It was a day of highs and lows for Finance Minister Nicola Willis, starting with the lows.
In the morning, we were learning that she and the PM have been ranked among the least impressive Cabinet ministers in the latest Mood of the Boardroom survey.
PoO readers will have spotted that – in an earlier post today, sourced from Kiwiblog – the rankings were –
14. Nicola Willis (Finance) 3.09/5
15. Simon Watts (Energy) 3.00/5
16. Christopher Luxon (Prime Minister) 2.96/5
Education and Immigration Minister Erica Stanford topped the ranking, followed by Foreign Minister Winston Peters in second place. Chris Bishop, Todd McClay, and Mark Mitchell rounded out the top five.
Reporting on the rankings, interest.co.nz said:
Kiwi business leaders say the National-led government lacks a clear economic narrative, has been too slow to deliver reforms, and has failed to draw on private sector expertise.
But it had different rankings:
The annual Mood of the Boardroom survey ranked Finance Minister Nicola Willis and Prime Minister Christopher Luxon as the 12th and 14th “most impressive” ministers out of the 20 currently in Cabinet.
The explanation: interest.co.nz has restated this ranking to include only Cabinet ministers.
Bouncing back from this boardroom rebuff, Willis this afternoon announced Dr Anna Breman as the new Governor of the Reserve Bank.
Breman will be the first woman to hold the role, and will start her five-year term on December 1.
But ahead of the announcement, Taxpayers’ Union spokesman James Ross said there was just one word for timing the announcement of a new RBNZ Governor to take coverage away from the Treasury’s Long-Term Fiscal Statement:
“Cynical.”
Ross noted that Willis says she wants the public to have a serious conversation about the long-term challenges facing New Zealand.
“So why try to bury bad news?
“Rather than pulling strings to keep the Government’s dire finances off the front pages, all of Nicola Willis’ focus should be on balancing the books.”
This statement from the Taxpayers Union alerted PoO to the report from the Treasury, which provides a 40-year outlook on New Zealand’s fiscal future.
The Treasury prepares this outlook every four years to provide a longer-term perspective on the sustainability of the government’s fiscal position given long-term trends, such as population ageing and climate change.
Not surprisingly, the report finds New Zealand’s current policies are not sustainable for the long term.
Our modelling projects what would happen if spending and revenue policies were left unchanged until 2065.
With unchanged policy, by 2065 government spending per person would nearly double – from $18,300 today to $35,900 (inflation adjusted). Government revenue would rise much more slowly. These trends would result in government debt rising to around 200% of gross domestic product (GDP).
The report emphasises that this projection of current policies is not the Treasury’s prediction.
The Treasury expects that policy actions will be taken to alleviate fiscal pressures. The real questions are when those changes will be made, and what they will be.
That’s the challenge for Willis – or for whoever the PM deems able to grapple with it.
And if his team fails with that mission, voters are bound to toss out the Luxon team and give a Labour-led team a go.
The Finance portfolio most likely would then be in the hands of Barbara Edmonds, in whom the respondents to the Boardroom Survey have more confidence – she ranked 10th with a score of 3.20 out of 5.
Public debt, of course, is among the issues that must be tackled.
The report says:
… government debt is higher today than most Statements projected.
This is partly because government responses to adverse events have become larger over time, averaging 10% of GDP per decade. There has not been sufficient saving between events to keep debt steady over time.
Over the past 20 years, fiscal policy choices have not always addressed longer term challenges. Core Crown tax revenue as a share of GDP has been lower than projected in earlier Statements, and government spending as a share of GDP has increased outside of health and superannuation.
This combination has contributed to higher debt.
New Zealand is currently running a significant structural fiscal deficit, meaning that even without future pressures arising from population ageing, climate change and other long-term factors, adjustment is required to bring expenditure and revenue into balance.
The projections assume the fiscal deficit closes over the next few years, reflecting the 2025 Budget Update.
Failure to achieve that consolidation in the short term would make it more difficult to manage longer-term fiscal pressures.
Population ageing is among the fiscal pressures expected to accelerate in coming decades.
This will increase the cost of providing retirement income.
Most New Zealanders aged over 65 receive a pension paid out of general taxation, known as New Zealand Superannuation or NZS.
The number of New Zealanders receiving NZS is rising faster than the number of New Zealanders aged 15–64, the age bracket that pays the most tax revenue.
In the 1960s there were seven New Zealanders aged 15–64 for every Kiwi aged over 65. Now there are four, and in 2065 there are projected be two.
As the age structure of the population changes, the cost of maintaining NZS in its current form will rise. NZS expenditure was 3.9% of GDP in 2006, is 5.1% now, and if current policies are maintained is expected to grow to around 8% of GDP by 2065.
Healthcare costs are also rising relative to GDP.
The bulk of New Zealanders’ healthcare is provided publicly, paid for out of general taxation. Because we tend to pay most of our tax in midlife but use the most healthcare later in life, the changing age structure of our population, combined with the rising cost of providing healthcare, would see health expenditure rise from 7.1% of GDP now to around 10% in 2065 if policies were left unchanged.
And so on…
It’s not pretty reading.
We are by no means surprised to find Willis has banged out a press statement about her Reserve Bank appointment but none about the Treasury’s sobering projections and their implications for her Finance and Growth portfolios.
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
15. Simon Watts (Energy) 3.00/5
16. Christopher Luxon (Prime Minister) 2.96/5
Education and Immigration Minister Erica Stanford topped the ranking, followed by Foreign Minister Winston Peters in second place. Chris Bishop, Todd McClay, and Mark Mitchell rounded out the top five.
Reporting on the rankings, interest.co.nz said:
Kiwi business leaders say the National-led government lacks a clear economic narrative, has been too slow to deliver reforms, and has failed to draw on private sector expertise.
But it had different rankings:
The annual Mood of the Boardroom survey ranked Finance Minister Nicola Willis and Prime Minister Christopher Luxon as the 12th and 14th “most impressive” ministers out of the 20 currently in Cabinet.
The explanation: interest.co.nz has restated this ranking to include only Cabinet ministers.
Bouncing back from this boardroom rebuff, Willis this afternoon announced Dr Anna Breman as the new Governor of the Reserve Bank.
Breman will be the first woman to hold the role, and will start her five-year term on December 1.
But ahead of the announcement, Taxpayers’ Union spokesman James Ross said there was just one word for timing the announcement of a new RBNZ Governor to take coverage away from the Treasury’s Long-Term Fiscal Statement:
“Cynical.”
Ross noted that Willis says she wants the public to have a serious conversation about the long-term challenges facing New Zealand.
“So why try to bury bad news?
“Rather than pulling strings to keep the Government’s dire finances off the front pages, all of Nicola Willis’ focus should be on balancing the books.”
This statement from the Taxpayers Union alerted PoO to the report from the Treasury, which provides a 40-year outlook on New Zealand’s fiscal future.
The Treasury prepares this outlook every four years to provide a longer-term perspective on the sustainability of the government’s fiscal position given long-term trends, such as population ageing and climate change.
Not surprisingly, the report finds New Zealand’s current policies are not sustainable for the long term.
Our modelling projects what would happen if spending and revenue policies were left unchanged until 2065.
With unchanged policy, by 2065 government spending per person would nearly double – from $18,300 today to $35,900 (inflation adjusted). Government revenue would rise much more slowly. These trends would result in government debt rising to around 200% of gross domestic product (GDP).
The report emphasises that this projection of current policies is not the Treasury’s prediction.
The Treasury expects that policy actions will be taken to alleviate fiscal pressures. The real questions are when those changes will be made, and what they will be.
That’s the challenge for Willis – or for whoever the PM deems able to grapple with it.
And if his team fails with that mission, voters are bound to toss out the Luxon team and give a Labour-led team a go.
The Finance portfolio most likely would then be in the hands of Barbara Edmonds, in whom the respondents to the Boardroom Survey have more confidence – she ranked 10th with a score of 3.20 out of 5.
Public debt, of course, is among the issues that must be tackled.
The report says:
… government debt is higher today than most Statements projected.
This is partly because government responses to adverse events have become larger over time, averaging 10% of GDP per decade. There has not been sufficient saving between events to keep debt steady over time.
Over the past 20 years, fiscal policy choices have not always addressed longer term challenges. Core Crown tax revenue as a share of GDP has been lower than projected in earlier Statements, and government spending as a share of GDP has increased outside of health and superannuation.
This combination has contributed to higher debt.
New Zealand is currently running a significant structural fiscal deficit, meaning that even without future pressures arising from population ageing, climate change and other long-term factors, adjustment is required to bring expenditure and revenue into balance.
The projections assume the fiscal deficit closes over the next few years, reflecting the 2025 Budget Update.
Failure to achieve that consolidation in the short term would make it more difficult to manage longer-term fiscal pressures.
Population ageing is among the fiscal pressures expected to accelerate in coming decades.
This will increase the cost of providing retirement income.
Most New Zealanders aged over 65 receive a pension paid out of general taxation, known as New Zealand Superannuation or NZS.
The number of New Zealanders receiving NZS is rising faster than the number of New Zealanders aged 15–64, the age bracket that pays the most tax revenue.
In the 1960s there were seven New Zealanders aged 15–64 for every Kiwi aged over 65. Now there are four, and in 2065 there are projected be two.
As the age structure of the population changes, the cost of maintaining NZS in its current form will rise. NZS expenditure was 3.9% of GDP in 2006, is 5.1% now, and if current policies are maintained is expected to grow to around 8% of GDP by 2065.
Healthcare costs are also rising relative to GDP.
The bulk of New Zealanders’ healthcare is provided publicly, paid for out of general taxation. Because we tend to pay most of our tax in midlife but use the most healthcare later in life, the changing age structure of our population, combined with the rising cost of providing healthcare, would see health expenditure rise from 7.1% of GDP now to around 10% in 2065 if policies were left unchanged.
And so on…
It’s not pretty reading.
We are by no means surprised to find Willis has banged out a press statement about her Reserve Bank appointment but none about the Treasury’s sobering projections and their implications for her Finance and Growth portfolios.
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
6 comments:
Willis is so eerily similar to the mysteriously wealthy Ardern, one has to wonder whether Willis is seeking H Clarks counsel, like Ardern did..
Willis suspicious support of the supermarkets, who according to Stuff are charging the average kiwi family $10,000 a year more than Aussies are charged, is causing much suffering in our communities.
It's nice to see others finally waking up to NZs need for a capable finance minister. Let's hope Luxon does before it's too late.
If our new finance minister starts by getting Aldi or Lidl to jump the Tasman, National will fulfill Luxons promise to bring grocery prices down and will romp in at the next election.
They say you can’t beat Wellington on a good day. Well you can’t beat stuff journalism for political spin any day. To wit:
After the Mood of the Boardroom survey ranked Hipkins and his shadow cabinet in the bottom quarter with under 2% approval, Stuff’s Explainer Editor spins Labour’s inertia as brilliance. Reality disagrees.
Lloyd Burr’s latest “explainer” reads like political fantasy. Deserts, droughts, seeds, green shoots — metaphors replace analysis.
Context matters: the Mood of the Boardroom survey ranks Hipkins and his shadow cabinet in the bottom quarter, under 2% approval. Burr’s timing suggests a defensive spin: Labour is weak, so let’s dress it as strategy.
Burr’s credibility collapses on one line:
“He (Hipkins) has defined a woman as a biological female.”
Hipkins didn’t, and he hasn’t. In April 2024, when ACT pushed Health NZ to use “woman” instead of euphemisms like “people with a cervix,” Hipkins criticised the move. ACT responded with a press release highlighting that ordinary women felt erased and dehumanised.
Somehow Burr flips this reality.
Readers can draw their own conclusions why burr chose to do this.
Fiction masquerading as opinion doesn’t stop there.
There’s the Starmer comparison. Burr likens Hipkins to the UK Labour leader who inherited 14 years of Conservative chaos, suggesting a colourless personality could somehow deliver a win. Absurd. Hipkins has nine months of a Coalition Government and no comparable groundswell.
Lazy analogy, misleading framing.
Labour’s policy vacuum? Strategy. Centrist soundbites? Principle. Anonymous quotes? Illusion of insight. Burr presents dodges as decisiveness and inertia as brilliance.
Balance for the record: Hipkins has taken some moderate stances appealing to centrists, and Labour remains an Opposition party positioning ahead of the next election.
That minor detail does nothing to rescue Burrs assertions.
In Burr’s world, deserts bloom, droughts are strategy, and dodges are decisive acts.
In reality, facts still matter — readers deserve them, not a tale that explains less than it claims.
Maybe the economic woes and resulting poll ratings also stem from the lack of achievement of this govt. in the non economic areas of everyday life. I'm sure there are many people who voted National expected that the govt. they voted into power in 2023 would get rid of the WOKE policies that Ardern introduced into local and national govt., all levels of education, health, environment, M.S.M., planning, the way that judges seem to think they have to power to make and interpret law, including Tikanga, instead of just apply it. Then there's the way that Luxon seems to be scared shirtless of doing anything that might upset Maori. The Waitangi Tribunal seems to be as strong as ever, and if not stronger, certainly more vocal. I can well see that all of these non-actions lead to a general feeling that N.Z. has not yet turned a corner and is not yet on the way up. There is also a fear that Labour/Greens/The Maori Party may well be the next govt. and that are only bad times ahead. People are battening down their hatches and not spending, so the economy is not improving.
Totally agree Allen.
Why has this government with Luxon as head not disembowelled the he puapua document that was put together by fewer than 10 people for Ardern to then jam down the throats of 75 percent of the population.
If Luxon had only done that and nothing else, he, and the country , would not be standing on the precipice of extinction.
Ahhh the inevitable race card comment.
Haven't the greens, tpm, Labour and potentially ACT spin doctors seen the surveys which show most kiwi battlers dont give a stuff about their racist rhetoric.
Especially since Luxon shut down the Labour hierarchy: Maori Kings family, and Waiparera Trust, tax money laundering schemes.
So questioning the existence of he puapua report is ‘ playing the race card?’
Let’s discuss: it is about process, not people.
Fact: The He Puapua working group had nine hand-picked members. One was Waimirirangi Ormsby — Mahuta’s niece-in-law, appointed as the rangatahi rep. Her claimed credentials were never put under real public scrutiny, despite her youth and close family connection. Two others, Tamati Olsen and Kayla Kingdon-Bebb, are married to each other. Every member came from the same small world of Māori law, policy and activism.
There was no nationwide public consultation and even some Māori groups say they weren’t meaningfully included.
Pointing out that a tiny, closely connected group wrote a blueprint for constitutional change that Ardern actioned without a democratic mandate is a criticism of transparency and governance — not an attack on any race.
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