Nicola Willis’ Budget 2025 Doesn't Stack Up

In true National Party fashion, Finance Minister Nicola Willis unveiled Budget 2025, trumpeting it as a “Growth Budget” to drag New Zealand out of its economic mire. But dig beneath the glossy rhetoric, and you’ll find a fiscal plan riddled with financial holes, short-sighted cuts, and a callous disregard for the vulnerable. This isn’t a budget for growth…it’s a blueprint to increase inequity and create even more economic instability.

 

First, let’s talk about the very large structural deficit elephant in the room. Treasury’s flagged a gaping 2.7% of GDP operating deficit for 2024/25, with net core Crown debt ballooning to 46% of GDP by 2027/28, double the prudent pre-COVID levels.

 

Willis’ Budget Policy Statement offers no clear path to rein this growing debt in. It’s a reckless oversight, leaving New Zealand exposed to global shocks like the U.S. tariffs, which Treasury warns could shave 0.2% off GDP growth. It also exposes the government to the risk of credit ratings downgrades, with Standard & Poors already warning that National's austerity budget only partially offsets the revenue declines they've caused, and that elevated twin deficits could jeopardize the country’s credit ratings. With tax revenue projected to already be $13.3 billion short, thanks partly to the $6.6 billion Investment Boost tax break for businesses (delivering a measly 1% GDP bump over two decades), this budget bets on fairy-tale optimism while the government’s books bleed.

The National Party’s previous budgets, notably 2023 and 2024, faced criticism for shortfalls and blowouts. A $3.3B–$5.2B funding gap in 2023 left promises like tax cuts and infrastructure underfunded. Health and education faced shortfalls due to inflation and rising costs, while cyclone recovery costs risked $500M–$1B blowouts. Tax relief in 2024 risked a $1B–$2B deficit if revenue fell short, reflecting overly optimistic growth assumptions and incorrect fiscal planning. Fast forward to Budget 2025, and National hasn't learnt from their mistakes at all:

Then there’s the slash-and-burn approach to public services. Willis’ $1 billion operating allowance cut and targeted hits to Oranga Tamariki, pay equity, and discretionary grants scream austerity, not progress. The Auditor-General already criticised last year’s 6.5% Oranga Tamariki cut as a chaotic mess, disrupting care for at risk children. However, Willis has totally ignored this, with Budget 2025 doubling down on these cuts, which risks further service breakdowns for the most vulnerable. Early Childhood Education (ECE) gets a pathetic 0.5% inflation adjustment, which in real-terms is a cut of 1.6%, piling pressure on providers and parents alike. This isn’t fiscal discipline; it’s a deliberate choice to starve essential services while handing tax breaks to landlords and tobacco barons. The coalition of chaos has clearly got its priorities wrong, and you only have to look at who is funding their campaigns to see why.

The KiwiSaver changes are another kick in the guts for ordinary hardworking New Zealanders. Halving government contributions to 25 cents per dollar (capped at $261) and hiking minimum contributions to 4% hits low-income savers hardest. Excluding those earning over $180,000 from contributions sounds progressive but bizarrely spares NZ Super eligibility from similar means-testing. It’s a muddled policy that undermines retirement security for the young and working poor, all to save a few bucks. Financial experts like Frances Cook warn this could deter people from saving altogether. It’s a classic National move to prioritise short-term optics over long-term stability. And let’s not forget the $2.7 billion “savings” from gutting 33 pay equity claims. Rushed through under urgency, the Pay Equity Amendment Bill invites legal challenges that could cost taxpayers dearly. It’s a gamble that screams incompetence, trading immediate savings for future liabilities, a trade-off that only a very desperate and short-sighted government would be willing to make.

The good people of New Zealand are right to be outraged. Nicola Willis is wasting taxpayer dollars on delivering less while slashing even more from our already stretched social services. Budget 2025 isn’t about growth…it’s about entrenching inequality, dodging accountability, and kicking the debt can down the road. New Zealanders deserve better than this fiscal fiasco. New Zealand should therefore remove the coalition of chaos before they can do any further harm.