The level of Public Service cuts looming in the next Budget were enough for Reserve Bank Governor Adrian Orr and a swathe of public servants to resign, but the enormity of what Free Market NZ Initiative acolyte Nicola Willis wants to do hasn’t been leaked to the public yet.
The truth is the Economy is stalling just as National amputate public spending.
Bernard Hickey is scathing…
The economic recovery is stalling
The economy is not doing what it was supposed to when PM Christopher Luxonsaid in January it was ‘going for growth.’
That’s clear in the BusinessNZ BNZ PSI survey results1 for March published yesterday, which showed a second month of contraction in the services sector, the biggest part of the economy. The companion PMI survey of manufacturers in March was published on Friday and showed only a tepid expansion, at a slower rate than the previous month.
There was also a surprise 0.8% fall2 in retail sales via electronic cards in March. (See charts of the day below.)
REINZ reported this morning that house sales fell a seasonally adjusted 0.3% to 7,640 in March from February nationwide, while sales volumes in Auckland fell a seasonally-adjusted 12.7% to 2.362. Seasonally adjusted prices fell 0.3% in March from February, Infometrics estimated, with prices were lower than a year ago for the eighth consecutive month.
A pro-cyclical fiscal tightening
Meanwhile, the Government is pushing on with its ever-tighter fiscal policy in the face of recessionary headwinds globally and locally, effectively enacting a pro-cyclical (ie worsening a recession) policy in conflict with the Reserve Bank, which has been conservative in its initial decision under a makeshift Governor.
RNZ reported from leaked documents yesterday the Government was considering shutting a $118 million per year education training programme that is well liked by schools and was set up with great fanfare in 2014 by the previous Government. Finance Minister Nicola Willis signalled last week the Government would double down on spending cuts to achieve a budget surplus by 2027/28.
That was in the face of Treasury has advice that Trump’s tariffs will slow global GDP growth and increase inflation, making it harder to achieve that surplus and therefore forcing even bigger cuts within Willis’ $2.4 billion per year operating allowances, most of which have already been spent in the 2025/26 year.
…Treasury is warning the Government…
Revealed: Tight Budgets force ‘reductions to public services’ – Treasury
Treasury officials have warned the Government that “significant reforms” or “reductions to public services” will be needed in the not-too-distant future if it sticks to its current, restricted spending track.
The Herald can reveal that even with this relatively tight spending, the Government will not post a surplus under the traditional Obegal measure until 2031, which will mark the longest period of Government deficits since the 1979-1994 deficits (which were measured quite differently).
Treasury officials also warned that the Government had planned so much capital investment – spending on items like schools, hospitals and roads – that it might have to cut spending earmarked for public services so it can fund the significant ongoing maintenance of those investments.
…and the IMF are begging us to tax more…
Tax reforms needed to bolster economic growth – IMF report
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- International Monetary Fund report urges action on finances, growth, housing
- Annual report expects NZ economy to grow 1.4 percent this year, 2.7 percent in 2026
- Structural reforms needed to tackle deficits, urges tax reforms
- Time to start serious talk on long term superannuation costs
…the impact of what National need to cut to afford their tax cuts and landlord loopholes isn’t clear to the public yet.
Once it is, all hell will break loose.
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It’ll be fine. We’re sorted. We’ll just keep selling oil, gas, coal and other commodities. Oh…hang on…we don’t do those. Only other countries do those.
“Murderous” is no hyperbole given what this pack of vandals have done so far…from Tobacco, firearms, returning Pseudo Ephedrine, defunding NGOs including food banks, downgrading school meals, choking minimum wage rises, underfunding public health, attacking all things Māori, to union busting. These measures combined, incrementally make peoples lives worse and affect their mental and physical well being.
Some peoples’ lives worse – but not National, NZF, and Act voters though.
No Ada be ause remember they’re rich and sorted, just a lot richer under your lot. Landlords are much better off of course.
Heh, nothing to see here then…
the funny old thing is some aspirational poor people vote Tory and Act as well-and revenge voters.
The challenge is to engage the alienated non voters, which TPM is doing a good job on.
yes no doubt they are slipping you more under the table which wont cost much because there are not many of you whom think they are soooo special.
Our economy’s stalling because our farmers are fucked so there’s no longer a free-money tit to suckle on. Dairying was the last tit to drag on but now that trump’s up-ended Chiaaeeena we’re going to get hit hard until the last 90 years of our raw economy’s investigated then rebooted. AO/NZ courts should ask the police to restrict travel for our multi-billionaires and the multi-millionaires, the ones with a $50 million net each base line figure and seize the assets of the four once were but now australian owned banks, asb, anz, bnz and westpac, pending a full-disclosure investigation into how they’ve become the second most profitable banks in the world, second only to Canada.
When this is headlining, you know shit just got real.
The parasites are wriggling so they must be worried.
rnz
Home loan rates drop further
https://www.rnz.co.nz/news/business/558314/home-loan-rates-drop-further
rnz
Why 4.5% home loan rate could be on cards after US tariffs
https://www.rnz.co.nz/news/business/557581/why-4-point-5-percent-home-loan-rate-could-be-on-cards-after-us-tariffs
Rubbish, all National are doing is cutting down on the huge increase of public servants from 2017-2023, the numbers were increases so much by Labour that all the public servants that have been let go, by this government, STILL does not tally up to the amount of newly employed in the last 6-8mths of the Labour govt.
(And of course, the tens of thousands added by Labour did NOT equate to better stats results/outcomes for them, funny that eh?)
Regardless, each one of those public sector workers spends their income in the private sector. Reducing the size of the public sector will have a contractionary impact on the economy and will lead to additional job cuts in the private sector. Unemployment will rise and tax revenue will fall. Private sector investment will also contract as a weakening economy is not attractive.
Maintaining high levels of employment through the public sector leads to better economic outcomes overall.
You are right some people dont have a grasp of what makes the economy tick .Remember the old saying YOU HAVE TO SPEND MONEY TO MAKE MONEY .If 200k people are not earning they are not spending or paying much tax are they .
Complete nonsense again by Im not righty.
National and it’s budget is about austerity for its donors.
Willis and her corrupt right couldn’t care less how ordinary kiwis are impacted by her outrageous cuts because like Luxon, she’s sorted, wealthy and nothing she’s doing in the budget will affect her and the top 10 percent of income earners.
Idiots like Im not right are so entrenched in themselves they have little interest in the social ills of others. That is why it’s best to ignore such pathetic posts by Im not righty.
Just look at the damage in health as an example of Nationals governance and incompetence, sacked ministers and commissioners proves just how well health was run under Labour and their recognition that as the population has increased, staff numbers were required to increase. This was necessary and the sheer lunacy of thinking there were too many public servants and were only seen as waste is simply unintelligent. Funny how only now, National with such an appalling record in health, all quarters of health are having to fight back against such an abhorrent Government.
yep increase the population by 20% and lower the number of public servants does not work to well as even RFK has jus found out when he had to reemploy thousands he sacked a few weeks ago in a knee jerk moment
Unlike you @ IR I stick to the facts. Not, the oily mouse-squeaks of logical fallacy political double speak brain-farted out of a neofascist minion.
Fact one.
Labour. It isn’t that. Not since roger killed Labour off by infecting that old Labour with the disease that’s neoliberalism and that was forty years ago and all because we had cash money in our public assets and now thanks to right wing fascist neoliberalism we don’t. We instead have private individuals and their companies rorting the fuck out of us to use what were once our assets and services.
George Monbiot. The Guardian.
British-centric but same-same.
https://www.theguardian.com/commentisfree/2025/mar/28/fascism-britain-neoliberalism-opened-door-for-it-labour
Fact two.
I do truly want you to please now go fuck yourself.
I don’t think it’s fair to equate NZ Labour with UK Labour. Through comparing the last NZ Labour government with the current UK Labour government it is clear the current UK Labour government, for whatever reason (be it ideology or political triangulation), is far apart from the previous NZ Labour government in terms of policy.
BS merchant
Yes a turd polisher which is a top job in the coalition of chaos
Privatise the New Zealand economy and society further until ordinary non rich kiwis feel they’re living in an occupied land by the wealthy and foreign wealth leeching corporations. What a great future! National Socialism without fascism is our future. Stop the money grubbing parasites.
Yes. Absolutely. It should also be remembered that we are the budget. Not the embarrassing little blue things above. They’re just overpaid middle management with enough sociopathic arrogance to try to convince us that it is they who are important when in fact they’re not so lets get rid of the fuckers. They’re fucking dangerous to us all. I mean, they were lobbied by graeme hart for Christs sake. He paid $700,000 for them so they would give him and his ilk unimpeded access to our working lives. Fuck that! We can do one of two things here. We can vote the bastards back in then tell them straight what to do, NOT what they like.
OR. We could request an urgent and public royal commission of inquiry up the natzo’s and their MMP minions like a Blacksmiths finger looking for a lumpy prostate.
I say both.
High tax kills economy’s. This has been proven over and over and over.
We need get rid of some regulation, lower taxes, and increase productivity.
Grown the whole pie so everyone gets some.
So your solution is to tax cut our way into complete poverty and become a vassal state run by the wealthy and multinational corporations… pure genius.
There are very few examples of successful low tax economies. The US and Australia – for example – both considered to be historically strong economies – both have high levels of taxation and government spending. Most advanced European countries have high levels of taxation and spending also.
Could there be a link between economic growth and high levels of taxation and spending? Worth considering – unless you can find evidence of economically successful low tax countries.
Funny how some of the highest taxed people in the world such as the Scandinavian countries, are the happiest, the most productive and most sensibly-socialist. They have well-funded public institutions and everyone gets a share of the pie.
They feel they are taking their rightful places as citizens of their respective countries instead of being left out in the cold by your counter-productive plan.