Latest news with #HuttValleyChamberof
RNZ News
05-05-2025
- Business
- RNZ News
Political commentators Brigitte Morten and Lianne Dalziel
Finance Minister Nicola Willis announced at a speech to the Hutt Valley Chamber of Commerce the government is halving its operating allowance. Photo: RNZ / Sam Rillstone Brigitte Morten is a director with public and commercial law firm Franks Ogilvie and a former senior ministerial advisor for the previous National-led government, a National Party member and currently volunteering for the party's deputy leader, Nicola Willis. Lianne Dalziel is a life member of the Labour Party and a former MP and Cabinet Minister. She ran as an independent for Christchurch's mayoralty in 2013 and was the city's mayor for three terms. She writes a regular column for
RNZ News
29-04-2025
- Business
- RNZ News
A $1.1b cut to the government's new spending comes after Trump's trade trafiffs
Finance Minister Nicola Willis made a pre-budget speech to the Hutt Valley Chamber of Commerce on Tuesday. Photo: RNZ / Sam Rillstone Finance Minister Nicola Willis says her axing of a billion dollars from the government's operating allowance is a response to "the times we are living in" and pointed to US President Donald Trumps trade tariff's which she called a "seismic global economic event". Willis also said the cut was about reducing New Zealand's interest debt burden. The Greens are accusing Willis of "slash and burn" economics while Labour leader Chris Hipkins said it would drive New Zealanders overseas. But Willis told media at a pre-Budget announcement on Tuesday she'd worked hard to avoid the mistakes of austerity budgets of the past, balancing growth with investment. She was confident about getting back to surplus by 2029, saying New Zealand must curb its borrowing, and new spending would be slashed from $2.4b to $1.3b. The minister told Checkpoint the government would continue to spend more each year after this year. "What this is about is a responsible budget management because right now every week we're going out to the world and borrowing around $500 million. "We have debt at levels not seen since the mid-1990s. We're running one of the biggest deficits in the world. "That's the difference between what we're earning and what we're spending. That can't go on forever." She said as a country, New Zealand couldn't keep wracking up unsustainable debt. But she said there would still be more money in the May Budget for priority areas such as health, police and defence. "The alternative approach is frankly irresponsible. To not adjust our spending to the times we find ourselves in. That way lies high inflation, high interest-rates and the economic ruin that comes with it." Willis said a careful budget process, which was done by the entire Cabinet, had enabled the government to stop borrowing and start investing in critical areas. "Let's not just forget that a few weeks ago there was a seismic global economic event that has affected global trade, that will affect New Zealand's growth trajectory... "The introduction of tariffs, counter tariffs, tariff pauses, all of that by international consensus has lessened the forecast for global growth." Asked if the public service should be prepared for more job cuts, Willis said it could not expect "more money to do the same things". "This is not a time in which we can afford extravagant wage claims. I think the senior doctors coming out at 12 percent was pretty extravagant. I don't think there are many New Zealanders right now who have successfully got a 12 percent pay rise." Senior doctors were planning strike action for 24 hours on Thursday. Willis said business growth was on the radar in the upcoming Budget, as was investment in social initiatives, and the government was committed to meeting the bill for superannuation which was in the billions. She was concerned with debt levels at 42 percent of Gross Domestic Product, when it typically hovered at 25 percent. "My worry is that if we were to have significant event, an earthquake, another pandemic God forbid, a biosecurity incursion, that we would properly at that point have to borrow more and then we're getting to the point where the interest on our debt would become almost very difficult to manage." That debt was now more than $9b, she said. "That's more than all the money that goes into the police, Corrections, Justice and Defence combined. "We can't really afford to have that interest bill spiralling out of control." Meanwhile, Infometric's chief forecaster Gareth Kiernan earlier told Checkpoint the minister's announcement came as a surprise. "It's out of the blue given that she's been pretty committed to that $2.4b operating allowance previously and in the knowledge that even Treasury had said previously that wouldn't be enough to necessarily keep the lights on, given costs increases and demand pressures associated with population growth." However, Kiernan said the key was looking at the other side of the equation with Willis given assurances there was still enough money for critical investment. "It's not about slashing and burning everything," Kiernan told Lisa Owen. "Gosh, we could be under a much more austere approach if we wanted to really get back to surplus a lot quicker but that is not going to be helpful to the economy if we go down that path." Economist Gareth Kiernan says the government's announcement it will slash $1.1b from new spending in next month's Budget is a surprise. Photo: RNZ / Rebekah Parsons-King He predicted the savings the government had identified would be more targeted and nuanced than last year's "blunt instrument" of finding a six to seven percent savings across the board. Asked by Owen if that was the slashing of public servants, Kiernan said it was the culling of programmes that hadn't progressed and job vacancies that hadn't been filled. This time around he said deeper and more "sensible" questions had been asked by the government to achieve the savings. Asked if Trump's trade tariffs had forced the government's hand, Kiernan said that was the message that "seems to have been put out there". "That over the last couple of months the economic environment internationally has deteriorated. "I mean, we've revised down our own forecast of GDP growth through 2026 by close to 1 1/2 percentage points, given the risks there are around that international trade situation." He said that was not just a direct result of the tariffs but how it flowed through to New Zealand's other trade partners such as China. "If the New Zealand economy grows more slowly going forward than we have been expecting, that means the government will have less tax revenue coming in and so that means they have less room to spend on the other side as well." Kiernan said it looked as if there'd be a significant slow down in export growth and that recovery, as well as businesses and households being more cautious. That could look like the labour market not picking up as quickly later this year, with businesses holding off hiring staff meaning job and income security might not be as strong going forward, he said. Kiernan expected, however, to see more capital spending from the government and investment in infrastructure. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
New Straits Times
29-04-2025
- Business
- New Straits Times
New Zealand 2025 spending budget shrinks as economic growth slows
WELLINGTON: New Zealand Finance Minister Nicola Willis said on Tuesday baseline spending in the 2025 budget would be reduced to NZ$1.3 billion (US$777.14 million) from a forecast of NZ$2.4 billion, as she outlined worsening economic conditions in the country. "That lower growth trajectory has an inevitable impact on the government books, reducing revenue and threatening our already difficult return to surplus and debt reduction," she said at a speech to the Hutt Valley Chamber of Commerce. She said the government intended to return to a surplus in the 12 months ending May 30, 2029 under the measure it introduced last year, which excludes the financial position of the government-owned accident health provider. "At our last update in December - well before Trump's 'Liberation Day' - we were expecting a small surplus in 2029, and it remained our intention to returning it a year earlier if possible," she said. "I can confirm that our Government remains committed to those goals," Willis added. Since being elected in October 2023, the centre-right coalition government has faced rising unemployment and lower tax revenue than expected. It has worked to reduce spending and has made significant cuts to the public service as it pursues a return to surplus and will release a new budget and updated economic forecasts on May 22. Willis said the situation has worsened, with the economy still growing but not as fast as forecast a few months ago. She said Treasury had adjusted the forecasts it presented in December, reducing their assumptions of real GDP growth in New Zealand in 2025 and 2026. She added, however, it does continue to forecast accelerating growth in the economy over the coming year, with falling unemployment forecast to follow in the second half of the year.
