The Defence Force has been warned it’s risking public confidence after staff accepted nearly half a million in gifts and hospitality from suppliers, including concert tickets and being hosted on America’s Cup yachts.
An inquiry by Auditor-General John Ryan found the NZDF accepted over 2500 offers of gifts and hospitality between 2016 and 2025, valued at more than $418,000.
He warned the practice risked “the public and Parliament losing confidence in the decisions made to contract with those suppliers” in a letter to the Defence Force chief.
“In my view, NZDF has not paid sufficient attention to the risks that gifts and hospitality from commercial suppliers create,” he wrote.
“NZDF needs to carefully consider the inherent risks associated with continuing to accept any offer of gift or hospitality from a commercial supplier.”
Examples of gifts and hospitality included tickets to concerts, international rugby, cricket and rugby league matches, fishing charters and conference tickets. Personnel were also hosted on yachts during the America’s Cup in 2021 and at the World of Wearable Arts.
Other examples included smartwatches, food and drink at functions, including coffees, breakfasts, lunches and dinners, along with alcohol.
The Auditor-General said the pattern of accepting gifts was “inconsistent with good practice in public organisations”. Ryan’s office became aware that Defence Force staff had been accepting gifts and hospitality from a “commercial supplier” last year.
He said that decisions on public spending through supplier contracts “must be, and be seen to be, made for the right reasons and not influenced inappropriately”.
NZDF has since 2023 introduced new policies and improvements that have reduced gift acceptances, which the Auditor-General acknowledged. But Ryan said the organisation continued to accept gifts and hospitality from suppliers despite the changes.
Since the new policy, the organisation has accepted 390 gifts worth $40,272, including tickets and corporate hospitality at Super Rugby games and international matches.
Ryan questioned policies allowing gifts that “contribute to NZDF outcomes and help build business relationships”, saying it was difficult to reconcile with requirements that staff avoid situations where actions appear influenced by private interests.
The inquiry also found some staff making individual judgments about gift acceptance, and others unaware that the policy had been updated in 2023.
One example involved sporting tickets being accepted on the basis that there would be no work chat, which Ryan said showed “at best a misunderstanding of the policy”.
Staff were reminded in February and March this year of the importance of following the policy and that “personnel should decline offers unless there is a valid business purpose”.
It noted that “tickets to sporting events or dinners with commercial suppliers were unlikely to meet that expectation”, according to the Auditor-General.
‘No evidence’ of ‘inappropriate influence’ – NZDF
A spokesperson for the NZDF told 1News the organisation welcomed the inquiry.
“The Defence Force will continue to ensure standards are maintained and improvements are made where required. No evidence was found of inappropriate influence of NZDF officials or decisions in relation to commercial contracts,” they said.
“Many of the concerns raised by the Office of the Auditor-General are historical in nature and have been addressed by improvements, many of which have been proactively implemented by the NZDF and prior to the inquiry commencing in late 2024.”
However, the NZDF accepted it “needs to continue work to ensure expectations are maintained”.
“Since the inquiry, the NZDF has undertaken further work to improve organisational awareness of its policies to ensure high standards are consistently and universally upheld.
“The NZDF’s policy on accepting gifts and hospitality reflects that the organisation must maintain constructive working relationships with commercial suppliers in the defence industry, particularly in the context of future procurement and the need to rapidly advance defence capabilities.
“Improvements the NZDF has made include introducing new policy on gifts and hospitality in November 2023, establishing an enhanced gifts register, forming an integrity and coordination team, and communicating the chief of Defence Force’s expectations.”
They noted the Defence Force reports annually to Parliament’s foreign affairs, defence and trade select committee with a list of gifts and hospitality.
