The Conversation: Willis warns of a ‘tight’ Budget to come, but NZ should be going for productivity, not austerity

Finance Minister Nicola Willis has warned her 2025 “Growth Budget” will be “one of the tightest Budgets in a decade”, with plans to reduce spending by billions. It’s clear New Zealand is following a global trend towards austerity by focusing on reducing government spending and lowering government debt. Complicating the economic picture for the Government are Donald Trump’s tariffs and his trade war with China.

In early April, financial services company J.P. Morgan Research said there was a 60% probability of the United States experiencing a recession in 2025 — with a 40% chance of a global recession.



Drastic action not needed Despite this uncertain economic future, the idea that New Zealand’s debt-to-GDP ratio requires immediate and drastic austerity-like measures is not supported by the evidence..