Kiwi sailors are jumping ship and joining the Australian navy for higher pay, Labour says.
Defence spokesman Iain Lees-Galloway says the loss of skilled personnel is forcing the New Zealand navy to rely on serving members of the Australian navy to crew its ships.
The New Zealand Herald reports 18 Australian sailors are on New Zealand vessels in addition to personnel involved in regular exchanges.
Defence Minister Jonathan Coleman says it's no secret the navy has lost staff.
"We've got fewer people in the navy and we're short of some crucial trades, so that Australian assistance is really helping us out," he said.
Mr Lees-Galloway says Dr Coleman should be ashamed.
"Because of National's mishandling of the defence portfolio we now have to rely on Australia to help us carry out the most basic of military functions," he said on Friday.
A defence force restructuring exercise last year went badly wrong after the government told it to save $400 million a year.
The staff attrition rate across the defence force was 21 per cent during 2012 and the Herald report says it is understood to be even higher in the navy.