New Zealand's Finance Minister stated the country lacks the financial capacity to significantly increase defense spending to meet potential US expectations, calling a 2% GDP target challenging.

New Zealand does not have the fiscal headroom to increase defence spending to the levels the US might expect, Finance Minister Nicola Willis said. US Defence Secretary Pete Hegseth told delegates at an Asia security forum in Singapore on Saturday 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...