Nicola Willis's Debt Already Tracking Higher Than All 6 Years of Ardern Government
Current & planned debt will surpass Labour's full term debt in less years. Willis also admitted Budget 2024 had a higher deficit than all of Grant Robertson's bar Covid.
Related article: Tracking to 25% more debt
In September 2023, Nicola Willis and Grant Robertson joined Q&A to discuss finances and budgets.
Many economists had cast doubt on National’s ability to fund their tax cuts.
One conservative economist, Michael Reddell, rubbished the foreign buyers’ tax numbers, as well as National’s economic management reputation:
“The numbers aren't credible…. They haven't produced the modelling - and it's not clear why….
"It goes … to people's sense of 'are these people as capable potential economic managers, and managers of our government, as they'd like us to believe?"
In the same month, Luxon assured Kiwis of their economic credentials:
“I'm really confident that we know what we're doing…and we can deliver this.”
And Willis did her best to convince New Zealand too:
Nicola Willis shows her revenue modelling on Q&A, insisting it is credible and independently verified (Sep 2023)
Jack Tame asks of Willis’s modelling, “Is this it?” (Sep 2023)
The foreign buyers’ tax was scuttled during the Coalition Agreement process, but it was just one of many aspects in National’s tax plan that didn’t add up from Day 1.
The evidence became clear when the government borrowed $12bn of new money to pay for their tax cuts, as reported on The Kākā.
Putting aside the myth that government debt is always a bad thing, the fact that Nicola Willis’s incurred debt will be higher in less time, than 6 years of the Ardern Labour government combined, is another extraordinary feat of hypocrisy - and indeed, in context, incompetence.
[Edit: I’ve updated this to make my writing clearer. She has spent $25bn to this budget and plans another $72bn. Without pay equity they would have been at ~$110bn in ~5 years. Labour was at $88bn in 6 years)
Labour navigated NZ through a black swan global pandemic where tens of millions died and debt levels rose around the world in concert1 as governments sought to prevent a global depression.
Global inflation levels2 also rose, pushed by supply side constraints, industry profiteering , and demand induced, behavioural surges.
Debt levels rise in concert post Covid
Inflation spikes across major economies during & post Covid
It’s a pretty extraordinary thing to hear the party that continually lambasted Labour’s “record” debt and “irresponsible spending party” - all while ignoring Covid, the significant lives saved3, as well as positive economic Treasury forecasts as at November 20234 - as supposed evidence of financial mismanagement, whip out their own so sneakily.
Incomparably worse when you consider what Willis’s budget debt is being used for.
It’s not for infrastructure, growth, productivity, social services, natural disasters, saving lives or preserving the economy during crises.
No, they’ve cut a net $45m in this year’s budget alone in critical science and research.5 and made ~$300m total cuts across business, science and innovation programmes.6
It’s to do things like:
Give $16m worth of rebates to private schools because we all know how hard done by for-profit, private schools are.
Pay $400mn more to imprison Kiwis at a cost of $1.7bn a year - a plan laid out last year when Luxon and Goldsmith effectively said when it comes to prisons, there are no financial constraints
It’s to account for $216m of tobacco industry tax cuts, mostly benefiting Philip Morris - an extraordinary factor in and of itself when you consider how this govt repealed a $46bn beneficial smoke free law, and is now further rewarding an industry responsible for 1 in 5 Kiwi deaths a year.7
It’s also to provide uncapped, unlimited subsidies to businesses8 - including foreign companies. As Newsroom’s Jonathan Milne notes: this can be anything, no limit - utes, oil rigs, earthquake remediation, new boats, skyscrapers, whatever the business wants
The sky is the limit for the latter, and although Willis claimed on the weekend it would benefit NZ, the fact there is no business case, or conditions to assure any of that at all.
This means we could very much see the case of overseas oil and gas operators use it - leaving NZ with $500mn to $1bn in clean up and debtor costs, while siphoning nearly hundreds of millions of profits overseas. We know this because it happens.9
And they come back again - after they get away.
We could see small businesses buy new utes to enjoy with a 20% tax deduction — a kind of anti-EV rebate, because we know how much the Taxpayers Union and National admire utes, while despising electric vehicles.
Their pro-ute stance was effective BTW —
This government has also substantively pulled away from social services, failed to produce any meaningful mental health plans - experts predict further declines in mental health10, forced food banks around the country to close, are making DOC beg for donations to do its critical work, led to a 53% rise in homelessness in Auckland corresponding to its cuts to emergency housing….
The list is honestly endless…
And I haven’t even mentioned the cuts to climate funding. A 50% cut to climate finance, barely even bothering to cut emissions between 2030 and 2035, and taking a scalpel to foreign aid for our Pacific partners by cutting climate aid by $100mn.
Last year in August, just before Thomas Coughlan predicted a viable “rockstar economy” I wrote: “Why more economic and social pain is coming for us all”
The upshot was clear - by implementing its austerity drive towards public services, social services, and workers, this government was cutting its revenue11, and increasing its expenses12 - all while doing nothing to increase productivity and investment.
It’s hard to imagine the level of economic incompetence this government is displaying.
More bizarre when we realise they are reportedly relying on Atlas Network’s NZ Initiative for economic tips - but also completely makes sense once we summarise their entire approach is trickle down economics - a once upon a time fairy tale introduced by Margaret Thatcher and Ronald Reagan, the darlings of early iterations of the Atlas junk tanks.13
I welcome Willis and the National Party to come back to reality at some point, but I won’t be holding my breath either.
EXTRAS
Related Articles:
‘It was a bombshell’: Govt culls pest eradication company (Newsroom)
Budget 2025: None of year's child poverty targets met (RNZ) as Willis tells Jack Tame “We didn’t campaign on making that positive change for low income families.”
Videos
Nicola Willis Reluctantly Admits The Truth On Debt
Cartoons
Covid-19 induced increase in government debt-GDP ratio for G20 countries, would amount to 14.9% points on average, which is more than 141% higher than the increase of 6.2% points resulting from the 2008 global economic and financial crisis. Source: Impact of Covid-19 on Global Debt: A Study of Countries in the G-20 Group
NZ comparator shown here
20,000 plus lives saved- New Zealand Medical Journal
Last year, it was already clear that Nicola Willis had borrowed more than any of Grant Robertson’s budgets, bar Covid. This year, they are surpassing their records, including Covid.
New Zealand Association of Scientists statement on Budget 2025 “This is exactly what scientists feared would happen and it is unsurprising, but still beyond disappointing to see it play out in Budget 2025. The Government talks about science as a cornerstone for economic growth, but it is unwilling to put its money where its mouth is. This Budget will see more science jobs lost and more researchers leave the field or indeed the country. We will never achieve economic prosperity based on research without a government willing to invest in the foundations – researchers, research, and infrastructure – that support the overseas economies which succeed through science and innovation.”
Callaghan Innovation will be defunded from 30 June 2025
According to the Ministry of Health, smoking causes 3 x as many deaths as all non-medical causes combined.. Let’s also close our eyes for a moment and ignore how Philip Morris intentionally leveraged Atlas Network’s NZ Initiative and Taxpayers Union to lean on corruptible parties like NZ First - and succeeded.
Currently budgeted at $6.6.bn
A law which Labour put in to stop that happening ago has been reversed by Shane Jones
20% of Kiwis live with a mental health condition. The Royal Australian and New Zealand College of Psychiatrists (RANZCP) noted after Budget 2025: “Halfway through its term, the Government still has no clear plan to fix a struggling mental health system and today’s Budget delivers more patchwork than progress.”
Mass culling of public services staff, govt contracts, and contributing to over 12,000 job losses in construction - one of NZ’s major economic sectors
Antagonising citizens, ignoring climate change, imprisoning more Kiwis, reducing mental health support, pulling police away from mental health calls without a backup, culling preventative health, making the poor poorer etc. On the standalone factor of causing the unemployment market to tank, now at a 5 year high, jobseeker benefits themselves have predictably shot up.
A later iteration of Thatcher, UK PM Liz Truss also tried to resuscitate this dumb ideology, to spectacular effect
I’m handing this one over to Professor Rod McNaughton who states, “Switzerland sets the gold standard, consistently topping the ranking for the past 13 years. With a GDP almost three times larger than New Zealand’s, despite having a population only 1.5 times larger, Switzerland exemplifies the economic potential of a robust innovation ecosystem. If New Zealand matched Switzerland’s GDP per capita, it would mean an additional $178 billion to our economy.” As Sean Connery in his role as Jimmy Malone in ‘The Untouchables’ said, “Here endeth the lesson.”
Luxon, Willis, stop the Bullshit austerity, fund what needs funding, and get on with transforming New Zealand’s economy. You don’t achieve that by doubling down on a business model (commodity trading) that is failing, you achieve that with innovation and acknowledging that doing the same thing and expecting a different result is f**king stupid, insanity even.
And while you’re at it, innovate banking, food retailing, building supplies, energy provision, and any other oligopoly or government policy-advantaged businesses you can ferret out of the economy.
"The upshot was clear - by implementing its austerity drive towards public services, social services. "..the government is ruthlessly and systematically removing faithful public servants from their jobs and replacing them with cronies