In the hallowed halls of New Zealand's Parliament, where grand visions are meant to translate into tangible economic relief, Prime Minister Christopher Luxon has presided over a year of economic despair that would make even the most stoic Kiwi reach for the smelling salts.
Remember the halcyon days of the 2023 campaign, when Luxon, with the earnest zeal of a corporate retreat facilitator, pledged a "laser focus" on the cost-of-living crisis? "We'll get New Zealand back on track," he intoned, promising tax relief and a booming economy to ease the squeeze on households battered by inflation and stagnant wages.
Fast-forward to September 2025, and that laser focus appears to have been swapped for a funhouse mirror: distorting reality while delivering nothing but hot air. The latest Stats NZ figures paint a grim portrait: gross domestic product plunged 0.9 per cent in the June quarter, a sharper contraction than the paltry 0.3 per cent dip forecast by the Reserve Bank. Annual GDP is down 1.1 per cent, per capita output has nosedived 1.1 per cent, and the economy has now shrunk for three of the last five quarters. This isn't a blip; it's a full-throated recession, broader and deeper than the Global Financial Crisis in per capita terms.
Enter Finance Minister Nicola Willis, ever the loyal deputy, clutching at straws with the veracity of a rabid pit bull. In the wake of the June quarter's dismal data, having worn out National's usual blame Labour spin, she pinned the blame squarely on Donald Trump's tariffs, decrying them as the villainous force derailing New Zealand's fragile recovery.
Yesterday, RNZ reported:
The economy had a worse than expected slump in the middle of the year as weaker manufacturing, construction, and agriculture activity fell sharply, backing the case for further interest rate cuts.
Stats NZ data shows gross domestic product (GDP) - the broad measure of economic growth - fell 0.9 percent in the three months ended June, to be 1.1 percent lower than a year ago.
Expectations had been for a quarterly contraction of about 0.4 percent, although growth for the previous quarter was revised marginally higher to 0.9 percent.
"GDP has now fallen in three of the last five quarters," Stats NZ spokesperson Jason Attewell said.
Finance Minister Nicola Willis was pinning the blame for the economy's slump on global turmoil and uncertainty driven by the United States' tariff roll-out.
In a statement, she said the US announcement resulted in firms and households putting off spending decisions.
Finance Minister Nicola Willis cried foul, claiming Trump's tariffs "disrupted my momentum" as if U.S. protectionism single-handedly sank New Zealand's economy. But the facts paint a different picture. The 0.9% GDP contraction hit in the April–June 2025 quarter, with economic activity tanking well before the full impact of Trump's "Liberation Day" tariffs, announced on April 2, 2025.
While a 10% tariff on Kiwi exports took effect on April 5, with a hike to 15% delayed until August, the economic sting from these measures lagged, hitting exporters months later. Willis' attempt to pin the blame on Trump is just another dodge, sidestepping the harsh reality that her government's own policies have been the true wrecking ball.
Today, RNZ reported:
An economist says the finance minister has not been a responsible manager for the country's finances.
But Nicola Willis is shrugging off calls to resign, saying Prime Minister Christopher Luxon has confidence in her and the plan to revive the economy.
And at a media briefing on Friday, Luxon threw his full backing behind Willis to carry on as minister of economic growth.
"I don't think there's a single New Zealander that could do a better job than Nicola Willis," he said.
"Nicola Willis is the best finance minister New Zealand's ever going to have, she's an outstanding person, she's an outstanding person, she's an outstanding finance minister, economic growth minister, she's doing an exceptionally good job in a very tough situation.
"I totally back her. I'm very very proud to call her my friend, I'm very very proud to have her in the role that she is and she's outstanding."
Luxon blamed the dip in the economy in the June quarter on the global situation saying one in four of New Zealand's jobs were tied to trade.
"The good news is that that's in the past, we're growing now, we're projected to grow more strongly going into the next quarter."
Luxon said he had a very short conversation with Willis after the criticisms, telling her she had his full backing and that everything was "full steam ahead".
Willis was the best person to be finance minister and economic growth minister in the country, he said.
"Nicola's done an outstanding job of you know getting our fiscals in shape in terms of that's lead to low inflation, lower interest rates, it's going to get the economy growing, it's going to get people back into employment again which is fantastic, but we also keep talking all the time - what more can we do?"
Luxon called criticisms from former minister Sir Roger Douglas that Willis was not up to the job "absolute rubbish".
Since National slithered into power in late 2023, the coalition's austerity playbook has been as predictable as it is punishing. Public sector redundancies have ballooned to over 10,000 jobs axed, from Health New Zealand's 2,042 cuts (including 500 confirmed redundancies) to the Ministry of Education's 303 fewer full-time equivalents by July 2025. These aren't faceless figures; they're nurses, teachers, and administrators whose departures have hollowed out essential services.
Funding cuts have followed suit: baseline budgets frozen or trimmed across ministries, with the 2025 Budget delivering a $1.1 billion gouge in spending allowances. Add in the repeal of fair pay agreements, the cancelling of 3000 state house builds, the axing of the Clean Car Discount, and a bonfire of infrastructure projects like Wellington's public transport upgrades, and you've got a cocktail of downward pressure that's left the economy sputtering. Manufacturing and construction have shed over 18,000 jobs in the past year alone, while businesses shutter at the fastest rate in a decade.
Broken Promises, Broken Economy: Nicola Willis’ Fiscal Train Wreck
— Kelvin Morgan 🇳🇿 (@kelvin_morganNZ) September 18, 2025
📍OPINION: Finance Minister Nicola Willis, who once promised to transform New Zealand’s economy with a surplus by 2027, has instead driven it into a mire of contractionary austerity and unfulfilled commitments.… pic.twitter.com/gjRTSaQ1sP
The chorus of discontent is growing, even from the right's own choir. Commentators like Matthew Hooton and Roger Douglas, hardly the bastions of the left, have piled on, bewailing Willis' fiscal folly and Luxon's inertia amid self-inflicted recessionary headwinds. Whispers in Wellington's corridors suggest even insider Tories are fidgeting, with calls for Luxon to boot Willis before she drags the ship under. Small wonder: Luxon's approval ratings are in freefall, slumping to a net -7 in April's 1News-Verian poll, his preferred PM score dipping to 19.6 per cent in the latest RNZ-Reid Research poll, his lowest in two years. Labour's Chris Hipkins, for all his post-election torpor, now outpolls Luxon as preferred leader. Luxon doesn't have any solutions, just spin: National's propaganda machine churns out tales of "momentum" and "green shoots" while families ration the Weet-Bix and retailers bolt the doors.
Ah, but that "laser focus" on the cost-of-living crisis? What a joke, a punchline delivered with the straight face of a man who's never queued at a supermarket let alone stood in line at the food bank. National's FamilyBoost flagship, meant to hand 21,000 households $150 fortnightly, has flopped spectacularly: a year on, just 153 families have claimed the full whack. The rest? $7 a week, not even enough for a block of butter. Luxon's rhetoric ignores the shuttered shops, the tens of thousands of young Kiwi emigrants fleeing to Oz for a brighter future, the quiet desperation etched on people's faces from Kaitaia to Bluff. This isn't leadership; it's a sleight of hand that leaves Kiwis holding an empty wallet.
As the austerity deepens New Zealand's economic malaise, one can't help but ponder: if Luxon's plan is this threadbare, what hope is there for a recovery while National are in power? The emperor's wardrobe is in tatters, and the court jesters, Willis chief among them, are entirely out of valid excuses.
