Finance Minister Nicola Willis says New Zealand has not “escaped the aftershocks of world events” as new data shows hardship rising and more Kiwis struggling to pay the bills.
Speaking to Newstalk ZB Wellington Mornings host Nick Mills about the state of the economy, Willis acknowledged it had been “a tough time”.
“Things were starting to come along and then come April there were some reasonably significant announcements by the US President that sent ramifications through the world”, Willis said.
Donald Trump’s April “Liberation Day” announcement saw sweeping tariffs introduced for more than 125 countries, including 10% on imports coming from New Zealand.
Willis said business confidence has been impacted as a result and growth forecasts have been downgraded.
“Little old New Zealand, just recovering, has been really impacted by that.”
She said in spite of the global uncertainty growth is still forecast to improve, but “we haven’t escaped the aftershocks of global events”.
Credit reporting agency Centrix released its June Credit Indicator today. It showed household arrears were levelling out while hardship and company liquidations were on the rise.
Nearly 15,000 individual billpayers were in financial hardship, an increase of 300 from May, and 14% more than a year ago, Centrix said.
An uptick in hardship began in November 2022, and today’s figures “continues a steady upward trend”, Centrix managing director Keith McLaughlin said.
“I don’t deny those numbers, as you say, they’re facts and I meet enough New Zealanders each week to know there are still a lot of people doing it tough”, Willis said.
She said it comes at a time when New Zealand is at its “peak unemployment”.
“When unemployment is higher, of course that is when you see people unable to pay their bills”, Willis said.
On the increase in business liquidations, which Centrix recorded as being up 27% on last year’s figures, Willis said there would be a variety of reasons for that and disputed the Government was responsible.
Asked by Mills if her government could have done more to assist struggling businesses, she said there were “certainly things we could have done which would have made it harder for them”.
Willis pointed to moves like tax cuts, cutting red tape, and the investment boost policy, which she said are benefiting small businesses.
Willis, a lifelong Wellingtonian, was asked about the state of the capital. She responded by criticising Wellington City Council for having had “its eye completely off the ball”.
“It feels to me like a place that needs a fresh start”, she said.
Willis believes the city still has “cool things” going for it like smart tenacious people, the native bush, and the city’s hospitality scene, but said “man oh man have we mucked up” with regard to council decision-making.
She said the council must be focused on keeping rates low.
It comes after the council approved a 12% rates increase for the 2025/2026 year.
“It seems to me that the council has not been focused on that mission and at the same time has been quite distracted by what I would say are interesting political debates.”
She said the city has been in a “disappointing chapter”.
Asked whether she is excited by any of those running in the upcoming local election, Willis said she does not endorse candidates but is looking for two things.
The first was getting rates rises under control.
“That means actually being prepared to stop doing some things, we’ve had to do that as a government”, Willis said.
The second thing she was looking for in candidates was policy that is “genuinely pro-business”, citing Wellington’s disproportionately high commercial rates.
She also spoke on the Golden Mile project saying while she understands the vision, now is not the time.
“I’m looking for councillors who are pledging to be disciplined about the way they spend ratepayer money”, Willis said.
Ethan Manera is a New Zealand Herald journalist based in Wellington. He joined NZME in 2023 as a broadcast journalist with Newstalk ZB and is interested in local issues, politics, and property in the capital. Ethan can be emailed at ethan.manera@nzme.co.nz.