Nicola Willis' choice of Budget day attire is a sideshow to policy debate
Finance Minister Nicola Willis' choice of attire on Budget day has become a sideshow to the main event, drawing the ire of a New Zealand designer who labelled it 'total disrespect'.
The Carpenter's Daughter owner Caroline Marr says her research shows Willis' dress cost $1100 and was
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Scoop
3 days ago
- Scoop
Stimulate Or Suffocate, In The Light Of Older Women's Spending?
In the wake of the recent release of labour force data (Household Labour Force Survey, HLFS, Nicola Willis bemoans 'glass half empty' view of unemployment figures, RNZ 6 August 2025), 1918-1920 National Party Leader Simon Bridges, has called for economic "stimulus" to rescue in particular the dire Auckland economy. (See Call for government to help Auckland as unemployment rises, RNZ; contrast the Minister of Finance Nicola Willis's retrospective and ongoing advocation of fiscal suffocation Dangers of Excessive Spending Highlighted, Scoop; both 7 August 2025.) My focus here is to look at the historical and recent employment rates of older women (aged over 55), and to consider the importance of their spending to the health or otherwise of the New Zealand economy. My reference is the first chart highlighted in Employment in New Zealand – especially of women – at the Age Margins, Evening Report, 7 August 2025. The chart shows that there is a huge increase in the percentage of older women who meet the official definition of employment. (This generous definition includes wage/salary workers – fulltime or part-time – self-employed workers, active employers, and people working without wages in a family business.) The data reveals a huge increase in the 'participation rate' of older women in the labour market. The age group 60-64 had a particular impetus to retire later, namely the rise in the early 1990s of the age of entitlement to New Zealand Superannuation from age 60 to age 65. But the pattern is essentially the same also for women in their late fifties and in their late sixties. The appropriate benchmark year is 1987, by time the HLFS was bedded in and before the economic consequences of the financial crash in late 1987. While the high period for employment of older women is 2022 or 2023, when jobs were plentiful, we can be sure that the actual participation rate has not fallen since 2022, and has probably continued to rise. (We can disregard participation rates published in the HLFS; they are based on definitions of unemployment which only realistically apply to men aged 30 to 60. There is much 'hidden unemployment' amongst older women.) For women aged 55-59, we see a rise in labour market activity from 43 percent to 80% in 2018 and 2023. For women aged 60-64, we see a rise in labour market activity from 18 percent to 70% in 2022. (The dip for this early-sixties age group in the late 1980s and early 1990s is unemployment masquerading as 'retirement'.) For women aged 65-69, we see a rise in labour market activity from 8 percent to 44% in 2022. For women aged over 70, we see a tenfold rise in labour market activity from 1995 to 2025. (We desperately need a '70-74' age category in the published data; this 'early-seventies' cohort is likely to now be New Zealand's fastest growing employment demographic.) Overall, this truly massive labour force participation of older women in the last thirty years has been a barely noticed social revolution. The increase of employed older women is even more dramatic than these figures look, because New Zealand's highest birth numbers were in the late 1950s and the early 1960s. These women are now in their sixties, and born with higher life-expectancies than their parents. It seems unlikely that this increased labour force participation is a result of the rise of feminism in the 1970s; an increased advocacy for paid work was one plank of that feminism. Though feminism may have played a significant but lesser role in this huge social change. It seems far more likely that the main driving force is economic pressure upon households; stresses that have increasingly required all adult household members to be attached to the labour force, rather than the pre-1980s' emphasis on an individual (typically male) 'breadwinner'. The stresses initially hit households hardest in the late 1980s through massive rises in mortgage interest rates, and in the more frequent revision of interest rates by banks during the lifespans of home loans. To that we can add an increased reliance on other forms of personal debt, such as credit cards. The ongoing stresses relate to both the increased precarity of paid work for men and women – meaning women increasingly having to make significant contributions to household budgets – and the failure of hourly wages to keep up with gross domestic product per capita. In order to be able to buy the goods and services which made up our GDP, we needed ever more hours of household labour. Older households were able to hold out for longer against these pressures, but not forever. Hence, most of the increases of labour force engagement for these households have taken place in the last thirty years. Older Women's Spending What all this means is that, in the 2020s, a critical component of consumer spending is done by older households, and in particular older women. Their spending is a major source of 'stimulus' in the 2020s' economy. It is already apparent that suburban cafes, for example, survive very much with the help of patronage from groups of older women. By and large, most policymakers worldwide have now forgotten the lessons of the Great Depression of the 1930s. One of the most important lessons was that countries which had inbuilt means to keep incomeless households spending suffered much less in the peak years – the early 1930s – of that Depression. (These countries included the United Kingdom and Sweden; they contrast with France and the United States, which were still in Depression in 1939.) France in particular could not get out of that Depression. In part because of World War One deaths and injuries, it relied very much on immigrant labour (mainly from North Africa). It also relied on female and male urban labour from people with rural connections. So, when the Depression hit, the redundant workers – having no access to benefit incomes – simply returned to either Africa or to their parents' small farms. Most of Aotearoa's older women cannot emigrate if they lose their incomes. But most of them will not be able to draw on a benefit to offset their lost wages. Some are already receiving New Zealand Superannuation, and that will rise a little as the marginal tax rates on their 'Super' will come down. What of those under 65 who lose their incomes, noting that many employed women age 55-64 live in households which pay mortgages or rent? Most will not qualify for an MSD benefit; they will be fully reliant on their partners' or adult children's wages. Some, who do qualify for benefits, will face stand-downs of several weeks or months; and time engaging with MSD that would be better spent with their grandchildren or elderly parents. One particular group of older women is those, mainly in their early sixties, who used to be able to get a 'non-qualifying spouse Superannuation benefit', ie if their partners were superannuitant pensioners with minimal other income. (With zero fanfare, one of the first things the Labour Government did, in October 2020, was to cancel these women's entitlement to what was an important form of transitional income support.) These women, grandmothers in large part, are the 'breadwinners' in their senior households. If they lose their jobs (or their 'roles' as we are now supposed to say), that means a potentially catastrophic loss of household income. (We should note as an example that the New Zealand Polytechnic sector, currently undergoing significant restructuring and financial downsizing, has a particularly important portfolio of older female employees; many of these workers have substantial institutional memory, keeping their organisations functioning more than many of the younger managers appreciate.) MSD should be focussed on helping young people to find paid work, and not having their resources logjammed by older women who would have previously had access to income support without red tape. The Laws of Stimulus The First Law of Holes, is 'stop digging'. (We note that a 'depression' is, literally, a hole.) Finance Minister Nicola Willis is digging furiously, burying alive suffocating Kiwis. The first law of stimulus is to stop public-sector retrenchment. That is the main single lesson from the near-forgotten Great Depression. The second law of stimulus is to have rights-based alternative sources of income that individuals of all ages can fall back on. The third law of stimulus is to stop pursuing a monetary policy that jacks-up interest rates; the 'cost-of-living crisis' is substantially a 'cost of jacked-up interest rates' crisis. (As I have already noted, debt is something that drives more people into the labour force; it's not just the amount of debt, it's also the cost of that debt.) We may note that New Zealand got out of the Great Depression by adopting all three laws of stimulus. And a fourth law, by using the cheap money to embark upon a very successful 'state housing' program, New Zealand recovered in 1936 to 1938 with double-digit economic growth and near-zero inflation. Some of those houses, well-built, are worth a fortune now. Fletchers and other capitalists made a fortune, too; this is the kind of stimulus which would meet Simon Bridges' business-perspective criteria. Homelessness was not acceptable to New Zealanders back then, as it seems to be now. Are we looking at a coming decade of escalating homelessness for older women? When just about every adult is 'in the labour force' – unhidden or hidden – desperately needing income while employment 'roles' are in decline, the social stresses cannot be contained forever. Younger people may revolt, turning to the underclass-politics of the street. Older people are more likely to die unseen, as too many did in July 2022 (many denied desperately-needed second-booster vaccines) when the Covid19 pandemic really hit Aotearoa New Zealand. Do any groups of influential people out there have the imagination and capacity to answer the call for humane economic revival? Or is it a case of those who would can't, and those who could don't? ------------- Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand. Keith Rankin Political Economist, Scoop Columnist Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s. Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like. Keith retired in 2020 and lives with his family in Glen Eden, Auckland.
Scoop
4 days ago
- Scoop
On A Clueless Government Running A Jobless Economy
One of the whoppers told regularly by Nicola Willis and Christopher Luxon is that National inherited a terrible, no good economy from Labour, with rampant inflation and sky high interest rates that they have since -allegedly- brought under control. In reality, Labour had already got inflation under control. The inflation rate had fallen during the last quarter of 2023 to only 0.5 %. The annual inflation rate was 4.7% in December 2023,heading downwards from the 5.6% reached in the September 2023 quarter. In other words, what National inherited was the bog standard inflationary bubble that every developed country in the world experienced in the aftermath of measures taken during Covid to protect jobs and save firms and entire sectors (eg tourism) from plunging into what would otherwise have been the worst recession since the 1930s. At the time, business was calling for these inflationary support measures to be bigger, and to be kept in place for longer. To repeat: by the time the Luxon government took office, inflation was already in decline. Meaning : for Willis to be still blaming this week's terrible unemployment figures on the previous government is truly desperate stuff. People are out of work at levels unseen since the pandemic because of the ideologically-driven mistakes made by Willis and her Cabinet colleagues. For and Co (a) needlessly sacked tens of thousands of public servants (b) virtually shut down the construction industry at the estimated cost of 14,000 to 17,000 jobs in this sector alone and (c) pursued austerity measures when the weakening economy was actually in need of a government stimulus, which would have been the orthodox response to an economy teetering on recession. Instead, Willis slammed the brakes on. In desperation, the government is now turning for salvation to the Reserve Bank, and expecting the Bank to do the opposite, and stimulate the economy (and household spending) with interest rate cuts. Rate cuts are unlikely to do the trick. When people are being randomly sacked, are fearful of losing their jobs and are having the real value of their wages cut, it will take a lot more than a 25 point or 50 point rate cut to get them back spending up large in shops, cafes and restaurants. Retailers hanging on for a consumer-led recovery might be better advised to cut their losses and move to Australia. Because the policies of this allegedly 'business friendly' government are burying them alive. Counting the costs Here are the grisly details. Unemployment is running at a seasonally adjusted rate of 5.2%, the highest rate since the pandemic in 2020. That means roughly 158,000 New Zealanders are out of work. Tens of thousands more are under -employed. These are the people working in part time jobs while wanting more, or people who have simply given up looking for jobs that no longer exist. At the same time, Social Development Minister Louise Upton is flogging them with benefit sanctions if they fail to persist in this fruitless exercise. The jobs outlook is dim. As Stats NZ figures indicated this week, underemployment is accelerating : The underutilisation rate, a measure of untapped labour market capacity which includes people who are unemployed or underemployed, was 12.8% in the June 2025 quarter. It was 12.4% in the March 2025 quarter and 11.9% in the June 2024 quarter. At the same time, the ratio of people in paid work is falling : The employment rate was 66.8%, down from 67.1% in the March quarter and 68.3% a year ago. Wages are also in decline: Annual wage inflation was 2.4%, compared with 4.3% in the June 2024 quarter. Young people (and others) have read the signs and are leaving for a better life in Australia and beyond. What trained graduate with a big student loan wouldn't do likewise? In Auckland, the jobless rate is estimated to be over 6%. Wellington's jobless rate has risen from 3.4% twelve months ago to 4.8 % now, after Willis took a chainsaw to the public service, to the detriment of the Capital's retail economy. The few signs of life are out in the regions, where the benefits of high commodity prices on global markets are trickling into provincial towns and cities. Thanks to foreigners. The domestic battle against rising costs is being lost. Annual inflation is currently running at 2.7% i.e. ahead of the 2.2 % wage growth in June 2025, which was the lowest reading since June 2021. Wages are set to sharply deteriorate further – given the 1% wage offers being put on the table for teachers, and the 3% (over two years!) pay offer to nurses. There is an ugly term for the ugly condition being created by the raft of contradictory government policies: stagflation. It occurs when efforts to stimulate growth get cancelled out by policies to keep inflation in check. Businesses facing rising costs lay off staff, and when demand falls, they lay off more in a negative spiral that they then try to counter by raising their prices. Costs and job losses mount in tandem. The result is stagflation: a condition marked by high prices, slow growth, high unemployment and prolonged economic stagnation. It can last (eg Japan in the 1990s) for a very long time. We shouldn't be in this mess. Basically, the Luxon government had one job to do. It had to continue the battle against inflation that was already being won in late 2023, at the time when they took office. It has bungled that job, spectacularly. (So much for the myth that centre-right governments are better at running an economy.) To cap things off, the coalition government may be re-losing the fight against inflation as well. The latest ANZ Roy Morgan poll makes grim reading on that point : Inflation expectations lifted 0.2 pts to 5.1%, the highest since April 2023. Food price inflation of 4.2% y/y probably has a lot to do with it. Footnote : Incidentally, that's a thing to keep in mind about the averages in official statistics. The headline news has been that inflation is back within the RBNZ's target range of 1-3%. That offers little consolation to households where people are losing their jobs, the real value of wages is falling and food prices are still increasing at over 4%. That is also not a scenario in which a consumer-led recovery is going to break out anytime soon. Out of Work Songs about hardship are eternal, and this beautiful song by Stephen Foster - America's first professional song-writer – was written in 1854, 171 years ago. Great rendition here by Jennifer Warnes and a few of her friends : It may sound even more dated, but the sentiments of this early 1980s track by Gary US Bonds are also timeless. 8 A.M., I'm up and my feet beating on the sidewalk Down at the unemployment agency, all I get is talk I check the want ads but there just ain't nobody hiring What's a man supposed to do when he's down and Out of work I need a job, I'm out of work
NZ Herald
4 days ago
- NZ Herald
Cost of living, economy challenge National ahead of Election 2026
Finance Minister Nicola Willis and Prime Minister Christopher Luxon. Photo / Mark Mitchell. Cost of living and the economy remain top of the agenda for the National Party Prime Minister Christopher Luxon is already touting his leadership as one that is a 'clear choice' for New Zealanders, while reiterating that the Government 'inherited a mess and is sorting it out'.
