New Zealand lacks billions ‘under the couch’ for greater defence spending: Finance Minister
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New Zealand’s Finance Minister Nicola Willis at the press conference on the federal budget in Wellington, on May 28.
PHOTO: REUTERS
WELLINGTON - New Zealand does not have the fiscal headroom to increase defence spending to the levels the United States might expect, Finance Minister Nicola Willis said.
US Defence Secretary Pete Hegseth told delegates at the Shangri-La Dialogue in Singapore on May 30 that New Zealand’s target of raising defence spending to 2 per cent of the economy is not enough and was an example of “freeloading”.
He hinted that nations should aspire to a target as high as 3.5 per cent.
“That would be extremely challenging,” Willis told TVNZ’s Q+A programme in Wellington on May 31. “We don’t have billions of dollars sitting under the couch.”
New Zealand recently unveiled a plan aimed at increasing its defence spending to the 2 per cent level from around 1 per cent, citing rising geopolitical tensions such as Chinese warships conducting live-fire drills in the Tasman Sea in 2025.
She included extra defence funding in her budget delivered on May 28 as part of that plan, but also continues to project large budget deficits as the nation’s weak economy curbs government revenue.
“We’re investing significantly in defence so that we can advance and protect New Zealand’s interests,” she said.
“We are doing that because it’s in our national interest, not because the US has asked us to.
“What we have committed as a government to do is to review our defence capability plans every two years in light of international developments and our situation here at home. We will do that in good faith.” BLOOMBERG
