Peters slams ‘scrooge-like approach’ to foreign affairs, claims ‘highly active diplomacy’ is making up for budget shortfalls

Wednesday, 20 May 2026

Budget shortfalls are to blame for New Zealand’s voice not being strong on the world stage - and “a highly active diplomacy” is compensating for the lack of resources.

That was the message from Foreign Affairs Minister Winston Peters in a keynote speech to policy-makers, academics and business leaders on Wellington’s waterfront on Wednesday afternoon.

The group - hosted by the Asia New Zealand Foundation - had gathered to interrogate the growing role of small and middle powers in Asia, though the symposium fell the day after the Finance Minister announced she would be slashing 8700 roles in the public service by mid-2029.

Peters laughed off questions about job cuts in the Ministry of Foreign Affairs and Trade (Mfat) on Tuesday and by Wednesday the rationale for his confidence became clearer when Nicola Willis confirmed his department would not be required to make savings this year.

Read more:

• Peters laughs off questions about job cuts for diplomats amid cull of public service jobs

• Budget 2026: Where might the public service cuts fall? The big and small ministries facing the knife

• Budget 2026: Nicola Willis’ public service overhaul goes well beyond headcount

While Willis said Mfat would be required to find savings of 5% in both 2027 and 2028, Peters has argued “no budget overrides a future government”.

He’s also pushed back on the Finance Minister’s suggestion foreign affairs can do more with less.

“Foreign affairs is being enormously efficient as we speak,” he told The Post.

“With the greatest respect, this scrooge-like approach has been what National and Labour have done all these years, apart from Norman Kirk. They talk a big game, get there and do nothing when it comes to supporting foreign affairs offshore. That’s their record.”

A large chunk of Peters’ speech laid out his case for foreign policy investment being a worthy price to pay at a time of “order-shattering” geopolitics.

“Our voice is not strong,” he told those at the symposium.

“We fight our budget corner hard, but until future New Zealand governments – whoever leads them – see defence and foreign policies not as a cost, but as a driver for making New Zealanders richer and more secure, a highly active diplomacy will be needed to compensate for the lack of resources. It’s an absolute necessity while we play budget catch-up.“

Peters said he had begun the term “behind the curve” in foreign policy settings and resolved to lead “a highly active diplomacy, with more energy and urgency, as the times and circumstances demanded”.

In the 2½ years since becoming minister, Peters has spent more than seven months offshore, visited 54 countries - 35 of them more than once - and held 560 foreign policy engagements, he said.

“It cannot and must not be a one-off. We believe that for New Zealand to have its voice heard by others, and its interests considered, future foreign ministers will need to replicate our level of activity.

“In the Pacific we call it talanoa – meeting face to face – and its value is crucial for advancing or defending our interests, and not just in the Pacific. We have invested a lot in our international relationships because they are crucial for growing our prosperity and defending our security. Our foreign policy, in this sense, is a means to achieve those twin ends.“

Peters said the effectiveness of New Zealand’s diplomatic efforts was closely related to the level of resourcing behind them.

“While we are acutely aware that it is the taxpayer to whom we are responsible for every spending choice made, we also think, during this tumultuous time, the public has never been more supportive of our efforts to bolster the country’s economic growth and boost its security.“

Peters said he had compared New Zealand’s “diplomatic footprint” with countries of similar GDPs or populations and found the likes of Ireland and Croatia had invested more in diplomacy and were more economically successful than New Zealand as a result.

“They are also more secure because they can afford to sustain strong spending to grow their defence capabilities.

“Enduringly robust defence spending not only strengthens a country’s foreign policy effectiveness, as we learned between 2017-20, but it gives heft to that country’s voice on the international stage. Singapore is a prime example of a small state whose voice is widely respected and whose voice is given strength by its robust defence spending.”

The coalition is investing $12 billion in defence through its Defence Capability Plan over the next four years - $9 billion of which is new money.

It will bump New Zealand’s spend on defence from just over one per cent of GDP to more than two per cent in the next eight years.

But even as the government pours many dollars into defence, Peters still holds the view the coalition should be spending more - not less - on foreign affairs too.

“Most definitely,” he told The Post.

“We are competing with countries like Ireland, like Singapore, similar sized countries [with] two and a half times as many people in the field that we've got.

“We're a trading nation, dependent on trade completely, and we need more people in the field. That's been my view in all the times I've been the minister.”

Willis has said she agrees with Peters on many things but not this.

“We are in a changing world and the Ministry of Foreign Affairs needs to adapt with that world and that includes making the most of efficiencies available to it in the back office to better support our diplomats and frontline workers around the world.”

It’s no secret Willis and Peters have had extensive debates about Mfat’s funding but it’s now clearer the pair are at ideological odds over the future of New Zealand’s diplomacy.

They may have to to find common ground on how to respond to our changing world if National and New Zealand First are to work together again after the election.