In our exclusive interview with Finance Minister Nicola Willis, we explore her views on debt, growth, and New Zealand’s economic future. From managing deficits to boosting productivity and tackling housing affordability, Willis outlines her government’s plan to build a stronger, more resilient economy.
Debt, Growth, and New Zealand’s Economic Future - Striking the Right Balance
Willis believes that government borrowing should be treated like household or business debt—taken on for major investments like roads and hospitals, but not for day-to-day expenses. She warns that New Zealand is currently “putting groceries on the credit card” with a $10 billion deficit, a situation that cannot continue indefinitely without risking higher borrowing costs.
The government’s goal is to return the books to balance within four years while maintaining investment in essential services. Excessive debt, she cautions, would leave the country vulnerable in the event of a major shock like a pandemic or earthquake.
Housing, Red Tape, and Unlocking Economic Potential
Housing affordability remains a core focus in New Zealand’s economic future. Willis emphasises that abundant land is not the issue – instead, restrictive planning rules and the Resource Management Act have constrained supply. The government is moving to replace the RMA entirely and simplify building consent processes, aiming to speed up development and reduce costs.
She argues that increasing housing supply will not only make homeownership more attainable but also strengthen community stability, education continuity, and long-term wellbeing.
KiwiSaver and Investing at Home
On KiwiSaver, Willis supports growing the national savings pool and enabling more investment in New Zealand assets, including infrastructure and major institutions like Kiwibank. While 40% of KiwiSaver funds are already invested domestically, she rejects the idea of mandating local investment, arguing that savers should have the freedom to seek the best returns.
She expects competition between providers will drive greater transparency, enabling members to choose funds aligned with both their values and financial goals.
Driving Export-Led Growth
Willis notes that New Zealand’s current recovery is being driven by exports rather than rising house prices—a positive shift that supports sustainable job creation and higher wages. She advocates for removing regulatory barriers that hinder innovation and productivity, highlighting sectors like technology, agribusiness, and mining as key growth opportunities.
Financial Literacy for the Next Generation
Willis is a strong advocate for compulsory financial literacy in schools, ensuring every young person leaves education with a working knowledge of money management. She believes skills like understanding interest rates, opportunity cost, and the value of saving should not be left to chance or reliant on parents’ knowledge. Equipping all students with these skills, she says, will help create more informed adults and allow for better peer-to-peer conversations about money.
Building New Zealand’s Competitive Edge
Looking ahead, Willis sees opportunities in high-value industries such as technology, agribusiness, and mining, alongside improved infrastructure investment. She stresses the importance of removing regulatory barriers to innovation, enabling businesses to scale and attract talent. Her vision is for New Zealand to be a place where it’s easier to start and grow a business than in competing markets like Australia, while maintaining the lifestyle and environmental advantages that make the country unique.
Key Takeaways:
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Government debt should fund long-term investments, not everyday expenses.
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$10 billion deficit requires a careful balance between spending and sustainability.
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Housing supply issues stem from restrictive rules and slow consents.
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40% of KiwiSaver funds are invested locally, with potential for more.
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Export-led growth is crucial for higher wages and a stronger economy.
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Removing red tape can unlock innovation in high-value sectors.
Next steps:
If you’d like to learn more, check out these other episodes below.
The Minister’s appearance is not an endorsement of any particular financial advice service or company.
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Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
