Finance Minister Nicola Willis Emphasizes Fiscal Discipline Amid Global Economic Volatility

Global economic volatility makes the Government's programme of fiscal consolidation more important than ever, Finance Minister Nicola Willis says.

Fitch Rating's decision to place New Zealand’s AA+ long-term credit rating on negative outlook is a reminder of why fiscal discipline is so important.

Over the past two years, this Government has pursued a balanced fiscal strategy - lifting investment in frontline services like health, education, and law and order, while charting a credible path back to surplus. That has required hard decisions: $43 billion of savings across the last two Budgets, with further savings planned in Budget 2026.

The Government remains committed to achieving its three fiscal goals – reducing spending as a proportion of GDP, returning the headline operating balance measure to surplus and bending the debt curve down.

Treasury's preliminary economic forecasts — prepared before the latest volatility in the Middle East — showed New Zealand's economic recovery gaining momentum, with growth of around 3 per cent by early 2027 and a corresponding improvement in revenue that would support a more positive fiscal outlook Those forecasts will now need to be revised. Energy market disruption adds real uncertainty, and that is precisely why careless spending is off the table.

My focus remains on a balanced approach: investing in frontline services like health, education and law and order and keeping debt at prudent levels.

Increasing borrowing, spending and debt, as some political parties have proposed, would damage New Zealand’s reputation for responsible fiscal management and lead to increased borrowing costs for all Kiwis.