It does for NZ. they factor pretty deeply into what we do and plan for.
I have a fair idea of what you are referring to, but at the same time I have trouble with the generalisations being implied (here and subsequently by later posters). When people knock NZ, I suppose they are really knocking those that control the purse strings and generally interfere with Defence (and other Govt Department's etc). In other words the b%$#%y Politicians! Especially as 99% of them haven't ever served in the military (apart from it seems the current DefMin and one of the Associate DefMin's, by chance).
So I take it that the main gripe is that NZ politicans play down NZ's need for expensive hardware (and don't tend to deploy them as much as they could etc)? Hence leave the hard choices for the likes of Australia to shoulder (eg tens of billions of dollars spent on massive air, sea and land capabilities) versus a couple-to-few billion that NZ spends etc.
If so the NZ politicans tend to play a very simple card game. It goes like this. "Who on earth is ever going to invade NZ? Go on tell us!!!" Alas the mindless media lap it up, the people buy into the frenzy and before you know it, those with defence credibility (eg like the former senior defence and diplomatic officials that tried to fight the Govt's axing of firstly ANZUS and later the air combat force) are dismissed as "geriatric generals". The media then report the bun fight with glee (for the media it's like reporting on a cat fight, it's too much fun to watch rather than have the facts get in the way), the poor old "generals' (with nil experience of waging a public information campaign) are then embarassed into silence by a dismissive and cyncial media and the people simply accept what they are told by the Govt. So the "generals" need to get with the programme and employ a public relations type company to counter attack IMO. After all that what lobbying is about (and is milked to the bone by the peaceniks)!
The other failure is that of linking NZ's economic wellbeing with stability in far away places, in our case, I'm thinking of Asia in its broadest sense (from SE Asia to the Gulf and up to Northern Pacific), let alone further afield such Europe, Africa and the Americas etc. Politicians very well know this but tend not to talk about it. People don't seem to see the connection (but that is starting to change as NZ engages economically more with the Asian giants etc).
The other failure is the agreement that the Australian and NZ Govt's have to not crticise each other. Thus in Howard's expansion years, Aussie politicians couldn't publically criticise NZ downgrading its defence. In NZ we had one or two muted expressions of criticism from a former Aussie ambassador but that would have been over the head of 99.99% of the population (who wouldn't have bothered to read his comments anyway). However in most respects this agreement is actually a good thing, because otherwise the politians here (as they would do anywhere) would have pressed the patriot button and accuse others of interferring in NZ's affairs, which would have fueled a bigger media frenzy and get even more everyday (non-thinking) NZ'ers on side etc.
The solution in my opinion is simple.
Australia needs to tell NZ what would happen if Austrlia couldn't defend itself properly (due to damage suffered) and thus how that would affect NZ.
For example if Australia said that an attack (for this purposes it doen't matter HOW eg be that NBC or terrorism or cruise missile etc) destroyed or severly affected Fleet Base West, then those elements in FBE would probably head westwards to defend Australia's Western flank. Similary the RNZN Frigates, if undamaged themselves, would head westwards too thus leaving NZ exposed.
Similarly if the major Eastern seaboard airfeilds were out of action (damaged runways or destroyed aircraft - let's say by local infitrators as a precursor to something bigger about to happen) then not only would some elements of the RAAF be crippled, but those that were remaining would be pressed to shore up against the main invasion force sweeping down from the north or west etc.
I'm not saying I am articulating myself well here, as others here could, but with a little bit of imagination and some slick information, the message would get through to the people of NZ. Politicans then tend to react when the people get worried.
Similarly there could be a number of win-wins. Greater investment in NZ defence infrastructure would be better accepted by the public knowing that in the event of an emergency, other countries elements may end up here (as the US did in WW2), perhaps as a re-grouping strategy let alone for local area defence purposes.
We're now in the "me" era/generation. And in NZ those baby boomers who sh@t upon their forebearers whom built up NZ defence during and after WW2 are now finding themelves in the odd position of reaching retirement age, with many assets and investments to preserve, as if they are still young things wishing to explore the world (and now with added grandkids etc), who ironically would like to see their way of life preserved still (something they didn't think about when they were the younger protesting generation etc). They (and we all) crave economic stability, thus with economic stability comes responsibility to ensure defence diplomacy plays its part. There's a generational shift happenning, and the younger generations are more interested in these matters (or at least don't have a closed mind. Not in all cases, but much more so than over the last 30-40 years).