
The government's consistent, principled approach to economic data
When data came out showing inflation at a 12-month high on Monday morning, the government quickly started channelling the enduringly popular and intergenerationally relevant reggae fusion artist Shaggy. ' It wasn't me,' said prime minister Christopher Luxon, in an interview with Newstalk ZB's Mike Hosking. 'All I can do is the bit that I can do, which is the fiscal side of things. The Reserve Bank controls the monetary policy,' he said. 'It wasn't me,' said finance minister Nicola Willis, in a press release noting inflation remains within the 1 to 3% target band. 'The effect of council rates on inflation is a concern,' she said. 'That's why this government has also been clear in its call to councils to focus on the basics and keep rates under control.'
Both politicians have a point. Inflation is the mercy of an array of local and international factors. The economy could be humming along, only for one of Donald Trump's brain worms to writhe the wrong way and prompt him to bomb the Middle East or raise tariffs to 150% on Gondwanaland. International dairy prices could spiral, sending the price of 400g of Westgold to roughly the equivalent of 400g of actual gold. Local councils might suddenly realise they've forgotten to properly maintain or upgrade their pipes for 50 straight years, forcing them to raise rates to stop town centres being drowned beneath spontaneously formed lakes of raw sewage.
All these events are, to varying degrees, outside the control of the current government. Inflation is to a large extent the result of decisions the Reserve Bank made a year ago while weighing up an array of factors. But if Luxon and Willis aren't responsible for inflation, several of their past statements seem perplexing, starting with all the times they've directly taken credit for inflation.
Similarly, Luxon has regularly taken credit for the Reserve Bank's decisions to cut the official cash rate, which are interlinked with inflation and similarly subject to the international economy.
Some would see double, or at least inconsistent, standards in these statements. On the face of it, that's fair. But on a deeper level, they're in line with a consistent and principled approach from the government when it comes to interpreting economic data. It's routinely applied the same standard, whether it's to a wellbeing indicator or a GDP update. The method boils down to a single precept: if it's good, then the government did it, and if it's bad, it's someone else's fault.
Take young people moving to Australia. Prime minister Chris Luxon has shrugged off the government's potential role in the return of the brain drain. Though some could point to the cancellation of dozens of public infrastructure projects and the subsequent slowdown in the construction sector as a factor in rising migration across the Tasman, he has eschewed that for other explanations, telling Ryan Bridge that stemming the outward tide comes down to delivering better education, more efficient access to healthcare, and improved public safety.
In 2023, Luxon's deputy David Seymour said ' Kiwis [were] voting with their feet ' when roughly 24,000 New Zealanders left for Australia. When 30,000 people departed last year, he blamed the economic wreckage left by Labour, telling reporters it was down to a 'hangover from Covid'.
When GDP goes up, it's the government's plan working. When it goes down, it's six years of economic vandalism under the last one. When food prices rise under Labour, it's Labour's cost of living crisis. When they rise under National, it's still Labour's lingering cost of living crisis.
If something goes wrong, like the government failing to fund 13 new cancer drugs it promised to sick patients during the election campaign, it's Labour's fault. If something goes right, like 7,000 new state houses getting built, it's thanks to National even when they were funded by Labour.
It's a bipartisan trend. For several long years after it was elected in 2017, Labour screamed the words 'nine long years' in response to any criticism from National. It's been critical over the latest inflation data, pinning the blame entirely on the government's economic management. When inflation went up while it was in power, it was a victim of the global inflation pandemic.
Some of their criticisms have merit. Some of their self-aggrandisement is fair. But the overarching message from our politicians is that if something makes you sad, then it's the other guy's fault, and if something makes you happy, it's theirs. Maybe a more honest, responsible approach would be to admit that some things are beyond the control of politicians on a small island at the bottom of the south Pacific; that the weird conniptions of great and terrible global powers could make and break our economy at any moment; that the cost of living in New Zealand is far more reliant on the whims of Chinese parents than bike lane-loving councils; that we have only a small amount of control over our own affairs and chaos beckons at every corner.
You may think that's impossible. 'You may think it's a ridiculous hope, borne of political naivety. But if you do, then I have a response you'll have to accept: this is all my editor's fault.

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NZ Herald
an hour ago
- NZ Herald
Nicola Willis criticised for cost of living ‘sermon' during post-Cabinet press conference
'Spending more, taxing and borrowing more as Labour and other parties advocate for, didn't work in the past and it won't work in the future,' Luxon said. Finance Minister Nicola Willis during the post-Cabinet Press conference at Parliament. Photo / Mark Mitchell 'The most important thing we can do to make you better off is to double down on our economic plan,' he said. Hipkins called Willis' and Luxon's address a 'sermon' that showed the pair was out of touch with the daily reality of New Zealanders. Although the party said they were going to get 'New Zealand back on track' as per their election campaign slogan, Hipkins claimed 'across the board, New Zealanders can see the country is going backwards.' 'Yet Christopher Luxon and Nicola Willis just say – 'oh, that's all part of the plan, we've got this' – they haven't got it. 'Things are getting worse for the vast majority of New Zealanders and no amount of spin from them is going to change the reality that things are getting worse for New Zealanders under their leadership. 'I think we should start calling them Fisher and Paykel because they've got more spin than a front load washing machine.' Tax relief was a major part of National's 2023 election campaign amid flaring inflation and a cost of living crisis. The party campaigned on a series of policies aimed at helping the 'squeezed middle', including adjusting tax rates, increasing tax credits and FamilyBoost. These policies came into effect in July last year. Willis said today the average household is $1,560 better off after the Government's tax relief package. 'We have also introduced FamilyBoost, which with the latest expansion gives families up to 40 per cent off their childcare costs. 'We have removed the Auckland fuel tax, introduced 12-month prescriptions, increased the rates rebate for 66,000 seniors and increased Working for Families payments.' Finance Minister Nicola Willis and Prime Minister Christopher Luxon arriving for the post-Cabinet Press conference. Photo / Mark Mitchell Luxon stressed that a year and half into the term, he and his party were still fixated on improving the economy and the cost of living. Things were still tough for many families but the economy was 'expected to grow on average 2.7% per year creating 240,000 jobs over the next four years. 'In the short term we are pulling every lever we can to help Kiwi families with the cost of living.' The Government also announced the scrapping of surcharges at the till, such as when a customer uses PayWave or their mobile phone to make a payment. 'New Zealanders are paying up to $150 million in surcharges every year. That's money that could be saved or spent elsewhere.' Luxon also said the changes the Government were making to construction would help reduce costs for businesses and New Zealanders. Earlier in the day, Workplace Relations and Safety Minister Brooke van Velden announced she would review safety rules for scaffolding, saying she had received many complaints from the construction industry that current regulations were too complex and expensive. Van Velden was light on the details of what specifically would be reviewed, but said officials would consult on proposed new rules that would give people a selection of safety options depending on how dangerous the job was. 'If it's not very risky, they will not need to use expensive scaffolding. 'For example, they will be considering whether a ladder could be used instead of scaffolding for a simple roof gutter repair or minor electrical maintenance when working at height.'


Otago Daily Times
3 hours ago
- Otago Daily Times
NZ 'back on course', govt says
By Russell Palmer of RNZ The government has launched a defence of its record on tackling the cost of living. Finance Minister Nicola Willis joined Prime Minister Christopher Luxon at the Beehive Theatrette for the weekly post-Cabinet briefing. She spent much of the previous week facing questions about her meeting with Fonterra chief executive Miles Hurrell. Luxon said this week marked a full year since the tax bracket changes National campaigned on had come into effect. "It's only through a strong economy that wages rise faster than inflation, that Kiwis can get ahead of their daily costs and our businesses can take risks that can mean that they can invest, grow, and create more jobs," he said. He directly targeted National's main rival in opposition. "Other parties in Parliament believe that raising taxes, growing the public sector, and giving more handouts to those who refuse to work is the answer. Taxing more, spending more, and borrowing more as Labour and others advocate for didn't work in the past and it won't work in the future." The government's decision to increase fees paid to board members on Crown entities - in some cases up to 80 percent - may undercut the messaging that National is prioritising low and middle-income New Zealanders' interests. But Luxon today pointed to the building products changes announced over the weekend, and the proposed ban on payment surcharges as recent examples. He then pointed to other items in the government's agenda, including: the current pipeline of infrastructure projects, Roads of National Significance, completing the City Rail Link, signing trade deals with the United Arab Emirates and Gulf Cooperation Council, starting negotiations with India, the digital nomads visa, and the Investment Boost policy. Willis soon picked up the baton, rattling off her own list of changes the government had made which she said had helped lower costs, including: the Family Boost policy, ending the Reserve Bank's secondary mandate to account for unemployment, curbing government spending, changing residential tenancy laws, tax deductability changes for landlords, delaying the previous government's petrol excise increases, scrapping the Auckland Regional Fuel Tax, increasing rates rebates for seniors, increasing Working for Families support, and extending maximum subscription lengths. She said National had campaigned on tackling the cost of living crisis, and pointed to rising GDP per capita and wages rising faster than inflation as a result of the government's interventions. "Taking the pressure off inflation - that is the general level of price increases across the economy - helps with the cost side of the cost-of-living equation. Lower inflation means less pressure on prices... it's pleasing to say that wages are now growing faster than inflation and forecasts show this trend continuing over the next few years." She said the government's tax changes meant "households have benefited by an average of $60 a fortnight". The change to interest deductibility for landlords had helped to take the heat out of the rental market, she said, noting "the 2.6 increase for the year to June was the lowest since 2011". She said the government was also making big structural changes, saying "the last government conclusively proved that band aids are not enough" and pointing to a series of policies yet to come to fruition: the Going for Housing Growth policy, Fast-tracking renewable energy consenting, work to address supermarket competition, and to curb council rates increases. "Economies are like oil tankers, you can't turn them around on a dime. But New Zealand is back on course," Willis said. The lists of government achievements kept coming, with Willis also pointing to: education reform, the investment boost (again), promoting global trade and investment, changes to the research and development sector, and "delivering infrastructure projects faster and better". Meanwhile, a Cabinet Office Circular reveals the government signed off on increases to fees available to board members of Crown entities. This includes increases of 30 percent for Group 2 and 4 boards and Audit and Risk committees, and an increase of 80 percent for Group 3 bodies. Luxon said the public sector director fees "have got completely out of whack compared to private sector fees". "Obviously we will never pay as much as someone in the private sector but when you are spending $32 billion on healthcare for example, it's important that we are actually able to attract really good governors for the Health NZ board, for example," he said. The changes took effect at the start of July.


NZ Herald
3 hours ago
- NZ Herald
Govt to increase Crown body board members' fee ranges, in some cases by 80%
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It applies to members of a range of bodies or groups the Crown has an interest in, such as royal commissions, ministerial inquiries and some governance boards. However, it doesn't cover pay set by the Remuneration Authority, which deals with MPs, the judiciary and the heads of various commissions and authorities. The framework is reviewed every three years by the Public Service Commission, which reports to Cabinet on the fees. A Cabinet Circular today revealed the new pay ranges. Photo / Mark Mitchell The circular issued today says Cabinet agreed to a revised framework that took effect from July 1. A list of 'main changes' from the previous framework include 'an increase of 80% to the fee ranges' for some governance boards and 'an increase of 30%' for other bodies. It is 'not intended to be prescriptive, and judgment will be required to determine best fit', the document says. It enables a 'consistent approach' to setting fees across bodies. The new framework says setting fees should 'support the appointment of appropriately qualified and diverse body members', contain expenditure within 'reasonable limits' and 'provide flexibility'. 'The framework enables fees to be determined by ministers and other fee-setting authorities who are most familiar with the work of particular bodies.' There is a lengthy process of setting or reviewing members' fees, which takes into account the complexity of their role, the degree to which the role is in the public eye, and recruitment or retention issues. 'Fees will continue to be set on a fair but conservative basis to reflect a discount for the element of public service involved,' the framework says. Members occupying identical positions on the same body should be paid the same rate, but the framework says in some cases it 'is necessary to secure people with scarce specialist skills' and therefore consideration may be given to a higher fee. Alternatively, a fee lower than the suggested range could also be paid in some circumstances. The framework says the schedule of fees 'reflects the nature of their business environment and the role requirements'. The 80% increase applies to the fee range for governance boards responsible for most Crown entities. The top range, for those appointees given the highest scores against the set criteria, is between $73,100 and $162,200 for a chair and between $36,500 and $80,400 for a member. This compares to the previous 2022 framework, which had a range of $40,596 to $90,123 for chairs and $20,295 to $44,655 for members. The new bottom range for this group is between $25,800 and $54,200 for a chair and between $12,900 and $27,100 for a member. On the face of it, to be in the top range, an appointee would need to chair the governance board of an entity with a budget in the hundreds of millions of dollars or above, and with more than one primary function. This would require consultation with the commission. The range reflects an annual rate, which the framework says is consistent with the private sector and is appropriate given the workload is 'predictable and/or substantial'. It's expected these members work about 30 days a year, 'which is in line with the amount of time spent by board directors in private sector companies', while chairs are expected to work about 50 days a year. 'The fees for chairs is set at approximately twice the rate of the members to take account of both the differences in responsibility and in workload,' the framework says. 'Where it is anticipated that a chair or members will have a lesser workload than above, it is expected that this be reflected in the fee level.' One group has had its fee ranges increased by 80%. Another grouping with its own fee ranges are members of statutory tribunals and authorities. This is reflected in a daily rate as it is expected their workload will be 'unpredictable'. The top range for these chairs is between $995 and $1550, or between $640 and $990 for members. The bottom range is between $525 and $770 for chairs, and between $416 and $500 for members. A range of additional information is also provided around expenses, how to review current members' fees and where exceptions to the framework could apply. A report from the Institute of Directors in October found directors' fees had not been keeping pace with inflation. 'Despite some claims that directors are overpaid, non-executive director fees rarely increase in line with general employee increases or inflation.' Jamie Ensor is a political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. In 2025, he was a finalist for Political Journalist of the Year at the Voyager Media Awards.