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.

Majority of Voters Think Budget 2025 is Terrible

The latest Talbot Mills Research poll has dropped a bombshell on the National-led coalition’s Budget 2025, and it’s not pretty. According to the NZ Herald, only 22% of Kiwis think this budget is good for New Zealand, while 33% reckon it’s outright bad. On a personal level, it’s even grimmer, only 9% believe it’ll benefit them, with 34% saying it’ll make things worse. 

David Talbot, the poll’s director, didn’t mince words: this is the worst budget reception in nearly 30 years of tracking. For a government that campaigned on economic competence, this is a slap in the face from voters who are clearly unimpressed with Nicola Willis’ fiscal fanfare.

On Saturday, the NZ Herald reported:

Budget 2025 tests poorly with voters, according to Talbot Mills Research poll.

The Government’s recent Budget has tested poorly with voters, according to the results of a new Talbot Mills Research poll.

Asked whether they thought the Budget delivered on May 22 will be good for New Zealand overall, bad, or would not make much of a difference, 33% said it would be bad and just 22% thought it would be good.

“We’ve been measuring New Zealanders’ reception of government budgets for nearly 30 years. This is the worst we’ve ever recorded,” said David Talbot, director of Talbot Mills Research.

“Across all three dimensions: overall, economic, and personal, it was judged by Kiwis to be net negative, and in each case the worst since our tracking began in 1996.”

Participants were also asked whether they thought the Budget would be good for the New Zealand economy, bad or would not make much of a difference.

The results showed 30% believed it would be bad for the economy and 27% thought it would be good. In terms of whether they thought the Budget would be good for them personally, bad or make not much of a difference, 34% of respondents said it would be bad and just 9% thought it would be good.

Nicola Willis called Budget 2025 “responsible,” claiming it’s steering New Zealand toward recovery. The people polled, representing a majority of New Zealanders, say otherwise. With 30% of respondents saying it’s bad for the economy and only 27% seeing it as a positive, the coalition’s big plan, centred on tax breaks for businesses and slashing public spending, is nothing more than a corporate handout dressed up as progress. The $6.6 billion “Investment Boost” for businesses, allowing a 20% immediate tax deduction on new assets, might thrill the boardrooms, but it’s left ordinary Kiwis cold.

The gutting of KiwiSaver contributions, now halved to about $260 annually, is another kick in the teeth for workers trying to save for their future. Willis’ claim that this will somehow help first-home buyers is laughable when employers are expected to offset higher contributions with lower wage increases. So much for “making New Zealanders better off.”

The coalition’s obsession with austerity and tax cuts for the wealthy reeks of trickle-down economics, a tired playbook that’s failed time and again. Meanwhile, means-testing Best Start and projecting a measly $200 million surplus by 2029 (using their cherry-picked Obegalx measure) shows a government more interested in micro-management and balancing books than addressing the cost-of-living crisis hammering households.

The poll’s damning verdict reflects a public that’s not buying the spin. With 78% of Kiwis in other Talbot Mills polls saying economic conditions are “poor” or “not so good,” it’s clear the coalition’s priorities are misaligned with what the country requires.

This budget’s failure isn’t just a policy misstep; it’s a political disaster for Christopher Luxon’s government. The coalition’s rhetoric of “strong fiscal management” is crumbling under the weight of public discontent. Talbot Mills’ data suggests a deeper malaise, voters aren’t just skeptical; they’re angry. If Luxon and Willis think they can coast to 2026 on corporate tax breaks and road cone hotlines, they’re in for a rude awakening.

The left must seize this moment. Labour, the Greens, and Te Pāti Māori need to hammer home the coalition’s disconnect, offering a vision that puts people over profits. Budget 2025’s polling debacle is a clear signal: Kiwis want a government that fights for them, not one that leaves more Kiwi families further behind.

Ruth Richardson Gets Damehood for Wrecking New Zealand

In a move that’s left many gobsmacked, Ruth Richardson, the architect of the infamous “Mother of All Budgets,” has been named a Dame Companion of the New Zealand Order of Merit in the 2025 King’s Birthday Honours. The Honours Unit, Cabinet and the King must have rocks in their heads.

 

This accolade, meant to celebrate service to Aotearoa, feels like a slap in the face to the countless New Zealanders who bore the brunt of her ruthless economic reforms. Far from deserving a Damehood, Richardson’s legacy is one of deepened inequality, shredded social safety nets, and a callous disregard for the vulnerable.

As Finance Minister from 1990 to 1993, Richardson championed the neoliberal blitz known as “Ruthanasia.” Her 1991 budget slashed welfare benefits, privatised state assets, and deregulated markets with a zeal that made even some of her National Party colleagues wince. The fallout was immediate and brutal. Child poverty rates skyrocketed, with a 1996 study showing that the proportion of children living below the poverty line doubled from 14% in 1982 to 29% by 1994, as a direct consequence of her austerity.

 

Unemployment surged to 11.1% in 1992, the highest since the Great Depression, as her policies gutted public sector jobs and left thousands struggling. Income inequality widened dramatically, with Richardson helping to ensure that New Zealand is one of the most unequal nations in the world to this very day.


Today, RNZ reported:

Two former finance ministers receive King's Birthday Honours

Former National MP Ruth Richardson. Photo: Supplied

Two former finance ministers have been appointed Companions of the New Zealand Order of Merit at this year's King's Birthday Honours.

Ruth Richardson and Steven Joyce, both former National MPs, have been honoured for their services as Members of Parliament.

Three other former MPs - Ian McKelvie, Anae Arthur Anae, and Dover Samuels - have also received Honours.

'Early and decisive course correction was imperative' - Richardson

Richardson was well aware that an interview about her King's Birthday Honour would include questions on her time as finance minister.

The economic reforms she oversaw - and the 1991 'Mother of All Budgets' - made significant changes to social welfare and public services, the effects of which are still felt by many.

Richardson started by saying in 1991 New Zealand was at huge risk, and was drowning in a sea of debt and perpetual forecast deficits.

It’s true. When Ruth Richardson became Finance Minister in 1990, New Zealand faced a fiscal crisis, with public debt at 48% of GDP and deficits projected to persist. The National Party’s earlier policies under Robert Muldoon (1975–1984), particularly the debt-fueled “Think Big” projects, increased debt from 5% to 40% of GDP, exacerbating the crisis. Inefficient state enterprises and Minister's high spending further strained finances, setting the stage for Richardson's decision to make the poor pay for her parties financial failures.

Richardson’s defenders, including herself, claim her 1991 'Mother of All Budgets' and Fiscal Responsibility Act 1994 set a global standard for fiscal prudence. But at what cost? Her policies prioritised trying to balance budgets over human welfare, forcing austerity that crippled health and education services. Hospital waiting lists ballooned, and schools struggled as funding dried up.

 

New Zealand's social fabric tore apart, homelessness spiked, and food banks became a grim fixture in communities. Her reforms didn’t just trim fat; they cut into the bone of a society already reeling from Roger Douglas’ earlier experiments. But what makes this all the worse is that she’s never acknowledged the harm she caused.

Impact on Health Services and Hospital Waiting Lists

The 1991 budget introduced user-pays requirements in hospitals, shifting costs to patients for services previously funded by the government. This was part of a broader restructuring that reduced public spending on health.

A 2015 review noted that Richardson’s reforms caused “severe financial strains on hospitals,” leading to operational challenges. Hospital waiting lists grew significantly in the early 1990s, with a 1993 study reporting a 20% increase in elective surgery wait times from 1990 to 1992, attributed to reduced funding and increased demand on under-resourced facilities.

By 1994, some hospitals reported waitlists exceeding 12 months for non-urgent procedures, a stark contrast to pre-1991 levels. The introduction of user charges also deterred low-income patients from seeking care, exacerbating health inequities, as documented in a 1996 Health Services Research report. These outcomes align with claims that austerity “crippled health services” and caused hospital waiting lists to balloon.

Impact on Education and School Funding

Education funding faced similar cuts, with schools required to adopt user-pays models, such as increased parental contributions for basic services. The budget reduced per-pupil funding by approximately 5% in real terms between 1991 and 1993, according to Ministry of Education data. Schools in low-income areas struggled most, as they relied heavily on government grants.

A 1994 report from the New Zealand Educational Institute highlighted that many schools deferred maintenance, cut staff, or reduced programs, leading to larger class sizes and reduced educational quality. These struggles support the claim that schools faced significant challenges as funding “dried up” under austerity.

Social Impact, Increased Homelessness, and Food Banks

The budget’s deep welfare cuts, unemployment benefits reduced by $14 weekly, sickness benefits by $27.04, and family benefits by $25–$27, severely impacted low-income households. A 2015 Treasury report noted that welfare-reliant households saw their income drop from 72% to 58% of the national average between 1990 and 1993. Child poverty doubled from 15% in 1990 to 29% in 1994, and income inequality rose, with the Gini coefficient increasing from 0.30 to 0.33 by 1996. These economic pressures tore at the “social fabric,” as communities faced increased hardship.

Homelessness surged as housing support was cut amid rising costs. A 2017 European Journal of Public Health study noted that austerity policies in the early 1990s, including New Zealand’s, increased homelessness risks by reducing subsidies and social services. By 1993, estimates suggested a 30% rise in visible homelessness in urban centers like Auckland, with no comprehensive national data due to under-reporting. Food banks, virtually non-existent before the 1980s, became entrenched, with the Salvation Army reporting a 50% increase in food parcel distribution between 1991 and 1994.

I guess it's entirely appropriate that Ruth is being honoured today. After all, we are in the middle of another permanent scarring of the economy for stupid ideological reasons. Let's have a quick look [🧵1/n] pic.twitter.com/SyKff5JBxL

— Musical Chairs (@MusicalChairs14) June 1, 2025

Awarding Ruth Richardson a Damehood whitewashes her terrible legacy. It’s a tone-deaf endorsement of policies that prioritised corporate interests over people, leaving a generation, those who survived, scarred for life. The honours system is meant to uplift those who’ve served the nation, not those who’ve divided it and made it poorer. Richardson’s recent support for the controversial Treaty Principles Bill, which again undermines Te Tiriti, only underscores her disconnect from New Zealand's shared values.

This isn’t about rewriting history…it’s about accountability. Honouring Richardson glorifies a chapter of financial pain and increased inequity for New Zealand. If we’re to celebrate true service, let’s recognise those who’ve rebuilt what her policies broke, not the architect of the wrecking ball. Shame on the honours committee for this misjudgment, and shame on Ruth Richardson for believing that she deserves this Damehood. All she really deserves is our scorn.

NZ Must Help Pacific Nations Repay Debt to China

The Pacific is our backyard, and it’s under pressure. Tonga, a proud Polynesian nation, is drowning in debt to China, with over USD $120 million, roughly a quarter of its GDP, tied up in loans from Beijing’s EXIM Bank. This debt, stemming from post-2006 riot rebuilding and projects like the Tungi Colonnade, is strangling Tonga’s budget, forcing it to prioritise repayments over health and education. Australia and New Zealand, as Pacific heavyweights, have a moral and strategic duty to step in, help Tonga repay this debt, fund sustainable infrastructure, and curb China’s growing soft power in our region.


On Wednesday, RNZ reported:

 

Lowy report finds Pacific nations 'grappling with a tidal wave of debt repayments' to China

New research shows that China has emerged as the world's largest creditor for developing nations, which are due to pay back at least $54 billion to Beijing this year.

Australian foreign policy think tank the Lowy Institute has crunched data from the World Bank and found some of the world's poorest countries are now facing "record high debt payments" to China.

China rapidly boosted investments in infrastructure last decade, funding railways, ports and roads across the developing world under its sprawling Belt and Road Initiative - projects which have often been welcomed by governments across Latin America, Africa, Central Asia and South-East Asia.

But the lending has also placed pressure on government balance sheets around the world.

 

Tonga’s debt crisis is a microcosm of China’s loan strategy across the Pacific. Since 2006, China has lent USD $1.3 billion to nations like Vanuatu and Samoa, often for flashy infrastructure projects with questionable economic returns. In Tonga, repayments eat up 3.5% of GDP annually, diverting funds from critical services. The 2022 volcanic eruption, which wrecked 36% of Tonga’s economy, only deepened this vulnerability. Meanwhile, China’s refusal to forgive these loans, despite Tonga’s pleas in 2013, 2018, and 2020, raises red flags about Beijing’s intentions. Is this “bilateral friendship” or debt-trap diplomacy to secure influence in a geopolitically sensitive region?

 

In April, RNZ reported:

China defends Tonga loans amid rising debt concerns: A call for fair representation

China's embassy in Tonga has taken to Facebook to defend its loans to the Kingdom, following fresh media coverage and concerns about the country's rising debt.

The Facebook post, shared on 24 April, says China gave the loans to help Tonga during a difficult time.

"Recently, there were news reports on the loans provided by China to Tonga many years ago," the post says.

"China offered concessional loans to Tonga based on the principles of bilateral friendship and equal cooperation.

Australia and New Zealand can break the debt cycle. Australia’s AUD $45 million budget support in 2022/23 gave Tonga breathing room, while New Zealand’s NZD $4 million grants and post-disaster aid show what’s possible. Together, they could provide targeted grants or low-interest loans to clear Tonga, and other Pacific nation's Chinese debt, freeing up fiscal space for them to build the schools and hospitals they require, plus increase their climate resilience.

Beyond debt relief, both nations should fund infrastructure that meet needs without any strings attached. Unlike China’s opaque loans, Aussie and Kiwi aid is transparent, grant-based, and aligned with Pacific values of community and sovereignty.

This isn’t just charity; it’s strategy. China’s loans come with soft power perks, UN votes, potential military access, and leverage over Pacific leaders. By stepping up, Australia and New Zealand can reinforce the Pacific as a region of democratic resilience, not a pawn in Beijing’s game. The next Pacific Islands Forum, to be held in September 2025 in Honiara, Solomon Islands, offers a platform to coordinate a repayment plan to help Pacific nations escape their crippling debts. But let’s be clear: our aid budgets are dwarfed by China’s deep pockets. Australia and New Zealand must prioritise smart, sustainable investments over token gestures. They must get Pacific leaders onboard with a debt reduction plan that will work.

Critics might argue this risks escalating tensions with China, which ignores the problems the current debts cause. But let’s stop pointing fingers. Tonga turned to China when we were slow to act post-2006. But that’s exactly why we must act now, not with arrogance but with partnership, respecting the agency of Pacific nations. If we don’t, we risk losing our political influence in the Pacific to Beijing’s chequebook.

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.

UPDATED: Health Crisis Looms as Budget 2025 Cuts Billions

The National-led government’s 2025 Budget has been underwhelming to say the least. But it’s an especially grim read for anyone who values a functioning public health system. Despite the glossy spin from Health Minister Simeon Brown, the numbers don’t lie: New Zealand’s health sector is being short-changed. The much-touted $1.783 billion in new health spending sounds impressive until you scratch the surface and realise it’s barely enough to keep the lights on, let alone deliver the world-class care New Zealanders deserve. Once again, National’s obsession with fiscal restraint is strangling our hospitals, General Practitioners, and other frontline health workers.


Last week, the NZCTU reported:

Billions missing from health budget

“We have examined the spending decisions and announcements of the Minister of Health over the past few months. These demonstrate a pattern of making a new service promise but not providing any new funding for that new service,” said NZCTU Economist Craig Renney.

“That means the commitments have to be paid out of the existing budget, which is already under huge pressure. These sneaky cuts add up to $1.2bn across 4 years.

“At Budget 2024 the government provided $1.370bn for cost pressures. This has been calculated by the Treasury as simply covering the cost of existing services. The $1.2bn of new spending are all new services on top. If they come from the ‘cost pressure’ payment above, that acts as a direct cut to existing health services.

“Assuming the Treasury cost pressure costs are right, health needs $1.713bn just to stand still at Budget 2025 in direct new funding – and likely a figure closer to $2bn once the unknown costs are added.

Let’s break down the funding shortfalls even further. Budget 2025 boasts a 4.8% increase in Vote Health, bringing the total to $31.052 billion. Sounds decent, right? Wrong! When you factor in inflation and population growth (driven by immigration and an ageing demographic), the real per capita health funding is declining by around 1% each year over the forecast period.

 

Health NZ’s cost pressure uplift of 6.2% might outpace CPI inflation, but it’s nowhere near enough to cover the actual costs of delivering services in a country where demand is skyrocketing. The NZCTU estimates a shortfall of $1.2 to $2 billion just to maintain existing services, let alone address the backlog from COVID-19 or workforce shortages.

Despite these obvious funding shortfalls, Simeon Brown has gone on the attack:

Ginny Andersen tried rewriting history on ZB this morning, claiming there was no new health funding in the Budget. We already know Labour is economically illiterate, but for Ginny to think Kiwis are too is an insult. 🧵

— Simeon Brown (@SimeonBrownMP) May 27, 2025

 

National’s track record on health funding is a masterclass in deceptive cost-cutting. During their 2008–2017 tenure, per capita health funding eroded as they consistently failed to match inflation and immigration-driven demand, resulting in a real per capita spending drop of around 3%. The fallout was brutal: overworked nurses, understaffed hospitals, and patients languishing on wait lists for months. Fast forward to 2025, and National’s back at it, dressing up a bare-bones budget as “record investment” while frontline services buckle under the pressure.

The kicker? National’s priorities are wildly out of touch. While they’ve funnelled $164 million into after-hours care, a move Labour’s Ayesha Verrall rightly calls a drop in the bucket, they’ve slashed $381 million from digital health infrastructure and $35 million from Primary Care teams. Along with the Te Aka Whai Ora (Māori Health Authority) cuts in Budget 2024 of over NZ$100 million, these represent significant cuts to frontline services that are not being replaced. Instead of investing in training doctors and Nurses or modernising systems, they’re pouring billions into tax cuts for the wealthy and subsidies for tech giants and landlords. It’s a slap in the face to health workers and patients alike.

National’s failure to invest in the sevices that are required while claiming there's “no lolly scramble” in Budget 2025 is laughable when you see where the money’s actually going. Health NZ is still $1.1 billion in the red, and this budget does nothing to plug that gap.

Today, RNZ reported:

 

 

Government's health boost less than claimed, expert says

However, Auckland University health policy Professor Tim Tenbensel said, according to his calculations, the $31 billion allocated for health in the Budget was only 3.6 percent more than what was actually spent last year.

"So, we're pretty much treading water at best, or rather sinking a little, in this budget," Prof Tenbensel said.

Furthermore, operational funding last year only increased about 1.2 percent in real terms.

…

The trick was to keep adding on the previous year's increase as "new money", ignoring the fact that it would have been eaten up by inflation.

"It's a very creative ploy that one, so I think we need to see it for what it is," he said.

"All governments do this sort of thing, but in the scheme of things, this one is pretty brazen."

 

Kiwis deserve better than this neoliberal penny-pinching. National’s refusal to properly fund health isn’t just a budget failure...it’s a betrayal of every New Zealander waiting for a hospital bed or a specialist appointment. If they keep robbing Peter to pay Paul, our health system won’t just stagnate; it’ll collapse. Time to call it what it is: a deliberate choice to prioritise profits over people.

Committee to Challenge The Coalition’s Pay Equity Debacle

By ramming through divisive pay equity reforms under urgency without a whisper of public consultation, the National-led Coalition of Chaos has exposed its contempt for democratic process. The coalition’s pattern of bypassing scrutiny, seen also in their “Kiwi Killing Bill” and Regulatory Standards Bill shenanigans, reveals a government allergic to accountability. This isn’t governance; it’s arrogance personified. But thankfully, former National MP Dame Marilyn Waring has stepped up, assembling a “People’s Select Committee” to do what this government refused: hear the voices of New Zealanders on the gutting of pay equity laws. This move is a bold rebuke to a coalition that has little concern for democratic fairness.

Waring, a trailblazing feminist economist and former MP who once stared down Robert Muldoon’s authoritarian tendencies, is no stranger to fighting entrenched power. Her committee, comprising a cross-section of seasoned ex-MPs like Nanaia Mahuta, Sue Bradford, and Jo Hayes, brings over a century of parliamentary experience to scrutinise the coalition’s hasty changes to the Equal Pay Act. These reforms, spearheaded by ACT’s Brooke van Velden, extinguished 33 existing pay equity claims and raised the threshold for female-dominated professions, making it harder for women to seek fair pay. Passed under urgency, the changes dodged select committee scrutiny, leaving workers, mostly women in undervalued sectors, silenced. As Waring pointedly asks, “Where was the evidence?”

Didnt you get the memo ⁦@NicolaWillisMP⁩.
I saw you falling over your words to say it wasnt needed to balance the budget but little Snapchat davey says otherwise. Looks like brooke van velden has single-handedly saved your budget. You must be eternally grateful to her. pic.twitter.com/fd3giKdQPF

— Catherine (@MrsMacNZ) May 7, 2025

The coalition’s justification? Van Velden claims the reforms make the system “simpler and more robust,” but without a regulatory impact statement or public input, this smells like a cost-cutting exercise dressed up as policy. The $13 billion reportedly saved smells more like wage theft than fiscal prudence, especially when Finance Minister Nicola Willis’s budget required these savings just to balance the books. This is the Coalition of Chaos at its worst, promising tax cuts for the wealthy and handouts to landlords while slashing equity for low-paid women, effectively sacrificing decades of progress for short-term political wins.

Waring’s initiative isn’t just grassroots resistance. Her committee, backed by the PSA and CTU, will hold public hearings starting August 11, 2025, in Wellington, with Zoom sessions to ensure nationwide access. They’re inviting submissions until July 31, giving voice to the 33 claimant groups and others sidelined by the coalition’s “constitutional vandalism,” as PSA’s Fleur Fitzsimons aptly calls it. This isn’t just about gathering evidence; it’s about exposing the coalition’s disregard for democratic processes which are the foundation of a functioning democracy.

As the Coalition of Chaos barrels forward, trampling democratic norms with reckless abandon, Marilyn Waring’s People’s Select Committee stands as a beacon of hope and defiance. Her fight isn’t just for pay equity...it’s for the soul of New Zealand’s democracy, a reminder that power unchecked is power abused. With only 42.5% of women backing this government, as per the April 2025 Roy Morgan Poll, the coalition’s mandate is shaky at best. Waring’s hearings, amplifying the silenced voices of low-paid women, are a rallying cry for every Kiwi who values fairness over expediency. Let this be the moment we reclaim our democracy, proving that when the powerful turn their backs on the people, the people will rise up, louder and stronger than ever before.

Cutting Budgets Won’t Fix New Zealand’s Economy

Finance Minister Nicola Willis has sold New Zealand a shiny austerity package, wrapped in promises of fiscal prudence and surplus dreams. Her latest move, a $1.1 billion budget cut for 2025, which has been spun as the tough medicine needed to cure our economic woes. But let’s cut through the spin: this isn’t a cure; it’s a poison pill. Willis’ austerity obsession is dragging New Zealand deeper into recession, and the evidence is stacking up like unpaid bills. Treasury’s downgraded GDP growth forecasts and a $6 billion borrowing hike expose the cracks in her strategy, while her government’s mismanagement, like the Kiwirail ferry debacle, makes you wonder if the coalition of chaos even has a calculator at all?

Willis’ budget cuts, announced in April 2025, slashed the operating allowance from $2.4 billion to $1.3 billion, one of the tightest budgets in a decade. She claims this will deliver a surplus by 2029, despite Treasury warning that global trade turmoil, particularly Trump’s tariffs, will slow growth. Treasury’s Half Year Economic and Fiscal Update (HYEFU) in December 2024 already painted a grim picture: a deeper recession than expected, with nominal GDP $19.8 billion lower over the forecast period, leading to $13 billion less in tax revenue. Net core Crown debt is now projected to hit $234 billion by 2029, a whopping 46% of GDP. Willis’ response? Hack away at public spending while borrowing even more. So much for fiscal restraint.

Economic analyses shows that austerity is a wrecking ball for growth. The Kaka points out that Willis’ cuts risk an “austerity doom loop,” where reduced government spending chokes demand, stalls private sector recovery, and deepens the downturn. IMF research supports this: a 1% GDP increase in public investment boosts output by 0.2% in the same year and 1.2% over four years. Yet Willis prioritises cuts over investments in productivity, education, or infrastructure...sectors that could lift New Zealand out of its economic slump.

Contrast this with past governments. During the Global Financial Crisis, National under John Key invested in infrastructure to cushion the blow. The COVID-19 response saw Labour borrow heavily to fund wage subsidies, keeping businesses afloat. Willis, however, seems to think austerity is a one-size-fits-all fix, ignoring how it amplifies unemployment (forecast to peak at 5.4% in 2025) and stifles recovery. Her cuts target “non-essential” spending, but as Bernard Hickey at the Kaka warns, defunding public services to failure often leads to privatisation, shifting even more costs onto ordinary Kiwis.

Then there’s the Kiwirail ferry debacle, an example of the coalition government overreacting without a proper replacement plan. The Interislander ferry project, meant to modernise transport infrastructure, spiraled into an additional $1.5 billion mess under Willis’ watch. The government scrapped plans for new ferries, opting for a cheaper, smaller version, leaving taxpayers to foot the bill for delays and cancellations. Mountain Tūī called it a “fiscal own-goal,” highlighting how Willis’ penny-pinching undermined a critical economic lifeline. If this is her idea of competence, we’re in for a very bumpy ride.

Willis’ austerity myth assumes cutting budgets magically balances the books, but it’s a gamble that’s backfiring. The Conversation correctly argues that New Zealand needs productivity-focused investments, not a “rush towards austerity” that risks our long-term prosperity. It's questionable whether the $6.6 billion business tax incentive will spark any growth, but it’s dwarfed by $21.4 billion in cuts, including $12.8 billion from pay equity reforms, a move that most economists have slammed as short-sighted. Meanwhile, her refusal to transparently detail these cuts and the Kiwisaver mistake fuels even more distrust in her ability to manage the books.

Kiwis deserve better than Willis’ austerity experiment. The economy isn’t a spreadsheet to be trimmed into submission; it’s people, businesses, and communities needing support to thrive. Readers, it’s time to demand transparency on where these cuts hit hardest and why. If Willis wants to play fiscal hero, she needs to show her work...not just wave a red pen and hope for applause. Write to your MP, question their priorities, and let’s hold this government accountable before austerity and it's economic aftermath puts us in a debt cycle that we may never escape from.

Nobody Cares About Nicola Willis’ Stupid Blue Dress

The New Zealand mainstream media and National Party MPs are trying to whip up a storm over Finance Minister Nicola Willis’ choice of a blue dress for Budget Day 2025. Apparently, it’s a scandal because it’s from a UK designer, not a Kiwi one. Cue the outrage from a single fashion industry figure and a bizarre parade of male National MPs posting “fit checks” on social media to “support” Willis' dress choice.

But let’s be real, nobody actually cares about Willis' eyesore of a wardrobe. This is another manufactured controversy, a classic right-wing sleight of hand to distract from the real issues: an austerity budget that’s gutting public services and increasing hardship for already struggling New Zealanders.

Today, the ODT reported:

'Belongs in the 1950s': Willis bites back over Budget Day dress barb

Willis delivered last week's Budget in a blue dress, believed to be the Nouvelle Sculpt Stretch Crepe Dress, from British womenswear label The Fold London, according to The New Zealand Herald.

Caroline Marr, owner of Auckland-based fashion brand The Carpenter's Daughter, told the Herald that Willis' decision not to wear a Kiwi brand during the high-profile moment was a signal of "total disrespect" to the local fashion industry.

"We have wonderful designers here, Jacinda [Ardern] got it right by wearing NZ-made as much as possible. Our leaders should also be doing that. Be proud of your nation and what we make here."

The 2025 Budget, dressed up as a “growth” plan, is anything but. Willis has slashed $1.1 billion in new spending, citing Trump’s tariffs and a slowing economy. Meanwhile, the government’s axing $12.8 billion from pay equity settlements, hitting women in low-paid, female-dominated sectors like care work the hardest. These aren’t just numbers, they’re livelihoods. The budget also halves KiwiSaver contributions, tightens welfare for 18 and 19-year-olds, which will leave many families struggling. This isn’t “fiscal discipline”; it’s austerity that punishes the vulnerable while funnelling $6.6 billion in tax breaks to businesses and landlords.

And let’s talk about the racist undertones. The budget scraps Māori and Pasifika initiatives, part of nearly 4000 public sector jobs and 240 programs cut. These weren’t “wasteful” project, they were targeted support for communities already facing systemic inequities. Labour’s Barbara Edmonds called it a budget that “leaves women out,” but it’s also a budget that sidelines Māori and Pasifika, deepening disparities under the guise of “responsibility.” The Greens’ Marama Davidson nailed it: this government is “happy to be cruel and mean” to those already struggling.

But here's what senior government ministers are concerned with:

Focusing on what our Minister of Finance is wearing instead of the outstanding Growth Budget she’s just delivered? Be better. pic.twitter.com/0PMgZa4e8F

— Christopher Bishop (@cjsbishop) May 24, 2025

Talk about tedious!

So why the dress drama, which has been doing the rounds in right-wing echo-chambers for days now? It’s a deliberate distraction. The Herald’s article and right-wing MPs like Chris Bishop and David Seymour hyping it on social media are trying to shift focus from the budget’s failures. This is about burying the pay equity scandal and the budget’s harsh cuts. Instead of debating real issues, like how austerity has historically tanked economies (look at Greece or the UK) or how these cuts will drive even more Kiwis overseas, they’re obsessing over someones opinion about a $1100 blue dress. It’s pathetic!

Willis herself said there are “far more interesting things to talk about” than her clothes. She’s right, but not for the reasons she thinks. We should be talking about a budget that prioritises corporate tax breaks over people, that ignores climate change, and that kicks marginalised communities when they’re down. The dress? It’s just a distraction to keep us from noticing the mess this government’s creating with their socially destructive policies.

While Caroline Marr correctly calls Willis’ wardrobe choice “disrespectful” to local designers, the real scandal is Budget 2025’s $1.1 billion in spending cuts, $12.8 billion slashed from pay equity, and the gutting of Māori and Pasifika initiatives. These austerity measures hit the vulnerable hardest, yet the government wants us debating fashion choices instead of their cruel policies. It’s a pathetic distraction from a budget that prioritises tax breaks for the wealthy over everyday Kiwis.

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.

National’s 20% "Investment Boost" Won’t Work

The National Party’s one and only budget bribe, dressed up as the “Investment Boost,” is a shameless vote-buying scheme aimed squarely at business owners. With their new policy allowing a 20% tax deduction on new equipment purchases, National is tossing out lollies to a select few while ignoring the broader economic mess they've created and the desperate need for social investment elsewhere.

 

According to National’s own glossy spin, their 20% deductibility scheme is supposed to ignite a firestorm of investment and supercharge productivity. But let’s be real…this is a flimsy Band-Aid on the gaping wound inflicted by Trump’s reckless tariffs, which are set to hammer our economy like a sledgehammer. Economic modelling from AUT’s Niven Winchester paints a grim picture: an initial $900 million gut-punch to New Zealand’s $9 billion U.S. export market, with our meat and dairy sectors being hit hardest.

Treasury and Inland Revenue estimate National's “Investment Boost", which doesn't address Trump's tariff's at all, will only increase GDP by 1% over 20 years, with half those gains in the first five. But there's a problem: the cost. National’s track record of tax cuts and business handouts for the wealthy suggests this could easily run into the billions, over the forecast period. There's also the issue of lower export earnings and the tax incentive costing an average of $1.7 billion per year in reduced tax revenue. So where exactly is the government going to find the shortfall?

The so-called “Investment Boost" is money siphoned from public coffers into private hands that could be rebuilding our crumbling health system, funding education, or tackling the housing crisis, all of which is already putting downward pressure on our economy. Instead, National’s prioritising shiny new toys for the wealthy over things like reducing the number of kids in poverty, with it's exponential costs further down the line. They're leaving our hospitals to crumble, with workers such as nurses and doctors stretched to breaking point.

Child poverty’s economic toll dwarfs any benefit from National’s tax lolly scramble. A 2024 analysis by economist Craig Renney estimates child poverty costs New Zealand $17.7 billion annually (4.27% of GDP) through lower productivity, higher welfare, and increased health and crime costs. That’s $5.1 billion in lost tax revenue yearly, enough to triple the Investment Boost and still fund our schools and hospitals. With 156,000 children in material hardship in 2023, up from 120,000 in 2022, National’s focus on the short term with business handouts over social investment is indefensible!

However, this isn’t just about skewed priorities; it’s about effectiveness. The economy’s stalled, with sluggish GDP growth and high inflation choking New Zealand since 2023. Consumers aren’t spending, and businesses, from tradies to manufacturers, are feeling the pinch. Will a 20% tax break on shiny new equipment really convince a struggling business owner hit by Trump's tariffs to splash out when demand’s flatlining? National’s banking on a trickle-down fantasy, hoping businesses will invest, hire, and pay more. But in a recessionary climate, most will simply hold tight, and not expand. The real winners? Big corporates with cash to burn on equipment, not the small-time tradie or farmer battling falling revenue, soaring rates and high interest costs.

When National took power in late 2023, they inherited an economy already under strain, but their policies have only deepened the rot. GDP growth has tanked, with a measly 0.6% quarterly rise in Q4 2024 after a 1.0% contraction in Q3. The economy shrank by 0.5% overall in 2024…hardly the “rebuilding” National had promised. Unemployment has climbed from 3.4% in Q4 2022 to 4.6% in June 2024, with projections of a peak of 5.4% in 2025. Company liquidations are up 19.3% in 2023/24, with over 2,100 businesses folding. Meanwhile, net debt has ballooned from 38.45% of GDP in 2023 under Labour to 42.6% in March 2025 under National, with forecasts of further increases. National’s response? Slash public services and throw tax breaks at the wealthy, leaving ordinary Kiwis to bear the brunt of a stagnating economy where trickle down economics has never worked.

Will their “Investment Boost" incentivise spending? No! Not when you facture in other headwinds. It probably won't even buy votes. Business owners might be tempted by the immediate tax relief, but they’re not daft. They know a stalled economy means fewer customers and less revenue, no matter how many tax breaks National dangles. Farmers and tradies, battered by global trade disruptions and local costs, might see through this as a flashy distraction from National’s failure to address the big picture. If the economy’s not working for all Kiwis, no amount of lollies or new toys for the rich will mask the bitter taste of National’s economic mismanagement.

Budget 2025: Nicola Willis Delivers More Austerity

The National-led government’s 2025 Budget, unveiled today by Finance Minister Nicola Willis, dressed up as a “Growth Budget” is gambling with our future and delivering nothing but austerity for the vast majority of New Zealanders.

Willis promised a disciplined, growth-oriented plan, but the numbers tell a grim story of cuts, broken promises, higher debt, and a shaky economic foundation that’s more about political posturing than the prosperity she promised.

Today, the ODT reported:

 

Govt books to return to surplus after three years

Treasury forecast this year's deficit, using the newly introduced calculation excluding ACC costs, to the end of June would be $10.2 billion, about $2.7 billion lower than forecasted.

The deficit will peak in the coming year at $12.1 billion, nearly $2 billion more than the December forecast, with the 2027 forecast nearly double the previous forecast at $8.1 billion.

There’s a lot to dislike in Nicola Willis' austerity budget, but lets start with the low hanging fruit. Budget 2025 slashes the operating allowance to a measly $1.3 billion, down from $2.4 billion, a move Willis touts as being fiscally responsible. But this isn’t prudence…it’s a deliberate starvation of public services that will impact the poor and elderly the most. Treasury estimates $2.5 billion is needed just to maintain existing services, meaning Willis’ numbers fall woefully short, which will force departments to gut frontline programs. Health, education, and justice face the chopping block, with “reprioritisations” siphoning billions to fund tax breaks for the wealthy.

The Budget has used close to $13 billion from the now-revamped pay equity scheme.

Slashing $12.8 billion from pay equity settlements disproportionately impacts women in low-paid sectors like care work. It’s an incredibly short-sighted move that will have negative economic consequences well-into the future. How exactly is the government going to encourage more care workers to train or stay in New Zealand at a time when our ageing population is putting high demand on the sector? You certainly cannot work yourself into home ownership In New Zealand on those wages. National’s claim of “economic growth” is laughable when Nicola Willis’ austerity obsession has led to the biggest cuts to government investment in a generation.

REVEALED!

Pay equity betrayal cost New Zealand women over $12 billion dollars!

Wage theft from New Zealand women from a Government that was elected to fix cost of living crisis. #shame

— Fleur Fitzsimons (@FleurFitzsimons) May 22, 2025

The pay equity rollback is the Budget’s ugliest stain. Willis’ claim that the previous Labour government’s pay equity regime was a “blank cheque” is a convenient fiction to justify slashing future settlements. This isn’t fiscal discipline; it’s a calculated attack on 180,000 workers, mostly women, who were finally clawing their way toward fair pay and a liveable wage. This budget is a desperate scramble to plug even more holes from Willis’ $10 billion in tax cuts and $2.9 billion for landlords, funded by $12 billion in additional borrowing she swore she’d never do. Her resignation promise? Conveniently forgotten.

Then there’s the KiwiSaver tinkering that’s going to hurt everyday hard working New Zealanders. National halving government contributions again and hiking default rates to 3.5% then 4% means less money in people’s back pockets. How stupid is this when the working poor are already drawing down their retirement savings because the cost-of-living crisis is causing hardship? Willis spins the Kiwisaver changes as boosting retirement savings, but it’s a cruel joke when employers are expected to offset 80% of the cost by suppressing wages. Everybody knows that we must fix our low-waged economy to keep our best and brightest people here. But National is acting like the mass exodus happening under their watch doesn’t matter.

Actually hilarious how they're spinning cutting the govt contribution to kiwisaver but increasing the amounts coming from our own pay checks as a massive win for workers

— Tīmoti (@komerata) May 22, 2025

The $2.5 billion saved from gutting Kiwisaver, alongside the $1 billion from emergency housing cuts, gets funnelled into flashy line items like $6.4 billion in business tax breaks. Growth? Treasury estimates a pathetic 1% GDP lift over 20 years, not enough to offset the downward pressure National has already inflicted on the economy by laying off thousands of workers and cancelling hundreds of infrastructure projects. Another tax break for business owners who are already doing well just so the economy can keep stagnating isn’t good economic management…and it’s certainly not the economic rocket fuel that Willis promised.

The National Party’s numbers don’t add up, and the economic backdrop exposes Nicola Willis’ dangerous gamble. Global uncertainty, driven mainly by Trump’s tariffs, has Treasury revising growth forecasts downward, with GDP expected to contract by 0.8% this year alone. Despite the economy needing some real growth incentives, Willis doubles down on austerity, ignoring warnings from numerous economists that cuts to services could further impact an already stalled recovery. So where are the surpluses she promised? Instead we’re going to have larger and extended deficits because of National’s economic mismanagement. Nobody is spending money, record numbers of businesses are closing and the government’s tax take is already reduced by $3 billion per year.

 

Willis said she was proud to get deficits lower and reduce debt levels.

 

Willis is obviously talking complete BS. In fact it's perhaps the dumbest consequence of the National coalitions economic mismanagement…that being New Zealand’s debt to GDP will continue to grow. The National-led government’s Budget 2025, with its $12 billion in borrowing, will push the core Crown debt-to-GDP ratio to a precarious 46% by 2028. Despite Finance Minister Nicola Willis’ claims of fiscal discipline, the budget’s reliance on borrowing to fund tax cuts and business incentives, coupled with a weaker economic outlook due National’s mismanagement and global uncertainties, will delay fiscal surpluses to at least 2029, keeping debt dangerously elevated. And that’s before we even factor in some credit ratings downgrades.

18 year olds today have just been robbed of $60,000 for their retirement.

That’s based on removing $260 a year with average of 6% annual return.

National have previously.
- axed the $1000 kickstart
- removed $521 a year in govt contributions
- taxed employer contributions

— Richard Hills (@RichardHills_) May 22, 2025

Nicola Willis means-testing for 18 and 19-year-olds unfairly penalises young people, restricting access to benefits based on parental income. This punitive measure treats them as children and ignores their independence, exacerbating inequality for young adults who are estranged from their parents, which will stifle opportunities for vulnerable youth just starting out. Along with the high cost of living, this artificial age of independence will also discourage young people from leaving the nest, further hindering a major step in a young persons life. Many will have to continue living in precarious situations, or undertake questionable employment, which is yet another sign that the coalition of chaos views young people with disdain.

Then there’s the $18 million cut to Radio New Zealand’s funding over four years, averaging $4.6 million annually, which can only be viewed as retaliation for RNZ’s factual and unbiased reporting that has exposed many questionable and outright corrupt government practices. This pattern of paybacks will have a chilling effect on independent journalism and is designed to ensure the fourth estate tows the line.

When Winston Peters threatened to cut RNZ funding in April 2025, it was because Corin Dann on Morning Report dared to question the senile fool about the NZ First's bigoted member’s bill seeking to define what a woman is. Peters took issue with Dann’s entirely respectful line of questioning, which included him repeating opposition arguments against the bill from Labour and the Greens. The dictator incorrectly accused RNZ of bias and “running the line of political opponents" and has now made good on his threats, ushering in a terrible day for our so-called democracy.

But this isn't just a vendetta budget...it's an all debt and nothing but deficits budget as well...a shuffle the deck chairs budget. By prioritising corporate handouts and relying on political optics as cover instead of doing the right thing for workers, families, and the vulnerable, the coalition of chaos is setting New Zealand back decades. Willis’ “responsible” Budget is a house of cards, built on broken promises and shaky numbers, leaving New Zealanders to pick up the pieces. Nobody voted for this type of austerity…and nobody should vote for a National-led government ever again.