In his speech at the Shangri-La Dialogue conference in Singapore in late May, U.S. Defense Secretary Pete Hegseth highlighted those Indo-Pacific nations—including Australia, Japan, the Philippines, and South Korea—that Washington considers “model allies” because they have stepped up to spend more of their GDPs on defense. One country noticeably absent from Hegseth’s list was New Zealand.
The omission seemed intentional, given that New Zealand spends a mere 1 percent of its GDP on defense. Wellington has a plan to get closer to 2 percent by 2032, but that number is still far from the 3.5 percent that the Trump administration now considers to be the global standard for allies.
In his speech at the Shangri-La Dialogue conference in Singapore in late May, U.S. Defense Secretary Pete Hegseth highlighted those Indo-Pacific nations—including Australia, Japan, the Philippines, and South Korea—that Washington considers “model allies” because they have stepped up to spend more of their GDPs on defense. One country noticeably absent from Hegseth’s list was New Zealand.
The omission seemed intentional, given that New Zealand spends a mere 1 percent of its GDP on defense. Wellington has a plan to get closer to 2 percent by 2032, but that number is still far from the 3.5 percent that the Trump administration now considers to be the global standard for allies.
The speech prompted veteran New Zealand journalist Anna Fifield to poke Hegseth: “I could not help but notice that New Zealand was missing from your list of countries there. … Would you consider New Zealand to be a free rider?” Hegseth responded that “2 percent is not enough, and so 2 percent is freeloading.”
It is rare in New Zealand that a comment on foreign policy causes such a firestorm—but Hegseth’s “freeloading” remark has done exactly that. Since U.S. President Donald Trump returned to office, Wellington under Prime Minister Christopher Luxon and his conservative National Party have been maneuvering New Zealand to boost defense outlays and capabilities, not least to appease the United States.
The plan under consideration would nearly triple New Zealand’s defense budget from around $3 billion today to $8 billion by 2032. Indeed, last year, then-New Zealand Defense Minister Judith Collins justified the increase, arguing that it is “very clear that New Zealand is not immune from the increasing tensions being felt throughout the world.”
But Hegseth’s remark reopened an old wound in New Zealand. On one side of the debate stands the National Party, which has been quietly trying to raise defense spending to meet the moment. New Defense Minister Chris Penk, who was in the room when Hegseth spoke, jumped in to deny that New Zealanders are freeloaders. Rather, Penk characterized the planned increase from 1 percent to 2 percent defense spending as a major accomplishment.
Since then, it appears that New Zealand’s senior leaders are directing their unhappiness not at Hegseth but at Fifield for prompting the unwanted statement—and for pointing out the shortfall compared to Trump’s 3.5 percent target in her question, thus inadvertently diminishing Wellington’s accomplishment. Instead of reopening the debate about defense spending, the National Party would have rather just let the issue fade away.
Hegseth also opened a can of worms in New Zealand’s domestic politics, because on the other side of the defense debate is the opposition Labour Party and the majority of New Zealanders, who have generally tended toward pacifism and believe that their government should prioritize social programs over defense. To be sure, the long-neglected New Zealand Defence Force requires a major overhaul, but polling indicates that most citizens do not believe that this should come at the expense of government programs that improve their daily lives.
Making matters worse, Penk, in response to a reporter’s question at the same conference in Singapore, questioned New Zealand’s strict nuclear-free policy, which denies access not only to ships and aircraft carrying nuclear weapons, but also even to aircraft carriers and submarines that use nuclear energy only for propulsion. He said that because the country’s only formal defense ally, Australia, is now acquiring nuclear-powered submarines as part of the Australia-United Kingdom-United States security pact, “it would be helpful, I think, for us to have that conversation [about potential port calls by nuclear-powered ships] in New Zealand.”
Penk’s comment stomped on the third rail of New Zealand politics. The country has been staunchly against all things nuclear for decades. This even resulted in the Reagan administration downgrading the country’s status from security ally to partner when Wellington would not allow the U.S. Navy’s nuclear-powered or nuclear-armed ships to make port calls.
Wellington’s stance in part reflects its perceived obligation to its Pacific island neighbors, which were affected by U.S., British, and French nuclear weapons testing throughout the Cold War and whose residents feel the health effects of these tests to this day. Penk’s musings caused a political mess for Luxon, who quickly clarified that New Zealand’s long-standing and highly popular anti-nuclear policy had not changed.
Some New Zealanders—perhaps most—recognize that their previously benign international environment, whereby their islands were far removed from any potential great-power war, was a short-lived reality. As a case in point, New Zealand was unnerved in February 2025, when a Chinese naval task force entered the Tasman Sea between Australia and New Zealand to carry out live-fire drills, underscoring Beijing’s growing ability to project military power deep into the South Pacific. Yet after decades of pacifism, New Zealanders are also uncomfortable with some of the consequences for their own defense posture, not to mention the sharper vocabulary surrounding concepts such as “enhanced lethality” that are now present in their own new “Defence Capability Plan.”
All of this has prompted an almost existential debate in New Zealand about whether it should continue to pursue general nonalignment—or if it should align itself more closely with the United States to counter China as the most obvious regional threat. Those who are wary of Washington—especially now that U.S. allies and partners alike are taken advantage of and treated like pawns by Trump—argue that Wellington must hold the line. Others, primarily on the conservative side, see real value in partnering with the United States to address what seems to be a growing challenge.
To be sure, the choice did not always seem so stark and controversial. During her tenure, Prime Minister and Labour Party head Jacinda Ardern pushed Wellington toward a more hawkish line on China. She even met with then-President Joe Biden at the White House to express her concerns about Beijing’s growing malign influence throughout Oceania.
But the recent debate has drawn a starker difference. Beyond the awkward headlines, the Fifield-Hegseth exchange exposed a fundamental tension at the heart of New Zealand’s foreign policy: whether a country that has long defined itself through strategic independence can continue to do so in an era of intensifying great-power competition. Hegseth’s “freeloading” remark may eventually fade from memory, but the debate that it unleashed over New Zealand’s place in the world is only just beginning.
The episode also carries a broader lesson. Across the Indo-Pacific, governments are increasingly discovering that efforts to move closer to the United States do not necessarily guarantee praise, reassurance, or even recognition from Washington. Instead, the Trump administration’s expectations continue to shift and evolve, often faster than these countries’ domestic politics can accommodate.
For many leaders, the challenge is no longer simply whether to strengthen security ties with Washington, but how to do so without creating political backlash at home or sacrificing the strategic flexibility that they have spent decades cultivating. If a country that has already committed to doubling defense spending can still be labeled a “freeloader,” others may begin to wonder whether satisfying the Trump administration’s demands has becoming a moving target.
