New Zealand's Very Expensive Military Gamble

There is a particular kind of recklessness that masquerades as strategic vision. It does not announce itself as folly. It arrives dressed in the language of security partnerships, capability upgrades, and alliance obligations, and it is precisely this brand of recklessness that now defines the Luxon government's approach to New Zealand's military procurement.

The National-led coalition has committed approximately NZ$2.7 billion to the purchase of five Sikorsky Seahawk helicopters and associated military assets from the United States.

In August 2025, RNZ reported:

Watch: Judith Collins and Winston Peters reveal new $2.7b planes and helicopters

The purchases are the first that were forecast in the Defence Capability Plan unveiled in April, setting out an expected $12b in spending on defence assets over four years, $9b of that being new money.

The plan overall lifts New Zealand's defence spending to more than 2 percent of GDP over the next eight years.

There is a fundamental and largely unexamined question concerning these significant military acquisitions: what precisely does New Zealand receive in return for spending billions of dollars on American hardware, from an administration that has demonstrably withheld already-purchased, already-paid-for weapons from other allied nations the moment it suited Washington's political interests?

The answer, on current evidence, is very little. When the Trump administration ordered a freeze on military transfers, the consequences were not merely theoretical. Weapons already loaded onto trucks in Poland for onward delivery to Ukraine were stood down. Ammunition purchased using funds specifically appropriated by Congress for the purpose was simply not delivered.

Countries that had paid in good faith were left without the equipment they had contracted for and were offered no refund. These were not adversaries. They were partners, customers, and in several cases treaty allies who had done everything Washington asked of them.

New Zealand confirmed through MFAT that it had zero input into the Trump administration's Foreign Arms Sales Task Force priority partner list and did not even know whether it appeared on it. That the directive came with not only incentives but obligations: priority partners were expected to share production costs more substantially. New Zealand was apparently expected to pay more, without being consulted about whether it was considered a priority partner at all.

In April 2025, RNZ reported:

Officials don't know if NZ is on US priority weapons trading partners list

The NZ Defence Force is competing to get arms under its new $12 billion Defence Capability Plan in a world market where military spending is surging.

The NZDF talked with US lawmakers in April about potential opportunities to buy from the US, Official Information Act papers showed.

A foreign arms sales taskforce newly set up by Trump said it sought international input before launching its first six initiatives last month, including new legislation aimed to help lower the barriers that limit the proliferation of high-tech arms.

MFAT said: "New Zealand has not had any input into the taskforce."

 

That situation has since worsened. In February 2026, Trump signed a new executive order formally establishing an America First Arms Transfer Strategy, directing the Secretaries of Defense and State to develop clear priority partner criteria within 90 days and produce a prioritised sales catalogue within 120 days.

The order makes explicit that countries investing more heavily in their own defence and occupying a critical geographic role in US strategic plans will receive preferential treatment.

Despite increasing the military budget to 2% of GDP by 2032/33, as requested by the Trump administration, New Zealand has still received no public confirmation that it appears on that list. 

Official papers meanwhile show that 60 percent of the NZ Defence Force's $6 billion in arms currently on order is sourced from the United States. New Zealand has committed billions to a supplier whose formal priority framework it had no input into, whose criteria it may not meet, and whose list it may not even appear on.

This is the arrangement the Luxon government has chosen to deepen, at a cost of billions of dollars, during a period in which the geopolitical reliability of the United States as a supplier has been placed in serious and documented doubt. The pattern is not obscure. It is structural. American arms transfers have been converted from security commitments into instruments of political leverage, withheld when recipients pursue independent foreign policies, dangled when compliance is required, and apparently non-refundable in either case.

Meanwhile, the broader context in which New Zealand is making these procurement decisions has shifted considerably. The United States and Israel have conducted military operations across at least six countries in the past year, including strikes inside Qatar, a US Major Non-NATO Ally hosting the largest American air base in the region, without Doha's consent and with Qatar notified so late that it had no practical opportunity to prevent the attack.

The lesson for smaller allied nations is stark: allied status under the current Washington-Tel Aviv axis confers no guaranteed protection, and may offer no recourse whatsoever if the political winds change.

Against this backdrop, Winston Peters signed New Zealand's name to a joint statement expressing readiness to contribute to military efforts in the Strait of Hormuz, a strait closed in direct response to an American-led war launched without UN authorisation, and then spent the following week insisting the commitment meant nothing of the sort.

A functioning foreign minister cannot sign a document on a Friday and disclaim its meaning on a Tuesday. The commitment was made when New Zealand's name appeared on the paper.

What the Luxon government has managed, with impressive efficiency, is to spend billions locking New Zealand into military dependency on a supplier that does not consider us a priority, to sign documents attaching us to a war we had no hand in starting, and to do all of this without extracting a single meaningful concession in return. Not a tariff exemption. Not any guarantee of equipment delivery. Not a formal security guarantee. Not even confirmation that our name appears on the correct list.

Deference to Washington, as former Prime Minister Helen Clark and others have noted plainly, is not only distasteful. It is not working. And two and a half billion dollars' worth of helicopters, purchased from a government that views arms transfers as political bargaining chips, does not constitute a defence policy. It constitutes a very expensive gamble on the continued goodwill of an administration that has shown, repeatedly and in writing, that it does not feel especially obligated to honour its side of the arrangement.

New Zealand deserves better than that. It is not clear that this government has even noticed.

The Politics of New Zealand's Rental Crisis

There is a particular kind of dishonesty that often dresses itself up as economic theory. For years in this country, we were told that New Zealand's rental market was simply supply and demand in action, the invisible hand at work, efficiently allocating housing to those who valued it most.

What it actually was, of course, was something rather more tawdry: a system engineered to extract the maximum possible sum of money from anyone unfortunate enough to need to rent a roof over their head.

Let us be precise about the mechanism. When a prospective tenant applied for a rental property in New Zealand, they were routinely required to declare their income. This was presented, with straight faces, as an affordability check. In practice, it functioned as a price-setting instrument. Landlords and property managers could observe what a household earned and calibrate the rent accordingly, not to the condition of the property, not to its size, or whether the plumbing actually worked, but to the upper limit of what the prospective tenants could conceivably be made to pay.

The signal here was not quality. It was vulnerability. Middle and higher-income earners found themselves charged accordingly, regardless of whether they were occupying a warm, well-maintained home or a damp, mouldering box dressed up with fresh paint and a flattering TradeMe photograph. Low-income Kiwis often didn't even get their foot in the door.

The results were entirely predictable. By 2022, some 46 percent of renting households were spending more than 30 percent of their income on rent, compared to just 19 percent in 1988. Since 2003, house prices had increased by 230 percent, whilst median household income grew by only 137 percent. Housing was no longer all about shelter. It had become a very profitable business enterprise.

The insignificant easing of rents we have witnessed recently isn't the result of good governance to remedy this issue. The mean weekly rent in New Zealand for the year to September 2025 was $568, showing a 0.6% decline compared to the prior year. This is welcome in itself, but its cause isn't deregulation or the benevolence of landlords. It is a symptom of a recession and emigration. Net overseas migration slowed to just 13,066 in the year to July 2025, compared to a peak of over 135,000 in late 2023, and the net outflow of New Zealand citizens hit a record high of 47,600 in a single year. People are leaving in their tens of thousands because they cannot afford to live in New Zealand.

That is a grim form of market correction, and it deserves to be named as such. Contrast it with Australia, where sustained migration has pushed rents up by an estimated 43.8 percent over five years, with the typical renter paying around $10,500 more annually than at the start of the pandemic. New Zealand's slight moderation has been purchased at a considerable social cost, the departure of skilled younger workers at a rate that constitutes yet another unsustainable crisis.

Against this backdrop, the Green Party's Renters' Rights campaign proposes a two percent annual cap on rent increases, the reversal of no-cause evictions, a Rental Warrant of Fitness, and the construction of tens of thousands of quality public homes. It represents not a radical departure but a long-overdue acknowledgement of reality.

On Wednesday, RNZ reported:

Greens promise to cap rent rises at 2 percent a year

The 'A home for everybody' policy was launched by the party co-leaders and local MP Tamatha Paul at a rental home in Wellington on Wednesday afternoon.

Co-leader Marama Davidson said with rental costs increasing from 19 percent of incomes in 1988 to 30 percent in 2022, it was time for housing to be treated as a human right.

"In a country like Aotearoa, with our wealth of resources and skills, there is no excuse for people to go without a decent home, let along any home at all."

Co-leader Chlöe Swarbrick said the Greens would build tens of thousands more public homes and support councils and community providers to do the same, stimulating local economies and creating jobs while curbing homelessness and waiting lists.

"This isn't rocket science," she said. "Mass building of public housing almost 100 years ago led to decades of stable, affordable homes for New Zealanders.

ACT Housing spokesperson Cameron Luxton responded by calling the campaign a plan to make more people homeless. This is, to put it plainly, a talking point that serves a specific constituency, and that constituency is clearly not tenants.

On Wednesday, Scoop reported:

Greens Revive Campaign To Make More People Homeless

ACT Housing spokesperson Cameron Luxton says the Green Party’s latest housing policy is a return to the same failed ideas that drove up rents and reduced supply.

“We’ve just seen rents fall nationally for the first time in years after anti-landlord policies were reversed. The Greens now want to take us straight back.

WHO ACTS FOR ACT

The ACT Party was founded on the Rogernomics tradition of Roger Douglas, a disciple of the view that markets, left sufficiently alone, will solve all human problems. Three decades of evidence in New Zealand's housing sector clearly suggests otherwise. Yet the party's institutional memory, and crucially its donor base, remains firmly committed to the proposition that property investors are the real victims of housing policy.

This isn't merely ideological. It is financial, and the money trail isn't difficult to follow. Analysis by RNZ of Electoral Commission records found that people with interests in the property industry donated more than half of their political contributions to National, with ACT receiving 32 percent of the total, and Labour a mere two percent. As Victoria University senior research fellow Max Rashbrooke observed, donors of this scale enjoy a constant level of access to ministers that ordinary voters can only dream of.

The conflicts of interest are not merely financial. They are, in the most literal sense, structural. The 2024 Register of Pecuniary Interests shows that Parliament collectively owns 261 properties, an average of 2.2 per MP. National MPs account for the bulk of this, with 18 of them owning approximately 30 or more rental homes. One does not need to be a committed cynic to ask whether legislators with this much skin in the game are best placed to design fair tenancy law.

THE DAVID SEYMOUR PROBLEM

No examination of this subject is complete without dwelling on the particular and instructive case of David Seymour. For years, Seymour cultivated his public image as the honest outsider who simply could not afford to buy a home, a man of the people standing bravely against the landed political elites of Parliament. It was a compelling narrative. It was also, in material respects, completely untrue.

In 2021, Seymour was forced to correct his Register of Pecuniary Interests to disclose that he was a beneficiary of three trusts, the NN Faithfull Family Trust, the BH and VA Seymour Family Trust, and the Beachcomber Trust, two of which held property including a Northland beach house and a neighbouring section, and his father's house in Whangarei. These interests had not been declared in previous years, in violation of Parliamentary disclosure rules. His return was also filed late, drawing a formal rebuke from the Registrar of Pecuniary Interests, Sir Maarten Wevers.

Seymour called it an honest mistake and claimed he had legal advice saying he did not technically own the properties. That is a distinction the rest of us might find difficult to take seriously. A beneficiary of a trust that holds property stands to inherit or profit from that property. The rules requiring disclosure of such interests are not ambiguous. They are written plainly in Standing Orders, and Seymour is a lawmaker who has sat in Parliament for over a decade... a decade too long some might argue.

What makes this particularly pointed is that in 2017, when he was still falsely presenting himself as property-free, Seymour told RNZ: "The fact that the average National MP owns 2.2 properties of their own might suggest why they have spent a lot of time introducing solutions that you would almost suspect were not supposed to work, because they certainly have not." He was right. He was also, at that moment, a beneficiary of trusts that held the very kind of assets he was criticising his colleagues for owning.

One is entitled to ask what he was really doing when he invoked that argument. He was not speaking truth to power. He was in fact dishonestly presenting himself to the public as just another ordinary Kiwi.

Having now restored interest deductibility for rental property investors as a key plank of the coalition agreement with National, and having championed the removal of no-cause evictions, the right-wing coalition government have ensured that the landlord class which funds their political parties have received a considerable return for their political investment, an investment that is ultimately paid for with globally high rents.

A HOMELESSNESS CRISIS OF THEIR OWN MAKING

The claim that the Green Party's proposals would cause homelessness requires particular scrutiny, because the homelessness crisis is already here. It grew substantially under the very deregulatory settings that ACT champions, and it has worsened measurably under the current neoliberal government.

The number of people sleeping rough in Auckland more than doubled between September 2024 and September 2025. Wellington's Downtown Community Ministry recorded a 25 percent increase in rough sleepers in 2025 compared to the prior year. In Christchurch, the City Mission recorded 270 new clients in just six months to March 2025, up from 156 in the corresponding period prior.

The government tightenning the gateway to emergency housing is partly to blame, a policy that came into force in August 2024. The rate of emergency housing applications being declined rose from 4 percent in March 2024 to 36 percent by June 2025. One social agency reported that in a single month, every one of the 27 people they referred to Work and Income for emergency housing was turned away. The government has also reduced its funding for homelessness support by $79 million compared to the prior financial year.

Emergency housing motel numbers have fallen, from 3,141 in December 2023 to 591 a year later. Associate Housing Minister Tama Potaka declared this a triumph. The Salvation Army described it more accurately as a likely contributor to the rising number of people living on the street.

To invoke the threat of future homelessness as a reason to do nothing about present homelessness is not policy analysis. It is a defunct defence of the arrangement that produced the crisis in the first place.

WHAT ACTUALLY WORKS

The international evidence is available to any government willing to look at it. Vienna has kept housing affordable for over a century through a combination of city land ownership and large-scale municipal development that sets a genuine price anchor for the broader rental market. 

Singapore's Housing and Development Board provides affordable housing to nearly 80 percent of the population, combining public construction, grants, and income-sensitive pricing to ensure that shelter is a right rather than a commodity to be speculated on. Finland, through its Housing First policy introduced in 2008, became the only European Union country where the number of homeless people has consistently declined year on year. These nations did not stumble into housing security by removing tenant protections and trusting property investors to be decent humans. They built it deliberately, through sustained public investment and enforceable standards.

WHAT REFORM MUST LOOK LIKE

Any meaningful reform in New Zealand must begin with a centralised rental database, a single authoritative register from which all real estate agents and property managers are required to operate. Every rental property should be assessed and graded by size, condition, insulation, heating, proximity to services, and structural integrity. Rents should be set in relation to that assessed quality, not in relation to the maximum amount prospective tenants can pay.

Properties should be offered to renters in order of quality, at affordable rents calibrated to their actual standard. The practical effect of this would be significant, as better quality houses would be rented first. Owners should also be substantially financially penalised if they leave their properties empty and dilapidated, or demolish houses that are still suitable for human habitation. A substantial proportion of New Zealand's older rental housing stock fails that test. The Healthy Homes Standards are a beginning. A Rental Warrant of Fitness, independently certified, publicly searchable, and tied to legal occupancy, is the logical next step.

The Tenancy Tribunal also requires substantive reform. The procedural and evidential disadvantages facing tenants in dispute with landlords are well documented. The current framework leans heavily toward those with legal experience and resources. Protections for renters need to be strengthened in law, not merely recommended as guidelines, and legal representation support for tenants at the Tribunal must be funded accordingly.

There are genuine risks in any rent control regime implemented carelessly. A blunt national cap, applied without regard for regional conditions, property quality, or supply dynamics, could suppress new construction if designed poorly. That's why the Green Party also owes New Zealand a costed, detailed build programme alongside its tenancy protections. Ambition without logistics isn't a housing policy. It is a press release.

But the answer to that risk is better policy design, not the continued absence of any policy at all.

And New Zealand must build state houses that people actually want to live in. Not cramped, isolated units on the periphery of cities, but well-designed, well-located homes that integrate their residents into communities with genuine access to schools, transport, parks, and employment. Vienna did not solve its housing crisis by building chicken coops. Neither did Singapore.

The lessons are available. The question, as ever in this country, is whether the political will exists to act on it, or whether we will continue to mistake the interests of an asset-rich parliamentary class for the national interest, and simply give up by accepting the resulting misery as a natural consequence of the free market.

New Zealand Signs Up for Trump's War of Aggression

In a move that can only be described as complicity in an illegal war, the Luxon government has added New Zealand's name to a joint statement calling on Iran to cease its closure of the Strait of Hormuz and declaring the signatories ready "to contribute to appropriate efforts to ensure safe passage through the Strait."

The language sounds measured, even bureaucratic. It is neither. Examined carefully, the statement represents a significant departure from this country's independent foreign policy tradition, and it was made in the service of a war New Zealand had no hand in starting and no business joining.

The context is not complicated, whatever the government's communications staff might prefer. 

On 28 February 2026, the United States and Israel launched coordinated airstrikes on Iran, killing the Supreme Leader and targeting nuclear sites, civilian and military installations. Iran responded by returning fire and closing the Strait of Hormuz, through which approximately twenty percent of the world's seaborne oil normally passes. The US then launched a military and propaganda campaign to reopen the strait. New Zealand signed a statement expressing its willingness to assist with that effort. The causal chain here is not ambiguous.

What, precisely, did Luxon commit the country to? The joint statement expresses a readiness to contribute to "appropriate efforts," which is language deliberately vague enough to mean almost anything while binding the signatories to a political position that is entirely clear. Within days, NATO Secretary-General Mark Rutte was telling Fox News that the signatory countries were working to "implement President Trump's vision" of reopening the strait. Rutte named New Zealand explicitly, alongside Australia, Japan, South Korea, the UAE and the NATO alliance itself.

On Tuesday, the ODT reported:

Peters denies NZ has signed up to secure Strait of Hormuz

Over the weekend, the government joined 19 other countries in condemning Iranian attacks on commercial ships in the Gulf.

In a collective statement, the countries including the United Kingdom and Germany, expressed "deep concern" about the escalating conflict. The statement also expressed its signatories would be ready "to contribute to appropriate efforts to ensure safe passage through the Strait".

They called on Iran to immediately cease threats, laying mines, drone and missile attacks and other attempts to block commercial vessels from travelling through the Strait of Hormuz.

Winston Peters, cornered, insisted that Rutte had "probably been misinformed" and that the statement was "specifically narrow." Christopher Luxon attempted to clarify that any actual contribution would still require Cabinet approval. These reassurances collapse under scrutiny. A foreign minister cannot sign a document on behalf of his country and then disclaim what the document's chief proponent says it means.

The statement exists. New Zealand's name is on it. The framing of the exercise, as Donald Trump's vision being collectively implemented, was provided by the Secretary-General of NATO.

The legal position deserves examination. New Zealand's participation in any military operation would ordinarily require a United Nations mandate. No such mandate exists here. Labour leader Chris Hipkins was correct to note this plainly in Parliament, observing that the commitment was broad and that any support should follow a UN mandate that has not been sought. The UN Secretary-General called for the strait to be opened through multilateral means. The US-led operation is proceeding without that multilateral foundation. New Zealand's statement of readiness to contribute aligns the country with an unlawful, unilateral military enterprise, dressed in the language of freedom of navigation.

This is where Five Eyes becomes relevant. New Zealand's intelligence-sharing obligations under that arrangement have long created an asymmetry in this country's capacity for genuine foreign policy independence. When our signals intelligence apparatus is woven into a shared network dominated by Washington, "independence" in practice often means independence on issues Washington does not care about. The Hormuz crisis is an issue Washington cares very much about. The pressure on Five Eyes partners to close ranks is structural, not merely diplomatic.

The government's preferred framing is that New Zealand's concern is purely economic: fuel security, supply chains, cost of living. These are real concerns, and the closure of the strait has caused genuine hardship. But the remedy for an energy crisis created by a war that the United States started is not to join that war. New Zealand's fuel vulnerability is not Iran's doing. It is the consequence of the US-Israeli strikes, launched without New Zealand's knowledge or consent, in the name of a strategic agenda this country has never endorsed.

 

There is a direct line from Luxon's signature on that joint statement to the Trump administration's campaign to reshape the Middle East by force. The government wants to describe that line as dotted, provisional, not yet fully binding, like a contract initialled but not yet executed, subject to Cabinet review before anything concrete follows. It is not dotted. Signing a joint statement alongside a number of other allied countries, which was then cited by the NATO Secretary-General as evidence of collective support for Trump's strategic "vision" isn't provisional in any meaningful political sense.

The commitment was made the moment New Zealand's name appeared on the document. Cabinet approval for any subsequent military deployment is a domestic procedural step, but it does not undo the political signal already sent to Washington, NATO, and Tehran. That signal is one of solidarity with a military operation that lacks UN authorisation, serves American and Israel's strategic interests only, and has already cost thousands of innocent lives. New Zealand should not be on that list, and the government has not yet honestly explained to the public why it chose to put us there.

It is little wonder, then, that faced with mounting domestic criticism, Peters moved to try and distance himself from the implications of what he had already signed. A foreign minister who endorses a collective statement of military readiness on a Friday and spends the following Tuesday insisting it means nothing of the sort has not changed the country's position. He has merely changed his description of the government's support for an illegal war.

Also on Tuesday, RNZ reported:

Winston Peters says New Zealand not 'rushing to contribute military forces to this conflict'

The Foreign Minister says people shouldn't be alarmed that "somehow we're going to be engaged in some military exercise" following statements by the head of NATO including New Zealand as one of 22 countries "coming together" to secure the Strait of Hormuz.

It comes as Labour raises concerns about the "broad nature" of a joint statement New Zealand was part of over the weekend, and what the commitment may open the country up to.

Winston Peters said there had been "scaremongering" from critics who say the government is "rushing to contribute military forces to this conflict".

"What absolute crap, what absolute nonsense - New Zealand is not a party to this conflict, and we have absolutely no intention of joining it," he said at Parliament on Tuesday. 

  

What we are witnessing is the collision of three failures of political character. Donald Trump, having launched an illegal war of aggression against a sovereign state without UN authorisation, is now leaning on smaller allies to launder his campaign as a collective enterprise. Benjamin Netanyahu, whose government has conducted an extensive project of regional destruction, has found in Trump an accomplice willing to undertake what previous administrations would not start. And here in Wellington, Luxon and Peters have obliged them both, attaching New Zealand's name to their unjustifiable war of aggression and then, when challenged, pretending they had done no such thing.

Peters' assurance that New Zealand has "absolutely no intention" of joining the conflict would carry more weight if he had not already signed a document expressing readiness to do exactly that. These are not statesmen navigating a crisis. They are politicians managing a communications problem, while the bodies mount and the fires burn, and New Zealand's good name is spent in the service of an empire that does not particularly care about our country at all.

The GST Windfall Willis Doesn't Want You to Know About

When a Finance Minister invokes the authority of Treasury, the public is generally entitled to assume that what follows is an accurate rendering of the advice received. That assumption, it appears, does not hold in the case of Nicola Willis and her recent remarks on GST, fuel prices, and the fiscal consequences of the global oil shock caused by Trump's illegal war on Iran.

Speaking in the wake of the Strait of Hormuz disruption that has pushed 91 octane petrol to around $3.30 per litre nationally, with some Auckland forecourts already touching $4.00, Willis offered the following reassurance when questioned about a potential GST windfall for the Crown.

Here's Nicola Willis' 24 March post on Facebook:

Many Kiwis have asked me if the Government will receive windfall tax-gains as a result of rising fuel prices. Short answer: NO! It's a fair question though, so here's what you need to know.
New Zealand's petrol excise tax is a fixed number of cents per litre, not a percentage of the pump price, so the tax take does not increase when fuel prices go up.
 
GST revenue on fuel theoretically rises when pump prices increase, but I'm advised that in the context of current price increases, this is expected to be offset by reduced fuel demand and by lower discretionary retail spending elsewhere as households adjust their budgets. Put another way, as Minister of Finance, I've not been told to expect an increase in the GST-take as a result of the fuel-price spike. 
 
I know this is something many people have asked in good faith, so I'm disappointed to see Chris Hipkins making factually inaccurate claims in response. It's simply misleading for him to allege that the global oil-price shock will somehow benefit the Government at the expense of everyday Kiwis. The simple reality is that petrol price increases will not benefit the Government financially - in fact the opposite is more likely to be the case.

The statement is constructed to suggest that Treasury has assured Willis that higher pump prices will not materially enrich the Crown, because New Zealanders will simply buy less petrol and spend less on everything else. It is, on close examination, a misleading conflation of two quite separate things: the trajectory of GST specifically, and the trajectory of total Crown revenue.

Let us deal with the first claim, that reduced fuel demand will offset the GST gain. This argument rests on the assumption that demand for fuel is highly elastic, that is, when prices rise sharply, people simply stop buying.

The evidence from New Zealand's own context tells a rather different story. Research published by the Motu Institute places the price elasticity of petrol demand in this country somewhere between negative 0.1 and negative 0.66, with short-run estimates at the lower end of that range. At a mid-point estimate of around negative 0.4, a 27 percent price increase would reduce consumption by approximately eleven percent. The GST take on the remaining 89 percent of purchased fuel has still risen by 27 percent. You do not need a Treasury economist to recognise that the arithmetic does not support a cancellation effect.

The second claim, that reduced discretionary spending elsewhere will neutralise the gain, is even weaker. The spending substitution Willis describes is not a disappearance of economic activity; it is a reallocation of it. A household that spends less at a restaurant in order to fill the tank has not removed that money from the GST-liable economy. It has moved it from one GST-bearing transaction to another. Fifteen percent of one hundred dollars spent on petrol raises precisely the same GST as fifteen percent of one hundred dollars spent at a cafe. The total take is, in this respect, broadly unaffected.

What Willis has carefully avoided discussing is perhaps the most consequential dynamic of all: the savings draw-down effect. 

New Zealand's household saving rate was already negative as recently as early 2025, and with wages stagnant in real terms, many families will not simply cut discretionary spending to absorb a $25 to $35 weekly increase in fuel costs. They will reach into whatever savings they have.

That money was previously sitting in a bank account, entirely outside the GST system, generating no consumption tax for the Crown whatsoever. Once it is withdrawn and spent on essentials, 13 cents in every dollar flows to Inland Revenue as GST. Far from reducing the Government's GST take, this dynamic actively increases it. The struggling family dipping into its savings to keep the car on the road is, in effect, funding a portion of its own relief package.

Independent analysis from Infometrics suggests the Crown could receive somewhere in the vicinity of $180 million in additional GST revenue from higher fuel prices over a hundred-day crisis period. Factor in savings drawdown, and the realistic upper bound reaches well beyond $300 million for 100 days, a figure not far removed from the estimate put forward by Opposition Leader Chris Hipkins, whom Willis incorrectly dismissed due to her own disinformation.

On Tuesday, The NZ Herald reported:

 

Fuel crisis: Nicola Willis slams Chris Hipkins’ ‘factually unbased claims’ over Govt’s tax take 

“Put it this way, as Minister of Finance, I’ve certainly not been advised that I’ll be getting windfall tax gains out of the current global crisis, in fact, I’ve been told to brace myself for the opposite, which is that this is likely to reduce Government revenue.”

Willis said she had been “disappointed” by Hipkins’ “factually unbased claims”.

“I think it’s really disappointing to see the leader of the Opposition grabbing what is a fair question but then providing Kiwis with misleading information. This is a time for cool, calm heads.”

 

Treasury's concern about total Crown revenue declining is almost certainly genuine and well-founded. A lack of any government growth strategy and a sustained fuel shock will compress corporate profits, slow economic activity, reduce PAYE receipts, and, if the Reserve Bank is forced to respond to inflation exceeding four percent, tighten financial conditions at exactly the wrong moment. These are serious risks to New Zealands fiscal outlook and Willis should be taking them seriously.

However, what the Finance Minister isn't entitled to do is apply a broad macroeconomic revenue warning specifically to GST in order to deflect from a perfectly reasonable question about whether the Government is quietly pocketing a windfall while ordinary New Zealanders struggle at the pump. Treasury would not have advised her that GST revenue is going to fall, because the evidence strongly suggests the opposite. Any economist who advised this should be sacked!

The Minister would do well to be straight about the distinction, rather than allowing the public to draw an inference that her own officials almost certainly did not intend.

The Coalition of Chaos Is Sinking New Zealand

There's a particular kind of arrogance that afflicts those who ascend to positions of power for which they are manifestly ill-prepared. It is not the arrogance of competence, of someone who has mastered their brief and knows it, but rather the breezy confidence of those who have never been seriously tested, and who mistake the trappings of office for the substance of competent governance.

It is precisely this brand of arrogance that has come to define the National-led Coalition of Chaos, and New Zealanders are now paying a very heavy price for it.

Let us begin with the Minister of Finance. Nicola Willis holds a degree in English literature and a postgraduate diploma in journalism, credentials that would serve her admirably as a book reviewer or a parliamentary press gallery correspondent, but which represent a curious qualification for the stewardship of a $400 billion economy.

One might charitably observe that some of New Zealand's more capable Finance Ministers have also lacked formal economics training. The difference, however, is one of disposition. Where her predecessors such as Bill English  listened to advisers, Willis has demonstrated a troubling tendency to do precisely the opposite.

When fifteen or more of the country's leading economists wrote open letters warning that her austerity programme would deepen and prolong the recession: that you cannot, as the PSA put it with admirable clarity, cut your way to prosperity. Willis's response was, in essence, to disagree and move on. The $43 billion in spending cuts she regards as a badge of honour are, in the view of those who actually study these things, a principal reason why New Zealand's economic recovery has been so anaemic, so halting, and so persistently disappointing.

The consequences of this ideological stubbornness are now documented not merely in the arguments of domestic critics, but in the assessments of global financial institutions. Fitch, the international credit ratings agency, has placed New Zealand's AA+ rating on negative outlook, warning that debt reduction is becoming "more difficult to envisage" as fiscal consolidation has been repeatedly delayed.

General government gross debt is now forecast to rise to 56% of GDP by June 2027, a figure that sits grotesquely above the 36.1% projection made when New Zealand was last upgraded in September 2022. That the delays have occurred across successive governments does not absolve the current administration; it indicts it, for it was handed a roadmap of warnings and chose to ignore them.

Meanwhile, Reuters has laid bare the structural fragility that underlies the government's cheerful forecasts. For decades, New Zealand has relied upon a rising housing market to engineer economic recoveries. That playbook has now failed.

On Monday, Reuters reported:

New Zealand struggles to regain economic mojo without housing recovery

At the same time, economic growth cooled in the fourth quarter, data showed last week, with construction slumping and consumer spending weak, even before the massive distruptions created by the ​war. The unemployment rate stands at a decade-high of 5.4%.

...

Government efforts to stoke growth have been lacklustre, even with an election looming on November 7 that is sure to be dominated by ​voter dissatisfaction over the economy. Prime Minister Christopher Luxon has offered little aimed at reviving the labour market, which is still reeling from waves of public sector layoffs last year.

Even after the Reserve Bank slashed the Official Cash Rate from 5.5% to 2.25%, house prices remain some 20% below their pandemic peak, hollowing out the wealth effect upon which so many households depended. Borrowers are being squeezed, construction projects lie stalled, and a wave of New Zealanders, precisely the professionals and entrepreneurs a genuine growth strategy would seek to retain, have lost hope and are quietly departing for better opportunities in Australia.

Into this fraught domestic picture now falls the additional chaos of Donald Trump's war in the Middle East. Oil price inflation is pushing up borrowing costs globally, potentially forcing the Reserve Bank into a more hawkish stance at precisely the moment the economy can least afford it. New Zealand's substantial dependence on energy imports makes it acutely vulnerable.

Christopher Luxon, a former airline chief executive who has consistently demonstrated that managing a corporate balance sheet is rather different from governing a sovereign nation, appears to have no coherent response to this gathering storm beyond the ritual recitation of talking points about fiscal responsibility, the same fiscal responsibility, one might note, that Fitch has just formally called into question. It's that kind of incompetence that New Zealanders are starting to notice en masse.

Yesterday, The Guardian reported:

New Zealand PM’s ratings dip as fragile economy fails to impress before November election, poll shows

National leader Christopher Luxon drops in preferred PM stakes with rise in people saying country heading in wrong direction

The RNZ-Reid Research poll, released on Monday, also found a growing number of people felt that New Zealand was heading in the wrong direction.

Luxon slid two points to 17.3% in the preferred prime minister stakes – his lowest result across major polls since he became leader in 2023. Labour’s Chris Hipkins also dipped 0.4 points, to 20.7%.

The prime minister’s net favourability – the difference between those who rate his performance as good versus poor – has also dropped from -14 in January to -20.6, his weakest result in the Reid Research series since he became National’s leader in 2021.

Meanwhile, Luxon’s National party has slipped nearly five points behind the main opposition party, Labour. If an election were held today, the parliamentary left and rights blocs would face a hung parliament.

The cruellest irony of this government's tenure is that its most zealous cuts have fallen upon the very investments in science, in public services, in wages, and in housing infrastructure, that might have produced the growth it so loudly claims to want.

While minimum wage workers have absorbed a third consecutive real-terms pay cut, and while $12 billion was stripped from pay equity settlements affecting predominantly female workers, landlords have had their interest deductibility restored and tobacco companies have breathed a sigh of relief to the tune of $3.2 billion dollars.

New Zealand deserves better than a Finance Minister with an English literature degree who dismisses the warnings of fifteen economists, led by a Prime Minister who cannot read a room and remains fluent only in corporate double-speak. Reuters did not mince words: Luxon has offered little aimed at reviving a labour market still reeling from the waves of public sector layoffs his own government inflicted. The Coalition of Chaos has not merely failed to provide a growth strategy. It has actively dismantled the conditions under which one might have been possible.

Trump's War Machine Is Picking Your Pocket

Trump Cheerleader - Greg Swenson

There's a particular kind of audacity required to sit before a global television audience, as the bombs are still falling and the Strait of Hormuz chokes on geopolitical recklessness, and declare that the American economy has never been in better shape.

That audacity belongs to Greg Swenson, founding partner of London-based merchant bank Brigg Macadam, Chairman of Republicans Overseas UK, and reliably one of the most polished purveyors of pro-Trump economic cheerleading available to international broadcasters.

Appearing on Al Jazeera's Counting the Cost, Swenson offered the full bouquet of administration talking points: GDP is growing, jobs are being created, America is a net oil exporter, and therefore the economic consequences of this catastrophic, unprovoked war of aggression against Iran are, essentially, nothing to worry about. Each of these claims deserves scrutiny, because each of them, on examination, is either wrong, misleading, or a deliberate half-truth designed to paper over a steadily worsening reality.

On 18 March, Al Jazeera reported:

Could the Iran war trigger a global recession?

Energy prices are surging as the Iran war disrupts supply, raising risks for the US, China and Europe.

All eyes are on the Strait of Hormuz.

The longer it remains closed, the greater the damage to the global economy.

Iran continues to block tankers from shipping close to 20 percent of the world’s oil supply.

That is roughly twice the disruption the world suffered during the energy shock of the 1970s.

Big oil shocks have historically led to considerable economic turmoil, high inflation, stagnation and recession.

Oil and gas prices are already surging, and economies are expected to slow.

On GDP, Swenson was almost certainly citing the Q3 2025's headline-grabbing 4.4% annualised growth figure, conveniently neglecting to mention that Q4 2025 came in at a feeble 0.7%, the weakest quarter in over a year. That weakness was partly a consequence of the administration's own government shutdown, which the Bureau of Economic Analysis estimates subtracted a full percentage point from growth. Full-year 2025 GDP expansion of 2.1% represents a decline from 2.8% in 2024. This is not a story of economic momentum. It is a story of deceleration dressed up as dynamism.

On jobs, the situation is, frankly, scandalous. The Bureau of Labor Statistics initially reported 584,000 jobs added across 2025, already a modest figure. After receiving complete state-level data, that number was revised down to just 181,000 for the entire year. That is the weakest non-recessionary performance since 2003. It represents a collapse from 1.46 million jobs in 2024, and it sits alongside the second-largest negative payroll revision on record.

Federal employment alone has shed 327,000 positions since January 2025, largely due to the administration's own mass redundancy programme. Economists have taken to calling this a "jobless expansion." When a banker on television tells you more jobs are being created, you might reasonably ask: compared to what?

The net oil exporter claim is perhaps the most cynically constructed of the three. PolitiFact rates this assertion "Half True": the US exports more petroleum products than it imports in aggregate, but it remains a net importer of crude oil, taking in 6.2 million barrels a day whilst exporting barely 4 million.

The refinery mismatch, namely US infrastructure built over decades to process heavier Middle Eastern crude, means that regardless of domestic production volumes, American consumers are paying at the pump for the closure of the Strait of Hormuz. Gas prices have already risen by nearly a dollar per gallon, reaching a national average of $3.88. Only 27% of Americans approve of Trump's handling of fuel costs. The "net exporter" talking point isn't an economic argument. It is a confidence trick.

Swenson is not alone in this enterprise. Senator Lindsey Graham appeared on Fox News to describe Trump's illegal war as "a good investment," adding that once "this regime goes down, we're gonna make a ton of money." This is the authentic voice of American imperial economics: war as commercial opportunity, body counts as market conditions. It should chill any observer with a functioning moral compass.

And then there is the profiteering. Verified reporting from the Wall Street Journal, the New York Times, and Responsible Statecraft confirms that Donald Trump Jr. and Eric Trump are actively investing in Powerus, a Florida drone company positioned to capitalise on the Pentagon's sudden, urgent demand for drone technology, demand created directly by their father's war. In 2025, Trump Jr.-backed companies received hundreds of millions in Defence Department contracts.

On March 10, The New Republic reported:

Trump Sons Back New Drone Company Amid Iran War

Eric Trump and Donald Trump Jr. have found another avenue to make money off their father’s presidency.

President Trump’s sons are trying to sell drones to the Pentagon.

 ...

Powerus wants to build more than 10,000 drones a month. 

The Trump-backed investment firm American Ventures, the Trump-backed investment bank Dominari Securities, and drone parts maker Unusual Machines, the latter of which Trump Jr. is a shareholder and advisory board member of, are involved in the public merger. Eric Trump is also invested in Israeli drone maker Xtend. 

Jared Kushner's private equity firm Affinity Partners, meanwhile, receives $25 million annually from Saudi Arabia's sovereign wealth fund, the same Saudi government that, according to the Washington Post, actively lobbied Trump to attack Iran. The conflicts of interest are not subtle. They are structural.

The media's role in all of this deserves its own reckoning. Coverage of the Strait of Hormuz closure in much of the Western press has been framed primarily as an Iranian aggression problem, a crisis to be managed, rather than the foreseeable and widely forecast consequence of an unprovoked military attack launched without congressional authorisation, without an imminent threat to the United States, and without a coherent post-conflict plan.

Multiple Pentagon officials have confirmed to CNN that the administration underestimated Iran's willingness to close the strait. Pete Hegseth's response was not to acknowledge that failure. It was to berate journalists for reporting it, and to speculate openly about the day CNN would fall under the editorial control of a Trump family ally.

On March 14, Rueters reported:

 

Pentagon chief says he's eager for Trump ally to buy CNN as he blasts war coverage

Pentagon chief Pete Hegseth on Friday said he was ​eager to see Trump ally and Paramount Skydance, CEO David Ellison, take over CNN, as he criticized ‌the U.S. news media's coverage of the Iran war.

"The sooner David Ellison takes over that network, the better," said Hegseth, a former Fox News show host and combat veteran, referring to Paramount's $110 billion deal to acquire CNN-parent Warner Bros.

This determination to suppress inconvenient truth rather than confront it runs as a thread through everything the administration does. Whether it is doctoring economic statistics, dismissing independent analysis, silencing military advisors who question the war's strategic logic, or threatening the institutional independence of broadcasters who report accurately on its consequences, the Trump administration has demonstrated a consistent and deliberate commitment to managing perception over managing reality.

The American public is being asked to trust an administration that punishes honesty, rewards loyalty over competence, and has measurable financial interests in prolonging a conflict it launched without legal authority, without a credible threat to justify it, and without the faintest outline of an exit strategy. That the bombs keep falling while the approval numbers keep sliding appears, to those in the White House, to be just a communications problem.

Then there's the sanctions debacle. Three weeks into the conflict, the Treasury Department quietly lifted sanctions on 140 million barrels of Iranian crude oil at sea, freeing it for purchase by American allies. The United States is now actively generating revenue for the government it is simultaneously bombing. Senator Richard Blumenthal called it "sickeningly, shamefully stupid," and critics across the political spectrum have noted that Trump spent years denouncing Obama for returning $1.7 billion of Iran's frozen funds, and is now handing Tehran up to ten times that amount.

This isn't a strategy. It is the behaviour of an administration stumbling through a war it had no plan to win, launched at least in part to drown out a far more uncomfortable story: the partially released Epstein files, from which the DOJ illegally withheld documents directly implicating Trump in abuse allegations, and which vanished almost entirely from news reports and public discourse the moment the first bombs started to fall.

Trump's overall approval rating tells its own story, though the picture is more nuanced than a single number suggests. Depending on the pollster, his approval sits somewhere between 35% and 42%, with the most comprehensive rolling tracker, Civiqs, recording 39% approval against 57% disapproval across nearly 93,000 registered voters surveyed through to March 19, 2026. Nate Silver's Silver Bulletin aggregator puts his net approval at -15.3, a new second-term low, and three points worse than at the same stage of his first term. The Economist/YouGov survey has 56% of Americans strongly disapproving. Just 27% approve of his handling of fuel costs.

Internationally, the picture is bleaker still. Gallup's survey across 135 countries puts median approval of US leadership at just 33%. Pew Research, polling across 24 nations, found that 62% of people worldwide lack confidence in Trump, with his ratings trailing Joe Biden's by an average of twelve percentage points across those same countries. In Germany, confidence in Trump sits at just 12%. In Mexico, a mere 6%. The man who promised to make America great again has made it, by most global measures, less trusted, less liked, and less respected than it was under the predecessor he never stops attacking. He dismisses all of it: "I don't care about polling. I have to do the right thing."

The "right thing," it seems, has already cost Americans more than $11.3 billion in the first six days, with the conflict now burning through over a billion dollars a day. The Pentagon has subsequently requested a further $200 billion in supplemental funding from Congress, a sum four times larger than originally signalled. When asked to justify the figure, Hegseth's response was, "Obviously, it takes money to kill bad guys." He added that the number might increase, oblivious to the reality that all the United States is currently doing is killing civilians and the world's economy.

At the current rate of spending, that $200 billion would fund the war for just another 100 to 200 days. To put that in perspective, the entire annual US investment in global health, which funds HIV treatment for 25 million people and has saved an estimated 65 million lives since 2002, amounts to $12.4 billion, meaning the $200 billion war chest equals roughly 16 years of US global health spending, all to be consumed in under a year. News agencies are conspicuously silent about what this all means for the United States' already unmanageable $39 trillion of government debt. Meanwhile, tariffs have raised the average American household's costs by $1,500, pushed inflation well above where it would otherwise sit, and handed the Trump family's investment portfolio a timely and lucrative shot in the arm.

Greg Swenson sat before a global audience and called this a success story. It is not. It is a protection racket, and the American public is the one being protected from the truth.