Nicola Willis Highlights Success in Curbing Unsustainable Spending Increases

The Finance Minister reiterated the Government’s overarching goal of fostering economic growth to benefit all New Zealanders.

Finance Minister Nicola Willis has announced a significant achievement in controlling public spending growth, signaling the Government’s commitment to fiscal responsibility and economic stability. The latest Financial Statements for the five months to November 2024 reveal that public spending increased by only 1.9% compared to the same period in the previous year, a stark contrast to the 9.8% increase recorded under the previous administration.

In her statement, Ms. Willis highlighted the drastic reduction in public spending growth as evidence of the Government’s prudent financial management.

“In the previous government’s final five months in office, public spending was almost 10% higher than for the same period the previous year. That level of increase is completely unsustainable and contributed to the Reserve Bank's decision to hike interest rates to combat inflation,” she explained.

By contrast, the current Government has taken decisive action to restore respect for public money.

“The steps we’ve taken to curtail wasteful spending are working. Government spending for the equivalent period last year was less than 2% higher than the previous year. This is a significant turnaround,” Ms. Willis said.

Investing Wisely, Avoiding Waste

While committed to improving public services and future investments, Ms. Willis assured taxpayers that wasteful spending on unfeasible schemes would not be tolerated.

“This Government is dedicated to unlocking New Zealand’s potential by growing the economy and providing greater opportunities for businesses, households, and individuals. We won’t squander public money on impractical projects that only burden families and businesses with additional costs,” she emphasized.

Strong Fiscal Performance in Line with Projections

The Financial Statements show that the Government’s financial performance is aligned with projections from December’s Half Year Economic and Fiscal Update. Key figures include:

• Core Crown revenue: $54.9 billion, in line with forecasts.
• Core Crown expenses: $57.8 billion, $200 million lower than forecast.

Ms. Willis credited the disciplined fiscal approach for these results, emphasizing that prudent expenditure management supports long-term economic growth.

Focus on Economic Growth and Stability

The Finance Minister reiterated the Government’s overarching goal of fostering economic growth to benefit all New Zealanders.

“Our focus is on building an economy that thrives, creating opportunities for businesses to grow, and improving household stability. Responsible financial management is a cornerstone of this approach,” she said.

Looking Ahead

With spending under control, the Government aims to invest in projects that provide tangible benefits, including infrastructure, education, and innovation. The emphasis on fiscal discipline reflects a broader strategy to bolster New Zealand’s economic resilience and ensure sustainable growth.

“By managing public finances responsibly, we’re setting the stage for a stronger economy that delivers for everyone,” Ms. Willis concluded.

As New Zealand moves forward, the Government’s fiscal strategy highlights its commitment to balancing economic growth with accountability, paving the way for a prosperous future.