New Zealand lacks funds for higher defense spending, says Finance Minister

New Zealand Finance Minister Nicola Willis has stated that the country does not possess the financial capacity to meet potential U.S. expectations for increased defense spending. This comes after U.S. Defense Secretary Pete Hegseth criticized New Zealand's goal of raising defense expenditure to 2% of its GDP as insufficient and an example of "freeloading."

Willis responded to Hegseth's remarks, suggesting that aspiring to a defense spending target as high as 3.5% would be "extremely challenging" for New Zealand. "We don’t have billions of dollars sitting under the couch," she told TVNZ's Q+A programme, emphasizing the fiscal limitations.

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That would be extremely challenging. We don’t have billions of dollars sitting under the couch.

New Zealand recently outlined a plan to increase its defense spending from approximately 1% to 2% of GDP, a move driven by rising geopolitical tensions, including Chinese warships conducting drills in the Tasman Sea last year. While Willis included additional defense funding in the recent budget, the nation continues to project significant budget deficits due to a weak economy impacting government revenue.

"We’re investing significantly in defence so that we can advance and protect New Zealand’s interests," Willis asserted. "We are doing that because it’s in our national interest, not because the US has asked us to." She affirmed the government's commitment to reviewing defense capability plans every two years in response to international developments and domestic security needs.

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We’re investing significantly in defence so that we can advance and protect New Zealand’s interests. We are doing that because it’s in our national interest, not because the US has asked us to.