And wouldn't their sea defense be better served with SSKs rather than fighters?I agree with some above. The Muldoon victory example is potentially quite interesting, though I profess to be no expert on NZ politics (I know a bit more about the endless Telenovela that is the Australian compulsion to the leadership spill, but that is another matter).
New Zealand is isolated and quite challenging to get to in relative terms. Their principal interest protecting their EEZ, given they are not really set-up for prolonged land deployments abroad. Below is a map of the Pacific nation's Exclusive Economic Zones:
View attachment 527507
A larger version is found here.
As you can see, the mint green coloured area is NZ and is, obviously nearby Australia and possessions held by the US. Presumably the assumption was that they would be protected by both territories, and perhaps, in the case of a major regional war, as unlikely as that might seem, Malaysia and Indonesia in support? The question here is, where is the threat? I suppose you could say the Cook Islands, Tokelau and Niue are vulnerable to capture in a Pacific War, say a showdown between the United States and the PR China. Would you spend the money to operate an Expeditionary Air Wing from the Cook Islands with a fighter squadron, maritime recon, refuelling and transport capabilities to cover that area? If so what is their mission, air defence and air interdiction in Melanesia? Presumably anti-illegal migrant patrols as well, which is more politically delicate. And if they were to go there, what sort of fighters are we talking about? One General Dynamics F-16 Fighting Falcon cost between $14 and $18 million dollars per unit. Add in considerable training and support costs and you have an expensive outlay, presumably for three squadrons, one for home defence, one for Pacific island deployment and one on-standby to be sent abroad, for example from the 1990s, the New Zealand contribution to the liberation of Kuwait from Iraq in the Persian Gulf, enforcing no-fly zones over Bosnia and Herzegovina, Kosovo, Iraq, Libya and the Iraq and Afghanistan wars. Choosing say a mixed air defence, air attack option built around a and using BAE Hawks as flying artillery pieces still costs something like $18m per unit.
The question is why? They are not near any naval chokepoints or areas of high strategic significance really. Yes, these are prestige items that says something about the country who operates them and yes, would certainly make life easier if the Chinese continue to grow in power. However, they chose to cut those assets because they didn't think they were going to need them. They may be wrong in the future, but not for the moment.
Ultimately, the politics probably has to change. The aforementioned Muldoon example is a good one. If we were to assume that somehow the Philippines and/or Indonesia remained repressive states, for example if the Aquinos were unsuccessful dispatching Ferdinand and Imelda Marcos, this would mean that the neighbourhood NZ found herself in was less safe or if the PR China had taken very decisive action against Taiwan and/or Hong Kong and Macau would likely ensure that NZ retained and developed her fighter capability. Indeed, anything that involves NZ feeling threatened and at all less than supported by Australia probably means that NZ retains and develops her fighter capability and developing her Maritime recon, aerial refuelling and Naval assets alongside. In that sense NZ chose not to do this, because they didn't feel they needed to do that, much as Ireland feels reasonably safe and secure next-door to the UK and not far from France, the Netherlands and Germany who all have submarines and well developed fighter capabilities and can act swiftly within the NATO framework to defend a non-NATO, EU partner. FYI, the Irish had fighters in the past, they operated Hawker Hurricanes until round about the end of the Second World War, Supermarine Seafires until 1955 and de Havilland Vampires in the Cold War. Presently, they do not operate any kind of fighter, instead relying on a training craft, the Pilatus PC-9 and collaboration with the British for air defence. Change the calculus and they step-up their capabilities.