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Are you better off under this National-led coalition government? We’re halfway through the three-year election cycle, so it’s the question the government will start to pay more attention to because come the 2026 election, it’s the only question that will matter. Right now, the answer is unlikely to be a resounding “yes” – as shown by recent public opinion polls that make tough reading for National.
Unemployment is up to 5.1%, the highest it has been since 2020. Unemployment among Pacific people is more than double that, at 10.5%, and the Māori unemployment rate of 9.7% is coming close to it. It’s worse if you’re aged 15-19, where the youth unemployment rate in December 2024 was 23.8% - it’s highest in more than a decade.
But the government had something to celebrate this week with news our GDP (Gross Domestic Product) rose 0.7% in the December 2024 quarter, following a 1.1% decrease in the previous quarter. This was stronger than most economists predicted, and Finance Minister Nicola Willis was quick to seize on it as proof the economy has turned a corner.
It might make for a happier headline, but let’s remember our economy is still sluggish and remains 1.1% smaller than it was in 2023.
National will be celebrating that after a slow and unsure start to the year, Prime Minister Christopher Luxon has grabbed the headlines with his investment summit and trade trip to India, where he succeeded in getting a potentially lucrative free trade deal back on the table. New markets matter for exporters and with the prospect the current $1.54 billion in goods sent to India each year could grow 10 times, our exporters could do very well.
But how the economy continues tracking during the next 12 months is critical to this government’s ability to head to the polls next year saying, ‘See, we told you we would get things back on track.’ For now, though, I’m picking the party hierarchies – especially National’s – will remain nervous.
With economic growth comes jobs and pay rises, and that’s what National desperately needs to point to. That will give a boost to business and consumer confidence, too, both of which remain low. Right now, it seems like confidence is shot, with businesses reluctant to spend in case it backfires and consumers still worried about the cost of living and job losses.
If unemployment starts to drop, if confidence grows along with capital and expansionary ideas, then we might see the benefits flow to everyday Kiwis. It will also give us a chance to work out at election time if Luxon and Willis talked a whole pile of nothing or whether it was a carefully laid plan that actually worked.
In the meantime, there’s just eight weeks until Willis’s second budget and that will be crucial in setting us up for those additional jobs and pay rises. It mustn’t just be blather about “supercharging the economy” or “growth, growth, growth”; it needs to lay down concrete plans that will lead to results voters can see and feel in the back pocket. Only then will we feel better, and more hopeful that we’re making progress and there are opportunities ahead.
The problem for Luxon and Willis is that they didn’t lower expectations during the last election campaign. Instead, they raised the stakes by saying only they can get the economy back on track, and right now, it looks like the train is still derailed. And the crew trying to get it moving again are struggling to find ways to make that happen. It’s always best to under-promise then over-deliver, but promises are the stuff of a successful election campaign, aren’t they?
If it can’t campaign on economic recovery, what else could our governing coalition look to? I’m betting it will turn its sights on Te Pāti Māori, which appears to be using Parliament as a stage to act on, to drive party membership through confrontational words and deeds, dismissing Pākehā New Zealand and highlighting the hangover of colonisation and continued marginalisation of its people. For evidence, it points to the likes of Act’s Treaty Principles Bill proceeding to select committee stage.
To me, the rhetoric is more aggro than advancement and more stirring than offering solutions. At some stage, Te Pāti Māori will have to work out more definite policy because I don’t know what it stands for other than hearing talk about a Māori nation. What even is that? How would it work? Could it be even more divisive than the Treaty Principals Bill?
Latest poll results show Labour, the Greens and Te Pāti Māori could form a governing coalition, but has Te Pāti Māori become so extreme it could put voters off ticking Labour or the Greens? That could be one of Labour’s biggest threats to taking office.
So, there could be two approaches available for the Luxon-led government next year: campaign on a stronger economy providing results for Kiwis, or if that’s not available, find the biggest campaign distraction and inject fear into voters by highlighting “haters and wreckers” in Te Pāti Māori whom Labour refuses to call out. Of course, the latter option is highly divisive and threatens further social disruption.
Still, the central question we ask ourselves will remain: Are we better off? For me, the answer is no. Honesty and authenticity are important to me, so I’ll be frank and say it’s not all roses. I suspect that’s the case for many, many Kiwis.
Like many, I’ve gone from a full-time job to contracting and taking up whatever other work – MCing, writing this column among them – that I can. There are no sick days, holiday pay, or a company’s 3% KiwiSaver contribution, and for six weeks during summer, when the media goes to sleep, I wasn’t paid a cent. It was a shock to the system, especially with a 4WD playing up and costing more than $10,000, but that’s probably the type of scenario more and more Kiwis have become familiar with.
By not getting KiwiSaver contributions, I either have to put in more voluntarily or face the impact in retirement, because without the employer contribution, I lose thousands in compounding interest returns.
This has been playing on my mind since my listener.co.nz column last week about the need for the government to supercharge KiwiSaver, where I highlighted a social media report that a teaching couple were able to retire with a combined $2.5 million thanks to Australia’s far more generous compulsory retirement saving scheme.
I received an email from teacher Simon Vincent, a New Zealander living in Brisbane whose wife is also a teacher. Aged 50, their savings are $750,000. By the time they’re 65, they, too, will have accumulated $2.5m, maybe more. He earns $140,000; here he would earn $95,000.
So, forget gender and identity politics, cast aside the investment summit and fast track talk, even the treaty principles debate, and put to one side the farcical roll out of the $3-a-head, prison-like, food in schools’ programme. While all those things matter individually, they’re not crucial when it comes to how you cast your vote.
The only question that really matters, and the central one families will have a pretty strong view on, is whether they’re better off. Is that progress obvious in everyday life? Our government can tell us that we’re better off, but the verdict doesn’t rest with it. Ultimately, if you answer yes, then National gets returned. But if the answer is “no way”, then it’s game on.
