Defence Force Chief Jerry Mateparae has told MPs the force can make savings of between $50 million and $100 million a year.
Lieutenant General Mateparae told the Parliament's defence and foreign affairs committee that costs can be cut in procurement, IT, real estate and internal operations at Defence Force headquarters.
He also told the committee that 20% of staff have been deployed overseas this year compared to 14% last year.
Lieutenant General Mateparae said a change of tactic by US forces in Afghanistan reflects the approach taken by the Provincial Reconstruction Teams.
New Zealand SAS troops are in Afghanistan.