New Zealand is barely a military power. It has had no combat aircraft for 25 years, and its ageing frigates need replacing. Lifting defence spending to 2 per cent of GDP passes for ambition. The country comes across as a real-world Hobbiton: peaceful, friendly and not very capable.

Yet one capability puts New Zealand in the club of superpowers, and it is the last one anyone would expect. Last year, only the United States and China saw more rockets leave their soil. New Zealand, with 17 launches, matched Russia.

The remarkable part is not the rise of the industry but how little successive governments have learned from it, and what that means for the military questions now arriving.

New Zealand’s space story began with an entrepreneur rather than a ministry. Peter Beck, a self-taught engineer from Invercargill, never went to university. He trained as a toolmaker at appliance manufacturer Fisher & Paykel.

Beck founded Rocket Lab with Silicon Valley money and, for a launch site, chose the Mahia Peninsula, sheep country on the North Island’s east coast, where skies were empty and the path to orbit clear.

The state then followed him. It signed an agreement with Washington so American parts could fly, passed a launch law inside a year and gave research grants once private capital was committed.

The sequence mattered: first the rockets, then the law, and public money last.

The government’s useful role was to set rules and enforce them. On those terms, it performed well, raising the number of launches allowed annually from 100 to 1,000 and cutting approval times for what rockets carry from eleven weeks to five and a half.

But there was a catch: the company behind this result is now Rocket Lab USA Inc of Long Beach, California.

Beck, still a New Zealand citizen, is worth an estimated NZ$11 billion, at least according to this year’s rich list. But the launches that put New Zealand on the space map count, in most international tallies, as American.

In 2021 the Ardern government tried to copy the trick itself, creating Tāwhaki, a joint venture with two local Māori authorities, to build a national aerospace centre at Kaitorete Spit near Christchurch.

This time the government did things backwards. It chose the site, put in over $35 million, and loaded the project with three jobs at once: an aerospace hub, environmental restoration, and a working Treaty of Waitangi partnership. Each was worthy on its own but together they guaranteed nobody could say what success looked like.

The launch announcement promised the project would ‘lift off’, yielding up to $300 million a year within a decade. The aviation regulator had learned of it two days before the press release. When officials advised that the runway grant did not meet the fund’s rules, Cabinet approved it anyway.

What the state did not supply was a paying customer.

So not much happened. Tāwhaki underspent its modest budget, attracted no big international investor and was told by ministers to shift from rockets to drones.

Then the world changed. Ukraine showed that satellites now win battles, while Russia and China have shown they can destroy them. The Pentagon wants launch pads in many places to replace destroyed satellites. It calls extra launch options ‘a war-winning architecture’.

European rocket companies, short of sites on their crowded continent, are hunting for the same thing.

That search led several of them to Kaitorete, where the venture has not been idle: its runway opened in 2024, drones and a rocket-powered spaceplane test there, and it holds the country’s first permanent special-use airspace. Those are real achievements. Measured against the $300 million promise, they are also the record of a testing paddock, not a spaceport.

Eighteen months after the drone order, it is back talking about rockets.

And just as the queue forms, the money stops. The state funded Kaitorete when nobody wanted it and, now that somebody does, says the cupboard is bare.

Something strange is happening at the spit, though. In the government’s absence, Tāwhaki has quietly begun drafting its own foreign-policy rules on whose military payloads may fly from its site: yes to the New Zealand Defence Force, caution toward the Pentagon.

Its tests speak of values and rangatiratanga, the self-determination of its Māori shareholders. Members of one shareholder rūnanga now want defence work banned entirely. Paul Goldsmith, the third Space Minister in as many years, asked who may launch, says that “is a commercial decision for Tāwhaki”.

Now, hedging against an unpredictable Washington may be sensible. But leaving the hedge to a landowner is not. Allies and partners may well wonder what is going on in New Zealand’s defence policy.

There is a moral in this saga, and it reveals much about New Zealand’s security posture. When it comes to defence, spending as a percentage of GDP is important, no doubt about that. But equally important is a clear government position regarding its reliability as a partner.

Governments grow industries by being reliable customers, not by founding companies and then changing the brief with every new minister. Rocket Lab worked because NASA, the Pentagon and commercial buyers paid for results; Tāwhaki stalled because its principal owner, the Crown, kept altering the mission.

There is an industrial policy lesson in all of this, too. Because this was a relatively neat experiment regarding the role of government: the same state dealt with the same industry twice within a decade. As referee, it helped make New Zealand the world’s third-busiest launch nation.

When it tried to act as entrepreneur, it built a spaceport that still has no launch pad.

Few countries ever get the chance to lead a strategic industry. New Zealand had one, gifted by geography and a stubborn engineer in Peter Beck, just as global demand arrived.

The government has snatched defeat from the jaws of victory. Instead of a second Rocket Lab, it built a national aerospace centre that remains an underutilised startup after five years. Meanwhile, questions of national security have drifted, unexamined, from the Cabinet table to a company set up to restore a beach.

New Zealand can be a world-leading space nation or a slightly larger Hobbiton. It has yet to choose which.

To read this article on the Australian website, click here.