the ready in case of attack, especially after 9/11, and any attack that was in the vicinity of New Zealand would be close enough to be [responded to under] its plans of self-defense," says Aldo Borgu, director of programs at Australian Strategic Policy Institute in Canberra.
But Australia is said to view the new attention to defense spending positively, particularly as New Zealand could complement some Australian efforts.
Mr. White says that a contribution to infantry is exactly what Australia needs in its overseas deployments.
"Australia has only six battalions and that should in any case be increased to eight or nine, but if New Zealand helps to ease that pressure wherever possible, it's welcome," says White.