Why does Tokelau receive financial aid from New Zealand?

Tokelau receives financial aid from New Zealand primarily because its budgetary expenses regularly exceed its internal revenue.1

The territory's economic development is significantly constrained by its small size, geographic isolation, and a lack of natural resources. Consequently, Tokelau's gross domestic product is lower than the amount of financial assistance required to maintain its administration and public services. While the territory generates some revenue through the sale of stamps and coins, as well as through remittances from its large expatriate community, this is insufficient to cover its costs. As a result, New Zealand provides the necessary aid to support the territory, which it has administered under the Tokelau Islands Act of 1948.1