Defence Minister Jonathan Coleman says people left the Defence Force because of a "number of factors", including moving to Australia.
His comments came after a critical report by Auditor-General Lyn Provost slated the handling of Defence Force redundancies and said the effect on morale sparked an exodus of staff, affecting defence capabilities.
Provost criticised the force on several fronts, including that it overstated the savings expected from its planned 1400 redundancies.
She was also critical of the speed and manner in which those redundancies were carried out in 2010 and 2011.
Defence boss Lieutenant-General Rhys Jones said yesterday he had big regrets about the way staff were told of the job losses.
And he admitted the Defence Force was now considering downsizing its naval fleet.
But Coleman said the Auditor-General's findings were "old news" and the Defence Force had largely moved on.
"The fact is there had to be some change in the NZDF over time," he said.
"Those changes could have been implemented better than they have.
"I wouldn't say isolate it and say that it's because of civilianisation [employing civilians to do work that does not require military personnel].
"A lot of these guys have very good skills, there's a very good market in Australia for those skills, people have said 'well look it's time to cash in those opportunities and move on'."
The Defence Force had met their savings targets and the process had not been a failure, he said.
"You've got a fixed baseline there," Coleman said.
"They're getting new equipment. How are they going to run that without new cash?"
Cabinet approved civilianisation plans at the time.
Labour MP Phil Goff said civilianisation meant brand new navy ships were tied up at the wharf because there were no crews to sail them.
The Government had "gutted" the Defence Force, he said.
"I don't think it is a reasonable request to say that Defence Force find savings of $400 million a year without affecting the capacity and the morale of their service personnel," he said.
Goff said morale was at an all-time low and high attrition rates were undermining the Defence Force's ability to carry out its role.
- The Dominion Post
Should MPs be able to swear to uphold the principles of the Treaty?Related story: Oath wording strikes MP discord