NZ's defence spending is doubling, but the US says that's not enough

The New Zealand Defence Force was one of the big winners in this year's budget, but the US Secretary of War says it's still not cutting it, calling NZ 'freeloaders'

When it comes to the New Zealand Defence Force, there's a decades-long list of problems - barracks that aren't fit for purpose, planes that keep breaking down and the big one, a ship lost on a reef in Samoa.

Then last year, the government spotlight fell on our armed forces when they announced the Defence Capability Plan - a blueprint for how our government will double our defence spending to two percent of GDP by 2032/2033.

US Secretary of War Pete Hegseth spoke at the Shangri-La Dialogue summit in Singapore, where he said that allies spending less than 3.5 percent of their GDP on defence aren't spending enough, and said New Zealand is freeloading.

But that isn't enough by US standards.

During a defence summit called the Shangri-La Dialogue in Singapore in late May, US Secretary of War Pete Hegseth announced that 3.5 percent of a country's GDP should become the "new global norm" when it comes to defence spending.

"We demand 3.5 percent from our allies and partners and we are going well beyond that number," Hegseth said. "But for those who believe they can continue to free ride on the generosity of the American taxpayer, hear us now. Those days are over.

"Allies who refuse to step up and carry their own weight for our collective defence will face a clear shift in how we do business."

So, where does that leave New Zealand?

Independent New Zealand journalist Anna Fifield, who is currently a non-resident fellow at the Center for Strategic and International Studies, asked this question to Hegseth, who then labelled New Zealand 'freeloaders'.

"Listen, if I'm being honest, two percent is not enough and so two percent is freeloading, but I don't have anything against New Zealand," Hegseth told her.

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Fifield says that although Hegseth seemed to hold back in his speech, it still wasn't warmly received by all.

"It was pretty moderate by his standards, in terms of the language on China. But it was pretty offensive, frankly by everybody else's [standards], in terms of him standing up there and telling officials from all of these sovereign nations that they need to be spending more - much, much more - on defence if they want to remain a friend of the United States."

But should New Zealand be spending 3.5 percent of our GDP?

David Capie, the director of the Centre for Strategic Studies at Victoria University of Wellington, doesn't think so.

"There were plenty of countries on that list that he spoke fairly warmly of that aren't spending 3.5 percent. So, I don't think New Zealand's going to get to three and a half percent and nor do I think it should. But I think what it needs to do is to say 'hey, what do we need to spend for our own reasons? For our own interests?'"

Despite not spending enough on defence by Hegseth's standards, the government has been increasing the NZDF's budget.

In the most recent budget, the NZDF got a funding boost that lifted its spending to $5.49 billion in 2026/2027 (which is around one point two percent of our GDP).

Then the Air Force: it spent $1.1b in 2024 and is estimated to have spent around a million dollars less in 2025.

The Army spent $1.14b on troops in 2024, and it's estimated that last year they spent $1.16b.

An additional $669 million on top of that went towards other defence capabilities such as policy advice, services to veterans, and the aftermath of the sinking of the HMNZS Manawanui, totalling $3.79b in the 2024/2025 financial year.

But is it enough?

To answer that question, Capie says we need to look beyond New Zealand.

"I think it's probably something that's come home to every New Zealander in the last five years is that the world is becoming a much, much more dangerous place," he says.

"We've seen war return to Europe and the deaths of hundreds of thousands of people in Ukraine. We've seen war in Gaza and in the Middle East. And we've seen coercion begin to be much more acceptable for big powers.

"I think there is a sense that the world that New Zealand used to think of - its security could be provided by distance and also by the workings of international institutions like the UN - I think there's a real sense that that world is rapidly disappearing in the rear-view mirror and I think that raises the question of, 'what are we going to do for ourselves? And what are we going to do with our close partners and our ally Australia?'"

With wars playing out thousands of kilometres away from us and New Zealand being surrounded by vast amounts of ocean, why are we spending so much on our defence?

Fifield says that our government need to do to better to explain their reasoning.

"The government here could be doing, and should be doing, a lot more to convince the New Zealand public even that we need to spend two percent of our GDP on defence.

"But also the government hasn't, in my view, made a good case for who our adversary is, what wars we're preparing to fight. I asked these questions directly to Minister of Defence Chris Penk when I interviewed him [last week] and he didn't respond," says Fifield.

"Because the fact is China has not gotten any closer, we are not South Korea or Japan right in its backyard. But at the same time, it is an increasing threat across the region."