A staff survey shows morale in the Defence Force is the lowest it has been in the last nine years, and staff intentions to leave are at a concerning level.
Defence leaders also say Australian mining companies are targetting personnel as recruits for their own workforces.
At a select committee in Parliament today, Defence Minister Jonathan Coleman tabled the force's latest quarterly attitude survey.
Dr Coleman says the defence force is going through a very ambitious change management programme, the first of its kind in the organisation.
He says the organisation is on track to make its targetted savings of between $350 million and $400 million by 2014-2015.
Dr Coleman says the organisation is meeting its operational obligations despite a high attrition rate and low morale.
Defence staff in the survey indicated morale is the lowest it has been in the last nine years and staff intent to leave is at a worrying level.
Dr Coleman told the Parliamentary select committee that Chief of Defence Force, Lieutenant General Rhys Jones, had the matter it in hand.
But Tormer Labour Defence Minister, Phil Goff, says he can't remember a time when morale has been so low.
He says in January and February this year attrition was at 30 percent in the Navy, which resulted in the service having 120 fewer days carrying out its tasks at sea.
And Labour's defence spokesperson, Iain Lees-Galloway, says a four-year wage freeze in the defence force is a driver behind the organisation's low morale.
Mr Lees-Galloway says the Government has mismanaged the change plan to make savings.