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.

National Government Gaslights over Economic Downturn

New Zealand’s economy is languishing, and the National-led coalition, with Finance Minister Nicola Willis at the helm, has been quick to point fingers at Labour’s Covid-19 spending.

The problem for the coalition of chaos is their narrative is a masterclass in gaslighting, deflecting blame from their own disastrous economic policies while misrepresenting the past. Let’s unpack their mess, because the truth is far uglier than the coalition’s polished spin.
 

Earlier this month, Stuff reported:

The $66 billion Covid spend up: Treasury asks if the Government went too far

Finance Minister Nicola Willis was quick to draw attention to the Tresuary’s conclusions. She has long blamed current economic challenges on the previous Labour Government.

She said this report proved that, as she has said previously, the Labour Government was fuelling inflation.

“Unfortunately, the Labour government ignored [officials’] advice. The consequence was undisciplined spending that pushed up inflation, eroded New Zealand’s previously low public debt position, and fuelled a cost-of-living crisis,” she said.

“The lesson from Labour’s mishandling of the Covid response is that while there are times when governments have to increase spending in response to major events, the fiscal guardrails should be restored as soon as possible,” she added.

During the Covid-19 pandemic, Labour, under Jacinda Ardern and Chris Hipkins, rolled out a lifeline to keep businesses afloat and workers employed. The Wage Subsidy Scheme alone, costing $18.3 billion, ensured millions of Kiwis kept their jobs, while the $70.4 billion Covid-19 Response and Recovery Fund (CRRF) propped up health, aviation, and small businesses.

This was no reckless spending spree; it was a calculated response to a global crisis, with Treasury initially urging broad-based support like wage subsidies to stabilise the economy. The result? New Zealand’s unemployment rate dropped to a 40-year low of 3.2% by December 2021, and GDP rebounded faster than in any other OECD country. Labour’s spending wasn’t perfect, but it kept the nation afloat when the world was drowning.

 

In 2021, Stuff reported:

NZ dollar tipped to head higher as economy rebounds from Covid

The New Zealand dollar is heading higher as the economy recovers from the Covid-19 pandemic, which will make exports more expensive and imports cheaper.

Fitch Solutions on Wednesday lifted its forecast for the currency, and now expects it to average US74.34 cents over the remainder of this year, having averaged US71.84c over the first five months. The kiwi was at US72.52c around midday on Wednesday.

Economic growth would probably pick up by 3.6 per cent this year after a 1.2 per cent contraction last year, which would encourage investment flows into the country and tighter monetary policy, pushing the currency higher, Fitch said.

“We attribute the New Zealand dollar’s robust uptrend in recent months to the country’s strong economic recovery from the Covid-19 pandemic,” Fitch said.

Enter the National Party, clutching a Treasury report that claims Labour blew $66 billion. Sounds damning, right? Except it’s a sleight of hand. That figure includes general government expenditure, not just Covid-specific measures, inflating the narrative of Labour’s supposed recklessness while Willis has been borrowing even more than former Minister of Finance, Grant Robertson.

National’s comparison of New Zealand’s Covid spending to other countries while Labour was in power is equally dishonest, as those nations often exclude general expenditure from their Covid budgets. It’s a classic case of cherry-picking data to paint Labour as profligate while ignoring the global context. This isn’t analysis; it’s propaganda from a dishonest government that can only blame others for their own economic failures.

Meanwhile, the coalition of chaos has embarked on a slash-and-burn mission. Since taking office in 2023, they’ve axed 10,000 public sector jobs, including 2,000 in health, and imposed 7.5% cuts across ministries. Wellington, the public service hub, is reeling, with house prices down 6.8% and 19,500 jobs lost since January 2025. The downturn in the capital city is palpable.

 

In May, Reuters reported:

New Zealand's budget cuts punish public sector, business and workers

"We were told survive until 2025 and it will get better. Well, we're now in May 2025 and it doesn't feel better," said Thomson, who is currently doing paid freelance work.

New Zealand's conservative coalition government releases its annual budget on Thursday and is expected to continue to push fiscal discipline with many ministries not expected to see budget increases.

Spending cuts since December 2023 have been felt across the wider economy but perhaps most acutely in Wellington, a city of nearly 210,000 where the government has historically been a major employer.

House prices in Wellington have plunged 6.8% over the past year, far exceeding the national decline of 1.1%. Population growth stagnated in 2024, contrasting with a 1.7% increase nationwide. Consumer and economic sentiment in the city remains lower than in many other regions, with businesses and residents expressing concern over the city's prospects.

In Auckland, businesses are folding at twice the rate of last year, surpassing even the 2008 GFC failure rate. The coalition’s austerity obsession is sucking confidence out of the economy, leaving workers and businesses stranded and tens of thousands of young New Zealanders heading overseas to find a brighter future.

Worse, National’s policies are hammering the most vulnerable. Workplace Relations Minister Brooke van Velden’s 1.5% minimum wage increase to $23.50, well below the 2.7% inflation rate, is in real-terms a pay cut. Welfare cuts and increases in the cost of living further erodes people's purchasing power, hitting the elderly and disabled hardest. Even for people with a little bit saved, nobody is spending because nobody feels confident in the current government's economic agenda.

With household costs up 5.4% in the year to June 2024, driven by a 9.0% rise in rent, an 8.7% increase in mortgage interest payments, and higher food and energy prices, Kiwis are struggling to keep up. These pressures, that even the RBNZ's tweaks are not addressing, compounded by a projected 5% rent increase and persistent inflation in 2025, are bleeding many households dry. This isn’t fiscal discipline; its economic sabotage, draining demand and ensuring an increase in business closures due to reduced cash flow.

 

Earlier this month, RNZ reported:

A boom in businesses going bust

New Zealand is riding its highest wave of company liquidations in more than a decade, with thousands of businesses folding and countless livelihoods caught in the crossfire.

Many more are holding on, but just.

In the first half of this year alone, 1270 businesses have shut their doors - a 12 percent increase on this time year.

It's now anticipated that the total number of liquidations for the year will surpass 2024's 10-year high, when 2500 companies folded. That was an increase of nearly 700 compared to 2023. 

Wellington economy shrinks as 177 businesses shut in a year – does Nicola Willis accept some blame?, via @nzherald https://t.co/TyMqKqrn3Y

— Jan Renwick (@nettieg3) August 26, 2025

Nicola Willis, the architect of this misery, has the gall to blame Labour while implementing austerity on the poor and pushing policies that fuel inflation. Treasury forecast inflation would be as low as 1.8% in 2025, but National’s policies have kept it at 2.7% and climbing.

National, and their coalition bedfellows, are becoming increasingly desperate, and are throwing everything they can to prop up their golden goose, the floundering housing market. Foreign buyers might make the numbers look good on paper for a while, but they'll do nothing to ensure New Zealanders quality of life improves through increased home ownership rates.

The coalitions much-touted Fast-Track Approvals Bill, now being spruiked as an economic saviour for families unable to afford basic food items, offers zero cost-of-living relief for everyday Kiwis. It’s a sop to developers, corporates and the existing supermarket duopoly, not families facing skyrocketing bills at the checkout.

Willis’ rhetoric about cleaning up Labour’s mess is pure gaslighting, obscuring the fact that her austerity is deepening the economic downturn.

The coalition of chaos is driving New Zealand into an economic abyss, while they attempt to cloak their failures in Labour-bashing and dodgy numbers. The Covid hangover is real, but it’s Willis’ heartless cuts and misguided priorities that are keeping the economy on its knees.

RBNZ Cuts OCR as Mortgage Defaults Loom

I’m unsure if you’re aware, but the New Zealand housing market is currently teetering on a knife-edge, and the Reserve Bank of New Zealand (RBNZ) knows it. With mortgage stress and arrears creeping up, compounded by sluggish sales and stagnant wages, the spectre of defaults threatens to drag house prices down. Despite the government claiming that the RBNZ’s latest Official Cash Rate (OCR) cut to 3.25% is because of their good economic management, it's really a desperate bid to keep the economy, reliant on people joining the ponzi scheme of a overinflated house prices, from tanking.

First, mortgage stress is real and growing. Back in November 2023, the RBNZ’s Financial Stability Report warned that non-performing housing loans, those over 90 days past due or impaired, would nearly double from 0.4% to 0.7% by March 2025. That’s $1.3 billion in troubled loans already. Centrix data from March 2025 confirms arrears are at their highest since 2017, with a 12% year-on-year increase in mortgage delinquencies. Borrowers who took out hefty loans in 2020-2021, often exceeding seven times their income, are spending half their gross earnings on repayments.

If these borrowers start defaulting en masse, house prices could take a hit. The logic is simple: defaults force sales, flooding the market with properties and driving prices down, which is exactly what the RBNZ and government doesn’t want to happen. CoreLogic’s December 2024 Housing Chart Pack shows house prices already fell 5% since February 2024, with listings 25% above the five-year average.

Economists like those at Squirrel predict a flat market in 2024 but warn prices could dip further in less desirable areas. A 20% peak-to-trough drop, as forecasted by Capital Economics in 2022, isn’t off the table if defaults spike. Yet, the RBNZ claims the financial system is robust, based on outdated data showing arrears still below the 1.2% seen during the 2009 GFC, as if this is a good benchmark.

On Wednesday, RNZ reported:

 

Reserve Bank drops OCR by 25 basis points to 3.25 percent

Finance Minister Nicola Willis said their economic decisions had contributed to the cut, opposed to the last Labour-led government.

"What we know for a fact is that the last government's extremely high spending levels added fuel on the inflation fire and let inflation get up over 7 percent" she said.

"We now have inflation back in band and that's partly because we've taken such a more responsible approach to spending."

She said the government's operating allowance was the lowest in a decade, which showed a prudent approach.

"Governments can make things a lot worse when it comes to inflation in interest rates, and we've taken it upon ourselves to make things better," she said.

Finance Minister Nicola Willis is trying to remain calm while scrambling to prop up the housing market. She’s also brazenly taking credit for the Reserve Bank of New Zealand’s independent decision to slash the OCR. This move, driven by the RBNZ’s concern over a potential housing bubble burst, has little to do with coalition policy and everything to do with shielding the economy from a deluge of forced sales.

Now don't get me wrong. House prices do need to come down. But the government’s not willing to let that happen in a controlled manner. Instead they're loosening planning regulations, as touted in their 2024 housing agenda, which risks inflating prices further rather than addressing affordability, with the 2025 Demographia report showing New Zealand’s housing remains among the world’s least affordable. This is only going to make things worse, with estimates showing 24,000-36,000 households were already under significant mortgage stress in 2024, with numbers likely higher in 2025 due to persistent affordability pressures and softening labor markets.

Obviously the government putting pressure on wages while prices remain overinflated, causing fewer sales, isn’t helping to get New Zealand back on track. House sales are at their lowest since 2011, down to under 60,000 annually in February 2023, per Infometrics. CoreLogic notes a 10% drop below typical seasonal sales in November 2024. Meanwhile, net migration boosts demand but also suppresses wage growth by expanding the labour pool, as ANZ pointed out in April 2025. Budget 2025 projects a 1.5% wage rise over the long term, but that’s cold comfort when households saving for or paying off mortgages are already financially stretched.

In March, RNZ reported:

Number of people behind on mortages at 8-year high

The number of people falling behind in mortgage payments has hit levels not seen since 2017, according to credit agency Centrix.

Its January credit report indicates mortgage arrears were at an eight-year high, with personal loans, buy-now-pay-later (BNPL), retail energy and telco arrears on the rise.

Consumer credit defaults also increased by 42 percent on the year earlier, while personal insolvencies showed signs of an uptick, but remained below historical levels.

The RBNZ’s OCR cuts, down from 5.5% in August 2024 to 3.25% now, are a response to this grim reality. They’re banking on lower rates (one-year fixed at 5.31%, per Canstar) to ease borrower pain and stimulate sales. But with global uncertainties like U.S. trade tariffs looming, more companies closing their doors and lower wages biting, the RBNZ’s path to a “neutral” 3% OCR by mid-2025 might not be enough to stop the slide. The housing market’s not collapsing just yet, but without real wage growth and with thousands of defaults lurking, the RBNZ and government are playing a very dangerous game.

Luxon Isn’t Focused On The Cost Of Living Crisis

When the National Party came to power in 2023, they promised to have a laser-like focus on New Zealand’s cost of living crisis. Their pledge was seductive: tax cuts, streamlined spending, and relief for the “squeezed middle.” Yet, two years into their coalition with ACT and NZ First (the coalition of chaos), and the numbers paint a grim picture. Far from easing the burden, National’s policies have exacerbated the crisis, with their handling of pay equity claims being the latest fiasco that will hit Kiwi wallets hard. Let’s dissect the coalition’s rhetoric against the cold, hard stats and expose the disconnect.

Before National took the reins, the cost of living was already biting. Stats NZ reported a 7.2% increase in household living costs for the average household from June 2022 to June 2023, driven by soaring food prices (12.3% annually) and rising housing costs. Median weekly rent hit $620, and mortgage payments devoured 49% of household income. Inflation, at a three-decade high, was punishing. Labour’s measures, like free prescriptions, half-priced public transport and small benefit increases, offered little relief, but at least they were something. 

Fast forward to 2025, and projected inflation was meant to be 2.1%, but has (accounting for Stats NZ mistake of not counting car registrations) climbed to 2.6%, mainly because of National’s economic mismanagement. 0.5% might not seem like a lot, but when you’re already strapped for cash, it can be the difference between paying the rent or ending up on the street. New Zealanders are feeling the pinch now more than ever, and we’re still awaiting the impacts of National’s latest round of socially damaging policies and Trump’s idiotic tariffs, which the coalition of chaos have simply chosen to ignore.

I'm such a fan of your work. Not only have you tamed inflation in NZ, but your incredible efforts have wrestled inflation to the ground in the US, UK. Ireland (and, well, everywhere) pic.twitter.com/vGpIBEKzUr

— Musical Chairs (@MusicalChairs14) October 16, 2024

Then there’s National’s flagship tax cuts, which were meant to put money back into people’s pockets. Instead, they’ve been a complete flop. Their 2023 plan promised $1,600 annually for a dual-income family on average wages. But with bracket creep unaddressed for most, stagnate wage growth and inflation eroding purchasing power, the real value of these cuts, which didn’t deliver anywhere near what was promised, is negligible. Worse, National scrapped Labour’s public transport subsidies, jacking up costs for low-income Kiwis.

 

A family relying on buses now faces double the fares while their incomes have barely budged. Add to that National’s restoration of interest deductibility for landlords, which has fueled housing costs and rent hikes of 9.7%. Median weekly rent hit a whopping $680 in mid 2024. No cause evictions are also back, meaning that if a landlord needs a new car or another holiday, they can simply evict tenants to find someone who can pay more. The annual evictions in New Zealand in order to increase rents are now a feature of most real estate agents schedules, and along with the government's lack of proper support, are ensuring that homelessness numbers have more than doubled in some areas.

But if that wasn't bad enough, the pay equity claims debacle is the coalition’s latest middle finger to struggling workers. Once again the government’s rhetoric of fiscal prudence has clashed spectacularly with their mishandling of public sector pay disputes. In 2024, unresolved pay equity claims for nurses and teachers resulted in strike actions. The government’s delay in settling these disputes, coupled with a welfare reform package that punishes jobseekers, has squeezed public servants and beneficiaries alike.

 

Meanwhile, their decision to axe Fair Pay Agreements has weakened workers’ bargaining power, leaving wage growth largely non-existent, particularly when you compare it against things like a 9.7% rise in food prices from 2023 to 2024. Despite these additional costs, Kiwis are still waiting for the government to do anything about the supermarket duopoly. But all we get is another worthless announcement from a worthless Minister.

National’s spin machine claims they’re taming inflation, but their policies…favouring wealthy property speculators and corporations, have only increased costs and deepened inequality. Kiwis aren’t buying the “relief is coming” line when rents, food and power bills keep climbing and climbing. The coalition’s laser focus? More like a smokescreen for austerity that is hitting the poorest hardest. It’s time to call out this charade and demand accountability for a crisis Christopher Luxon has only worsened.

National’s Betrayal of Renters and First-Time Buyers

It's definitely not a renters market in New Zealand, as reported by 1 News last night. In fact the housing crisis has metastasised into a full-blown catastrophe in 2025, and the National Party Government’s policies are pouring petrol on the flames. Renters are being crushed under skyrocketing costs, first-time buyers are locked out of the market, and the dream of homeownership is a cruel mirage for an entire generation of Kiwis.

National’s approach, slashing state house construction and implementing policies that inflate property prices, isn't just failing; it’s a deliberate middle finger to anyone who isn’t already a property owner.

In 2024, the government proudly announced a “streamlined” housing strategy, which translated to gutting funding for public housing and slowing new builds to a trickle. According to recent data, state house construction has plummeted by 40% since 2022, with only 1,200 new units completed last year, all of which were funded by the previous government. 

Meanwhile, private sector builds are stagnating, hampered by National’s deregulatory zeal, which has enriched developers but done zilch to increase supply. The result? A housing shortage so acute that Auckland’s median house price has surged to $1.4 million, and rents have spiked 12% in 18 months. For the average renter, that’s $150 more per week...money most don’t have.

National’s excuse? “Market efficiency.” They’ve doubled down on tax breaks for property investors and loosened rules for speculative developments, claiming it’ll “unlock supply.” Bollocks. These policies have turbocharged demand from cashed-up landlords and overseas buyers, while Kiwi first-time buyers (already crippled by stagnant wages and 7% mortgage rates) are left out n the cold. The government’s refusal to rein in investor tax loopholes or introduce a capital gains tax is a choice, not an oversight. It’s a choice to prioritise the wealthy over the desperate.

Then there’s the gutting of tenant protections. National’s rollback of Labour’s rental reforms, namely no-cause evictions, has left renters at the mercy of landlords who can jack up prices or kick them out on a whim. Stories abound of families forced onto the streets or into cars as rental stock dwindles. The government’s response? A shrug and a vague promise of “more consultation.” Meanwhile, their cuts to social services mean homelessness is spiking.

On Thursday, RNZ reported:

The billions spent on NZ’s accommodation supplement is failing to make rent affordable – so what will?

 

...

This study also picked up potential signs of landlords inflating the rents for tenants receiving subsidies. This is known as "subsidy capturing". On average, middle-income tenants receiving the accommodation supplement paid NZ$539.40 per week in rent in 2023. Non-recipients paid $502.90. That's a 7.3 percent difference.

Further research is needed to determine whether this discrepancy is due to rent inflation or differences in housing quality. But the finding aligns with international studies showing that subsidies can unintentionally drive up market rents.

If landlords are capturing part of the subsidy by increasing rents, then the benefit meant for vulnerable tenants is being diluted.

First-time buyers aren’t faring any better. National’s scrapping of shared equity schemes and their half-arsed “infrastructure funding” has left councils unable to support new developments. The much-hyped Fast-Track Approvals Act has delivered luxury apartments for the elite, not affordable homes for the masses. Kāinga Ora, once a beacon of hope, is now a shadow of its former self, starved of funds and ambition.

This isn’t incompetence; it’s class warfare. National’s policies are engineered to keep property prices sky-high, protecting their donor base of developers and landlords while screwing over everyone else. Renters and first-time buyers deserve better than this rigged game. It’s time for a government that builds homes, not excuses...one that puts people over profits. Until then, the housing crisis will keep burning, and National will keep fiddling like nothing's wrong.

Nicola Willis To Blame For Family Boost Debacle

Nicola Willis, National’s supposed Finance Minister, has delivered another policy failure with the Family Boost scheme, a childcare rebate that was big on promises but has been very small on delivery. Only 56,000 families have signed up, a far cry from the 130,000 Willis personally championed in National’s campaign. This isn’t just a misstep, it’s a Willis-orchestrated disaster, and she knew it was doomed from the outset.

Family Boost, a 25% rebate on early childhood education costs for families earning up to $180,000, capped at a measly $75 a week, was Willis’ brainchild. She sold it as a cost-of-living lifeline, funded by axing Labour’s “wasteful” consultant spending. Yet, economists warned her directly: the numbers didn’t add up, and the policy’s design was a mess. Willis ignored them, betting her reputation on a flashy promise to mask National’s thin policy slate. The result? A predictable flop that’s left families high and dry.

 

Yesterday, RNZ reported:

Fewer than 50 families to get National's full tax package, says CTU

Fewer than 50 families are likely to receive National's full $252 fortnightly tax break, based on the FamilyBoost scheme's lower than expected uptake, The Council of Trade Unions says.

The revelation comes as a result of figures showing just 249 families have consistently been receiving the full $75-a-week FamilyBoost rebate for ECE costs, a key plank of National's tax cuts package.

Why did it crash? Willis’ policy is a bureaucratic quagmire. Families must wrestle with IRD’s convoluted system, uploading receipts and navigating red tape National had promised to cut...time and effort most families can’t spare while working numerous jobs for not enough pay in a cost-of-living crisis. Willis blames the IRD for misjudging uptake, assuming families would flock to her scheme despite its paltry payout. The income cap, her attempt at looking inclusive, missed the mark for low-income families and barely helped the middle class. It’s Willis’ signature move: over promise and under deliver, then dodge and blame someone else...just this time she can't blame Labour.

Economists’ warnings, dismissed by Willis as naysaying, have proven spot-on. She knew the policy was shaky but pushed it to score political points, prioritising optics over outcomes. The $400 million supposedly saved from consultants was her talking point, but Family Boost’s failure exposes her true focus: tax breaks for the rich, not relief for struggling families.

Willis’ arrogance is staggering. She’s tried to scapegoat IRD for the low uptake, but this is her mess. The 74,000 families she promised to help are now collateral damage in her quest for headlines. Meanwhile, National’s broader agenda of slashing public services, rolling back environmental protections, and cozying up to corporates, is full steam ahead. Family Boost is a microcosm of Willis’ tenure: big talk, shoddy execution, and a refusal to own the fallout.

Kiwi families deserved better than Willis’ half-baked scheme. Real childcare solutions, like affordable access and systemic investment, were never on her radar. Instead, she’s left parents scrambling while she spins excuses. Willis needs to take responsibility and step down. She cannot possibly pretend to be the Minister of Finance with this type of mess on her hands.

National’s Inflation Shame: Kiwis Pay the Price

National’s handling of inflation and the cost-of-living crisis is an utter shambles and a gutless betrayal of every Kiwi scraping by. The Coalition of Chaos Ministers strut around preaching about how effective their policies are, but really all they're doing is perpetuating a cruel and sick joke of undelivered promises, leaving families crushed under obscene food and rent hikes.

The numbers scream failure, and the right wing government's excuses are wearing exceedingly thin.

We all know that inflation’s a monster, and National, despite their promises, have let it run wild. It's a stinging slap in the face to every New Zealander who believed Chris Luxon's election rhetoric. Basic necessities such as bread has gone from $2.50 to $3.20 in the blink of an eye. Milk’s flirting with $4 a litre. Lettuce at $5 a head? That’s not groceries; it’s daylight robbery. For working families, this isn’t just about “inflation"...it’s choosing which meals to skip and what bills to not pay.

Yesterday, RNZ reported:

 

Food prices rise at fastest rate in more than a year - butter up 64 percent

Annual food prices have risen at their fastest rate in more than a year, driven by dairy, meat, and some grocery prices.

Stats NZ said prices for the 12 months ended March were up 3.5 percent, the highest since January last year, following a 2.4 percent annual increase in February.

It said butter, milk, lamb, and beef had double-digit percentage rises over the past year, as did chocolate and coffee.

Milk prices increased 16 percent, while butter prices increased 64 percent in the period.

Rents are even uglier. CoreLogic reports Auckland’s median rent up 8.4% to $650 a week. Wellington’s at $620. That’s most of your paycheque for a shoebox flat, and National’s response is a spineless shrug. “Market forces,” they mumble, while the Reserve Bank jacks rates from 1.5% to 5.5% in two years. Their grand plan? Continue to lie about the stats while doing nothing but line their own pockets.

The National Party's policy void to help the poor is infuriating. Instead, Luxon rewarded his Property Investor mates with a package of interest deductibility and brightline changes, in a shameless policy reset that benefited himself by hundreds of thousands of dollars. Supply “boosted,” they incorrectly crow. Result? Rents still soar, and young first home buyers are being left out in the cold. 

The Coalition of Chaos' grocery market “reforms”? A pathetic whimper even your dog can't hear. The Commerce Commission’s been sniffing around supermarkets forever, yet prices laugh in their face. Why? Because National’s too spineless to crack down on corporate greed. They’re not governing; they’re grovelling to their corporate masters while lining their own pockets.

The human toll is heartbreaking...and Luxon simply doesn’t care. The Salvation Army reports that foodbank demand is up 20% since 2023. Kids go to school with empty stomachs to be greeted with inedible school lunches. Pensioners freeze to afford the basics. And National’s fix? Smirking photo-ops and drivel about “resilience.” Resilience? That’s code for “suck it up” New Zealand. No boost to social spending for you, no price caps on essential items...just a right wing clown show obsessed with pointless headlines about pronouns while many Kiwis lose hope.

Sure, inflation’s a global problem...supply chains, wars, whatever. But National’s job was to fight for our survival, not fling their hands up like a bunch of useless quitters. They’ve failed spectacularly, and the proof’s in every grocery receipt, every rent increase and every stat since they took office. Food and rent aren’t just costs...they’re the line between dignity and desperation. National’s crossed it, and they’ve dragged us with them. Enough with the excuses…we deserve a government with a heart, and at the moment National hasn’t even got a pulse.