PM rules out election year 'lolly scramble,' hoping instead more voters will 'feel the benefits'of' 2026's economic recovery; Breman rebuked; Auckland Densification backtrack confirmed
Feels like Luxon has given up doesnt it? There was no vision, no passion, nothing to get behind. Does he actually want the job and do something with a legacy? Or is he happy to just do enough to scrape through at the election and essentially be nothing more than a footnote of history.
People are wanting more, they want real leadership and direction. Luxon's only real saviour right now is Hipkins and Labour. Because they are equally so far missing the moment to rise to the occasion.
The fact that National's first 'policy' of 2026 is a capulation to the auckland property sprukers which will further lock out young kiwis, says it all really. What a total waste of the last three years and likely next three years for the direction of our country.
Agreed. Nicola Willis is the "The Liz Truss of the South Pacific".
What is worse to having an incompetent Minister of Finance, is having a delusional PM:
"Nicola Willis is the best Finance Minister New Zealand's ever going to have, she's an outstanding person, she's an outstanding person, she's an outstanding Finance Minister, Economic Growth Minister, she's doing an exceptionally good job in a very tough situation."
Thanks, Bernard. i think we're going to need your helpful analyses through this year more than usual. One question if you have time: your own views are pretty clear and that you don't believe that things will much improve on our current course. I hear that elsewhere too. Are there any respectable and objective economists who disagree and believe this is the right approach? Who? I'd like to follow up.
The real driver of our economic performance for 2024 and 2025 is the flawed ideology being applied by this government of cutting back the public side of the economy - not realising or understanding that public spending is private sector income, or that we cannot thrive as a country without a strong public sector.
As the Monster of Finance is intending on tighter public spending this year it is inevitable that 2026 will not be the growth year that this deluded government expects, or at least is gambling on.
Keynes' General Theory was published 90 years ago but it seems that the coalition government hasn't read it yet (unlike the first Labour Government).
I also think of how much an influence the pay equity scheme may have had on the Aotearoa-New Zealand economy - they stole the money put aside for sucessful claims to fill the budget hole.
Had those claims with merit been allowed to conclude and been settled - most of that money would have been spent in the A-NZ economy - as was shown in one of the 3 pieces of supporting documentation "used" in the amended legislation. How much of a boost to our economy might this have been? Possibly not enough to counteract the deficit caused by the job cuts their rediculous austerity has created, but it would have helped more then landlords have lowered rents.
Luxon's speech-writer clearly lost track of time while on holiday and frantically photocopied a faded copy of a copy of a copy of a copy of one of his old Unilever "boredroom" speeches... Obviously, what with him having to squint to read the blurry LinkedIn-optimised verbiage on the copied-copy, Luxon must have failed to see that great 'cost-of-living' news for meth-heads (and their dentists)!
Are they including the price of meth in the new CPI indexes to artificially lower our rate?
...But seriously, the cyclical economy will eventually get better. On the other hand, the effect of "that strategy (of tightening budgets- austerity, that) didn’t work in 2024 and 2025 to fire up the economy" will slow it down. Hopefully, voters this time will see a connection between budget cuts and outputs in health, education, housing and infrastructure.
I think it is no coincidence that high-tax nations, such as Nordic Europe, which spend more on health care and infrastructure, have higher growth, productivity, and quality of life than we do. And, of course, their high union participation helps keep wages above the rate of inflation.
We don't have a "cost of living crisis". We have an economy and government that depresses wages so they don't keep up with inflation, much less growth.
I note they are now talking about budget 'savings' rather than cuts.
When will they figure out that private money has run out (for the most part)? Are they really that blind to what is happening with wealth distribution across the world? The people who have the money now are not the same people as 20 to 40 years ago. 20 - 40 years ago, it was the average kiwi that had wealth; they were the people who cared about what was going on in this country. The people who hold the wealth now, a handful of kiwi's, the majority not New Zealanders, actually just don't care beyond their own purses.
For many low income families who try to earn a bit more gross income- Luxon should acknowledge the impact of high effective marginal tax rates that destroy that very motive to earn extra and add to his cherished economic growth. He has made this problem worse in fact. While this year there will be a slight improvement in the threshold income for a family it is a drop in the bucket and is to be offset by an even higher rate of clawback of WFF (27.5%)- reducing incentives yet more, and creating more crippling debt to IR.
The threshold for repayment of student loans is frozen at an absurdly low income- imposing an extra effective 12 % tax on all income over just $24,128 per annum.
So a family who achieves the new WFF threshold of $44900 an extra dollar is taxed at 17.5%, ACC 1.6% student loans repayment 12% KiwiSaver, 3% repayment WFF 27.5% and possible 25% loss of the accommodation supplement or increase in income related rent --a tax of 86.6% leaving 13.4 cents in the hand--. If their extra gross income pushes them into the next tax bracket of 30%, their EMTR may rise to 100%. Nothing to show for their efforts. I fear Luxon doesn't understand this issue
they keep going on about our tax cuts - any tax cut most people received was completely un-done by increases in food, rates, insurances, electricity etc, etc.
Again, when you're on mega-bucks, & are sorted, your taxcut might have been useful, mine certainly was unremarkable against other cost increases.
Thanks for your analysis of our PM’s ‘Stale’ (sic) Nation speech, Bernard.
No need to apologise for yesterday. I still found your live stream told us more than we got from Luxon. In fact, even allowing for his business-type audience, what he didn’t say and include was just as educational as his turnaround-specialist MBA mumbo jumbo, and more so than what he did say. The muted audience reaction said it all.
I also thought it was instructive reading your summary of Christopher Luxon’s responses to your three questions: 'didn’t say', 'wouldn’t say', 'didn’t address the question'. I'm also pleased you asked the 'feeling it' question, even if he didn't say. Considering he denied reading all those negative social impact reports in December 2025, I doubt it will be the lower-income groups feeling anything positive from the Coalition.
Lynn’s great photographic record preserves the moment in time. I also think it may make a great caption contest photo, but I digress.
Let’s see how Christopher Luxon looks, and what his body language says, during stand-ups at the National caucus retreat this week. Also, what is said and what isn’t.
Likewise Labour’s caucus retreat, if it is covered, or gets any positive airtime. Labour really needs to lift it's game and use everyone of those 290 days well.
The PM has said he will be at Rātana on Friday too. That will be interesting, and apparently we won't know where he will be on Waitangi Day, and will announce it late because 'security arrangements'.
Then we have the first sitting of Parliament next week.
2026 has started with a hiss and a roar.
It’s great to have you and your guests’ perspective on things. The Kākā, and the work you and Lynn do, is gratefully received. Looking forward to more of your analysis in 2026
C Luxon never had any vision for AotearoaNZ, any more than he had when CEO of Air NZ. There he presided over the Virgin Air Oz debacle and his main direction at Air NZ was - tighten spending, limit growth, 'fiscal responsibility'. Further, it was clear even then to Luxon's co-workers and execs that he had no understanding of NZ as a society. He is wholly a corporate man enamoured with USA businesses
I suspect many people, like me, are too depressed by the climate change prospects, not to mention the sliding away of international rule of law, to buy or sell anything. But maybe that’s just us green boomers.
everyday I wonder where we and the USAwould be if they'd had the guts to elect a woman POTUS - but we'll never know, it will take decades to un-do the damage he's causing.
Another micro‑piece of the jigsaw is also that once you have an economy where, for many owner‑operators, household housing equity is the main shock absorber and collateral pool, a stalled housing market plus high rates doesn’t just cool consumer spending, it helps put a lot of SMEs into “don’t grow, just survive” mode at the same time. Basically SMEs sit on top of that same structure as a big chunk of small‑business borrowing is still effectively “my house is the security, my household cashflow is the buffer”, so when the owner’s balance sheet and income are under pressure, their appetite and capacity to take on more risk collapses too - especially in low‑margin, domestic‑demand‑dependent sectors. So double whammy amongst some households: both the actual family and the business.
Excellent observation. IRD's crackdown is pushing many of those SMEs over the edge, in part because they can't easily draw down equity to pay the bill. Quite a few of the mortgagee sales are indirectly triggered by IRD.
National has done a terrible job and they probably know recovery isn't around the corner, but what choice do they have now except to double down and hope poor people continue their pattern of not voting?
Feels like Luxon has given up doesnt it? There was no vision, no passion, nothing to get behind. Does he actually want the job and do something with a legacy? Or is he happy to just do enough to scrape through at the election and essentially be nothing more than a footnote of history.
People are wanting more, they want real leadership and direction. Luxon's only real saviour right now is Hipkins and Labour. Because they are equally so far missing the moment to rise to the occasion.
The fact that National's first 'policy' of 2026 is a capulation to the auckland property sprukers which will further lock out young kiwis, says it all really. What a total waste of the last three years and likely next three years for the direction of our country.
He never really had any ideas or vision beyond what he took from the Cliffnotes of Ayn Rand and Peter Thiel.
When did he ever have an idea or a vision other than Nicola Willis' budget cuts? If he did, most of us missed it, woosh!
In Nicola Willis Luxon has one of the most incompetent finance minister for the last half century, and that says a lot !!
Agreed. Nicola Willis is the "The Liz Truss of the South Pacific".
What is worse to having an incompetent Minister of Finance, is having a delusional PM:
"Nicola Willis is the best Finance Minister New Zealand's ever going to have, she's an outstanding person, she's an outstanding person, she's an outstanding Finance Minister, Economic Growth Minister, she's doing an exceptionally good job in a very tough situation."
https://www.odt.co.nz/news/national/willis-best-finance-minister-nzs-ever-going-have-luxon-rnz
Thanks, Bernard. i think we're going to need your helpful analyses through this year more than usual. One question if you have time: your own views are pretty clear and that you don't believe that things will much improve on our current course. I hear that elsewhere too. Are there any respectable and objective economists who disagree and believe this is the right approach? Who? I'd like to follow up.
Not sure many agree exactly with what I'm saying, or proposing. Bits and pieces here and there.
The real driver of our economic performance for 2024 and 2025 is the flawed ideology being applied by this government of cutting back the public side of the economy - not realising or understanding that public spending is private sector income, or that we cannot thrive as a country without a strong public sector.
As the Monster of Finance is intending on tighter public spending this year it is inevitable that 2026 will not be the growth year that this deluded government expects, or at least is gambling on.
Keynes' General Theory was published 90 years ago but it seems that the coalition government hasn't read it yet (unlike the first Labour Government).
I also think of how much an influence the pay equity scheme may have had on the Aotearoa-New Zealand economy - they stole the money put aside for sucessful claims to fill the budget hole.
Had those claims with merit been allowed to conclude and been settled - most of that money would have been spent in the A-NZ economy - as was shown in one of the 3 pieces of supporting documentation "used" in the amended legislation. How much of a boost to our economy might this have been? Possibly not enough to counteract the deficit caused by the job cuts their rediculous austerity has created, but it would have helped more then landlords have lowered rents.
Luxon's speech-writer clearly lost track of time while on holiday and frantically photocopied a faded copy of a copy of a copy of a copy of one of his old Unilever "boredroom" speeches... Obviously, what with him having to squint to read the blurry LinkedIn-optimised verbiage on the copied-copy, Luxon must have failed to see that great 'cost-of-living' news for meth-heads (and their dentists)!
1. The recovery has arrived. 2. We need to move the increased numbers of homeless out of downtown Auckland.
Doublethink
Are they including the price of meth in the new CPI indexes to artificially lower our rate?
...But seriously, the cyclical economy will eventually get better. On the other hand, the effect of "that strategy (of tightening budgets- austerity, that) didn’t work in 2024 and 2025 to fire up the economy" will slow it down. Hopefully, voters this time will see a connection between budget cuts and outputs in health, education, housing and infrastructure.
I think it is no coincidence that high-tax nations, such as Nordic Europe, which spend more on health care and infrastructure, have higher growth, productivity, and quality of life than we do. And, of course, their high union participation helps keep wages above the rate of inflation.
We don't have a "cost of living crisis". We have an economy and government that depresses wages so they don't keep up with inflation, much less growth.
I note they are now talking about budget 'savings' rather than cuts.
When will they figure out that private money has run out (for the most part)? Are they really that blind to what is happening with wealth distribution across the world? The people who have the money now are not the same people as 20 to 40 years ago. 20 - 40 years ago, it was the average kiwi that had wealth; they were the people who cared about what was going on in this country. The people who hold the wealth now, a handful of kiwi's, the majority not New Zealanders, actually just don't care beyond their own purses.
Yes, they are that blind, caused by self-interest and 'I'm sorted'.
For many low income families who try to earn a bit more gross income- Luxon should acknowledge the impact of high effective marginal tax rates that destroy that very motive to earn extra and add to his cherished economic growth. He has made this problem worse in fact. While this year there will be a slight improvement in the threshold income for a family it is a drop in the bucket and is to be offset by an even higher rate of clawback of WFF (27.5%)- reducing incentives yet more, and creating more crippling debt to IR.
The threshold for repayment of student loans is frozen at an absurdly low income- imposing an extra effective 12 % tax on all income over just $24,128 per annum.
So a family who achieves the new WFF threshold of $44900 an extra dollar is taxed at 17.5%, ACC 1.6% student loans repayment 12% KiwiSaver, 3% repayment WFF 27.5% and possible 25% loss of the accommodation supplement or increase in income related rent --a tax of 86.6% leaving 13.4 cents in the hand--. If their extra gross income pushes them into the next tax bracket of 30%, their EMTR may rise to 100%. Nothing to show for their efforts. I fear Luxon doesn't understand this issue
Great point Susan.
they keep going on about our tax cuts - any tax cut most people received was completely un-done by increases in food, rates, insurances, electricity etc, etc.
Again, when you're on mega-bucks, & are sorted, your taxcut might have been useful, mine certainly was unremarkable against other cost increases.
Thanks for your analysis of our PM’s ‘Stale’ (sic) Nation speech, Bernard.
No need to apologise for yesterday. I still found your live stream told us more than we got from Luxon. In fact, even allowing for his business-type audience, what he didn’t say and include was just as educational as his turnaround-specialist MBA mumbo jumbo, and more so than what he did say. The muted audience reaction said it all.
I also thought it was instructive reading your summary of Christopher Luxon’s responses to your three questions: 'didn’t say', 'wouldn’t say', 'didn’t address the question'. I'm also pleased you asked the 'feeling it' question, even if he didn't say. Considering he denied reading all those negative social impact reports in December 2025, I doubt it will be the lower-income groups feeling anything positive from the Coalition.
Lynn’s great photographic record preserves the moment in time. I also think it may make a great caption contest photo, but I digress.
Let’s see how Christopher Luxon looks, and what his body language says, during stand-ups at the National caucus retreat this week. Also, what is said and what isn’t.
Likewise Labour’s caucus retreat, if it is covered, or gets any positive airtime. Labour really needs to lift it's game and use everyone of those 290 days well.
The PM has said he will be at Rātana on Friday too. That will be interesting, and apparently we won't know where he will be on Waitangi Day, and will announce it late because 'security arrangements'.
Then we have the first sitting of Parliament next week.
2026 has started with a hiss and a roar.
It’s great to have you and your guests’ perspective on things. The Kākā, and the work you and Lynn do, is gratefully received. Looking forward to more of your analysis in 2026
What, the National led cash pinata is over??? I've just invested in sandbags to keep the money-flood from coming in under the front door!!!
C Luxon never had any vision for AotearoaNZ, any more than he had when CEO of Air NZ. There he presided over the Virgin Air Oz debacle and his main direction at Air NZ was - tighten spending, limit growth, 'fiscal responsibility'. Further, it was clear even then to Luxon's co-workers and execs that he had no understanding of NZ as a society. He is wholly a corporate man enamoured with USA businesses
I suspect many people, like me, are too depressed by the climate change prospects, not to mention the sliding away of international rule of law, to buy or sell anything. But maybe that’s just us green boomers.
I find your comment ha ha funny. There is some truth in it that I can relate to. Everyday I wake up and Trump has got
some earth shattering idea.
everyday I wonder where we and the USAwould be if they'd had the guts to elect a woman POTUS - but we'll never know, it will take decades to un-do the damage he's causing.
Another micro‑piece of the jigsaw is also that once you have an economy where, for many owner‑operators, household housing equity is the main shock absorber and collateral pool, a stalled housing market plus high rates doesn’t just cool consumer spending, it helps put a lot of SMEs into “don’t grow, just survive” mode at the same time. Basically SMEs sit on top of that same structure as a big chunk of small‑business borrowing is still effectively “my house is the security, my household cashflow is the buffer”, so when the owner’s balance sheet and income are under pressure, their appetite and capacity to take on more risk collapses too - especially in low‑margin, domestic‑demand‑dependent sectors. So double whammy amongst some households: both the actual family and the business.
Excellent observation. IRD's crackdown is pushing many of those SMEs over the edge, in part because they can't easily draw down equity to pay the bill. Quite a few of the mortgagee sales are indirectly triggered by IRD.
This was very insightful. I'd like to see this shared a bit wider if you can
National has done a terrible job and they probably know recovery isn't around the corner, but what choice do they have now except to double down and hope poor people continue their pattern of not voting?
Unfortunately Labour are not giving them anything to vote for and Godsmith's electoral changes will disenfranchise 10s of thousands more.
If a CEO gave this speech and these answers while leading a company underperforming under their tenure, would you expect them to keep their position?