Prime Minister Jacinda Ardern has defended giving money to Papua New Guinea after its leader splashed out on flash cars for APEC, saying New Zealand falls "well short" of other nations when it comes to foreign aid.
Ms Ardern's comments come after her recent trip to Papua New Guinea for the APEC summit, where the Government committed NZ$10 million towards improving vaccination outcomes.
The Government also announced a contribution to the country's plan to expand electricity.
Most developed nations have an aspiration of 0.7 percent so we fall well shy of that.
That's despite Papua New Guinean Prime Minister Peter O'Neill spending millions on a fleet of 40 Maseratis for APEC. Ms Ardern says she's confident none of New Zealand's money went toward the luxury cars.
On The AM Show on Tuesday, she was asked if she was putting foreign aid ahead of improving Kiwis' wellbeing, with a Salvation Army report out on Monday showing one in five Kiwis can't afford Christmas this year.
"We're always having to balance the fact that, of course we have need in New Zealand... and the proportion that we put forward is pretty small - between 0.2 and 0.3 percent of GDP," she told host Duncan Garner.
"Most developed nations have an aspiration of 0.7 percent so we fall well shy of that and have done for a long time."
Foreign Minister Winston Peters made the vaccination announcement during the official opening of the St John Ambulance Operations Centre in Boroko, which was built with the support of New Zealand Government funding.
"The current polio outbreak in Papua New Guinea is a tragedy for those children and families who have been affected," he said.
But in light of the Government's increased foreign aid spending, questions have been raised over its commitment to people struggling at home.
"We do have need at home, so for us it's about incrementally making sure that we're keeping it at the level where it needs to be," Ms Ardern told The AM Show. "I do think there is a balance to be struck [when it comes to aid]".
The Prime Minister pointed to the Government's announcement last year that it would spend $5.53 billion over four years on an ambitious plan to help low-income families in New Zealand and cut the child poverty rate by nearly 50 percent.
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But with rent rising by $30 since the Government was elected, and petrol prices recently reaching a 30-year high, many Kiwi families cannot afford to celebrate Christmas this year, a new survey by The Salvation Army has found.
UNICEF New Zealand executive director Vivien Maidaborn says the Government has lived up to its promise of increasing money for low-income households, but says the situation families are finding themselves in is getting worse.
The funding for Papua New Guinea's National Electrification Roll-Out Plan to connect 70 percent of households to electricity by 2030 will be allocated from New Zealand's Overseas Development Assistance budget.
Only 13 percent of Papua New Guinea's population has access to electricity, and Ms Ardern says the partnership will connect more households, businesses and service providers across the country to electricity.
"New Zealand has been a significant partner with Papua New Guinea in the energy sector for over five years. This commitment comes in addition to a $24.7 million contribution to the Rural On-Grid Extension Project and $10.25 million to the Town Electrification Investment Programme.
Together with Australia, New Zealand makes up 50 percent of the development assistance in the Pacific Islands according to the latest data from the OECD.
The Government announced a huge boost in funding for New Zealand's foreign budget in May this year. In a Parliamentary speech ahead of the 2018 Budget, Mr Peters said that $714.2 million in "additional operating funding" would be allocated to foreign aid, primarily in the Pacific.
Mr Peters criticised the previous National-led Government for not adequately keeping up with the country's international challenges.
"New Zealand's credibility as a humanitarian donor has been tested," he said, referring to the previous Government's relatively low aid support for multilateral and humanitarian agencies.
Watch the full interview with Jacinda Ardern above.
The AM Show with Duncan Garner, Amanda Gillies and Mark Richardson, weekdays 6-9am on RadioLIVE and streaming live to the rova app on Android and iPhone.