Figures show how many NCEA students achieved level 1 qualification last year and the Ministry of Justice has been encouraged to check its systems following a privacy breach.
Opinion by Matthew Hooton
Matthew Hooton has over 30 years’ experience in political and corporate communications and strategy for clients in Australasia, Asia, Europe and North America, including the National and Act parties and the Mayor of Auckland.
The Prime Minister is right not to go to Waitangi this year. Previous leaders have also marked the national day elsewhere.
There’s nothing to gain for Christopher Luxon personally, for National or for the Government being caught up in the Waitangi theatrics expected between Te Pāti Māori(TPM) and Act on February 6.
To the contrary, Luxon’s prime ministership surviving through 2025 and the Government’s re-election in 2026 both demand he strongly re-focus the agenda on the economy ahead of the so-called Māori calendar kicking off next weekend at Rātana.
We're going down, down, down, unless fierce competition forces many existing businesses to innovate, Matthew Hooton argues. Photo / Mark Mitchell
Once Act’s Treaty Principles Bill charade is over, Luxon will have the option of returning to Waitangi in 2026, positioning himself as a national unifier.
Beehive strategists know the overwhelming majority, including the median voters who decide elections, are desperately worried about the economic outlook: the world’s, New Zealand’s, and especially their own.
Luxon can leave it to Act and TPM to entertain the 8% of voters that, combined, they have so successfully wound up. The PM’s concern is with the 92% majority he will speak to in his State of the Nation speech next Thursday, primarily about the economy.
As Luxon would put it, he and the 92% are right to be “laser-focused” on the economy. Last year we had the worst economic downturn since the deep recession 35 years ago. Everyone hopes things will improve this year but vast domestic and international uncertainties remain.
Pre-Christmas forecasts suggested only modest improvement in the first six months of the 2025 calendar year, and even Treasury’s outlooks for the 2026 financial year and beyond were disappointing, with economic growth remaining well below pre-Covid levels.
Auckland Business Chamber boss Simon Bridges reminded us this week that as bad as the fiscal crisis is, the productivity and economic crises behind it are worse.
The financial markets have been downgrading New Zealand for several months.
Since October 1, the kiwi dollar has fallen 11% against the United States dollar.
That can partly be explained by the US dollar’s general strengthening, but our dollar was also down 6% against the trade-weighted index.
In practice, a falling dollar operates as a tax on consumers to subsidise tourism operators, farmers, and other export earners.
Both the de facto consumption tax and exporter subsidy are undoubtedly needed, with our trade deficit still above 2% of GDP and current account deficit well over 6%.
But no one should think a falling currency is anything other than us all getting poorer together.
Nor should we expect much help from the international situation.
Nobody should be fooled into thinking a falling currency is anything other than Kiwis all getting poorer together, Matthew Hooton argues. Photo / John Weekes
Tariffs imposed by small economies, like New Zealand, are paid entirely by their own consumers.
But tariffs imposed by large economies, like the US and China, can affect the world price and so be partly paid by producers from the countries they import from, including New Zealand exporters.
There’s no reason New Zealand would be excluded were US President-elect Donald Trump to follow through with his promise to impose 20% tariffs on everything imported into the US.
More disastrous for New Zealand would be the consequent global trade war finally collapsing the World Trade Organisation rules Trump and President Joe Biden have so undermined since 2017.
Yet Trump needs some tariff revenue to keep America’s fiscal deficit under a modicum of control.
Since he’s also promising more tax cuts, and even the elimination of federal income tax, yields on 10-year US government bonds have already risen from 4.2% in early December to 4.8%.
Analysts believe 10-year US bond yields reaching 5% would trigger a global sharemarket crash.
There’s little political will to prevent that in the US, which only narrowly escaped a government shutdown four days before Christmas.
Elon Musk, Vivek Ramaswamy and Katie Miller have their work cut out if their new Department of Government Efficiency (in fact just a much-less powerful White House commission) is to find US$2 trillion in annual savings. Musk promised to reconcile Trump’s promises, including tax cuts and further military build-up.
The economic outlooks in the United Kingdom and France are worse. Things are far from rosy in China, Australia, Japan, and South Korea, which with the US are our top five export markets.
Domestically, non-tradeable inflation remains stubbornly high. The falling dollar is increasing local prices of both imports and products we export, including food.
Interest-rate cuts here and abroad may happen more slowly than hoped before Christmas.
Nicola Willis’ debt-servicing costs look set to be higher than hoped, with our 10-year bond yields already creeping up from 4.4% to 4.8% this year. Willis’ budgeting relies on them being back down to 4.4% this autumn.
We can’t wait for a falling dollar and growing export demand to paper over our productivity crisis that governments this century, both red and blue, have failed to take seriously.
Successive governments have made things harder for business in general to thrive, but their corporate welfare and regulatory indulgence schemes have made it easier for favoured firms to maintain their position.
For an economy to become more productive, it should be the other way around: Governments should make the regulatory environment easier for business-in-general, while fierce competition should make things harder for existing businesses, forcing them to innovate.
So far, the Luxon Government has maintained the failing approach.
Proper resource management reform to make things easier for business-in-general remains a long way off, as Chris Bishop focused in 2024 on his fast-track regime to make things easier for a handful of favoured firms, often politically well-connected.
Even then, it remains unknown how many chosen projects will in fact be consented under the fast-track law in the months ahead.
Corporate welfare and regulatory indulgences for a favoured few risk making them lazy while telling their potential competitors they may as well give up.
Consistent with Bridges’ urging on Wednesday, Luxon is picked to outline next week a much bolder, more urgent and more comprehensive microeconomic reform programme than was evident in 2024; one benefiting business-in-general rather than specific businesses with the best lobbyists.
On this, his leadership, his Government, and the country’s economic destiny depends.
Matthew Hooton has over 30 years’ experience in political and corporate communications and strategy for clients in Australasia, Asia, Europe and North America, including the National and Act parties and the Mayor of Auckland.
