The economy has ‘had the stuffing knocked out of it’. Here are your thoughts

Thursday, 18 September 2025

New Zealand’s economy has shrunk by 0.9%, a blow that Finance Minister Nicola Willis says was the result of a grim national psyche following US President Donald Trump’s tariffs.

The decline in economic activity was worse than major bank expectations of around 0.4%, but some industries - including electricity, water, waste and gas services - bucked the trend.

Willis said the economy “suddenly had the stuffing knocked out of it” by the US tariffs, while Labour’s deputy leader Carmel Sepuloni said Willis should be “ashamed” of her record as economic growth minister and take responsibility.

Here’s what Stuff readers had to say about the GDP figures:

Pantherus: I’d be happy to focus the blame on international circumstances, except when the current government were in opposition they gave no such clemency to Labour for the international circumstances that THEY faced (such as a world-wide pandemic). So they should be held to the same standard that THEY held the last government to.

StephenA_115: National came in and started austerity and completely flat-lined the economy and they should have known what the outcome would be considering their economic genius.

DMart: Voting for Labour/Greens next year would be like having to choose between a getting your finger tip cut off or your leg amputated, and choosing the leg amputation.

Sure_you_do: How do all those people who believe that National are better for our economy feel now? Utter rubbish… they are the biggest economic vandals in our history… and if they try blame overseas conditions like tariffs then they can never pretend Labour didn’t have to deal with a pandemic.

Warren Murray: It’s not great, but putting this on National ignores the legacy of US tariffs that has affected many and Labour’s time in office. They are the real vandals.

Bossy1: So is Willis now saying Trump’s tariffs are having a bigger impact on the NZ economy than Covid? She doesn’t appear to know what she is doing.

Nuck: It’s almost like ripping spending out of the economy overnight had a massively enduring negative effect. Who’d have thought?

Jeff_J54: I love when there are any positive results they come out saying “see our policies are working”. And if it is negative they blame the previous government and say it will take time for our changes to take effect. You can’t have it both ways.

Clive Ireland: Of course the economy is going nowhere. This Government has done nothing [other] than continuing to look in the rear mirror and blame everything and everyone for their short comings and lack of inspirational ideas.

Casdone: Our immediate post-Covid economy was a little bit like a resort holiday, where you eat and drink whatever you want and put off worrying about your waistline and wallet until you get home. But at some point the party has to end and the excess needs to be paid for.

High Hopes: So this Government’s decision to massively cut spending on construction/infrastructure last year is having its *intended* consequence. Hence the massive spending this year, just in time for next year. Call me a cynic…

AndrewM_1421: I’m sure Luxon will be “comfortable” and “relaxed” about today’s GDP figures. Meanwhile his attempt at growing parts of the NZ economy is working a treat with unemployment, homelessness, food and electricity prices, government debt and landlord bank accounts all showing double digit gains since coming to power.

DonF-35: Historic data, what’s happening now is more important.

DerekP_1: Funny how it’s never her fault, it’s either Labour’s fault, the USA tariffs’ fault or somebody else’s fault, never hers!

HeatherD_110: Nice deflection Nicola until you look at the GDPs of other comparable countries who where hit with those same tariffs many of which are higher than NZ’s! And remembering the political response at the time was we were in a better position than many of those other countries because NZ’s tariff was lower and thus created “opportunities” for NZ.

Rongoboy: So Labour would fix the economy, how? They’ve got no policies and if they (necessarily in coalition with the crazies in the Green & Maori parties) revert to the money-spraying policies of their 6-year failure government, things would get much worse.

AndrewG_279: Funny that international pressure affects this government’s performance, but according to them it didn’t affect the last government’s. It would be nice to have politics without the spin so we know real facts.

Sawdoctor: This Government needs to man up and accept that they have caused with their policies have increased the following: Unemployment, homeless, inflation have increased. Also over 2200 business have closed and rising.The number of different excuses put forward by Nicola Willis is astounding. A lot of this has happened in the last two years. Meanwhile tax breaks for farmers, landlords, investors and tobacco companies and an 80% rise in board fees. Guess who will probably end up on a board after his time is finished. Mr Rich and Sorted.

Rex: They have had two budgets. They have chosen tax breaks for the wealthy and for corporations. For the rest of us, they have chosen austerity. This is classic play stupid games, win stupid prizes. Hopefully this will be bust the “better economic managers” myth. Why actual economic data has never shifted that whack perception I will never know but it’s being laid pretty bare with this lot.

Boringfactguy: Electioneering 101 would suggest that it’s important to deliver economic improvement in an election year, so a more positive phase is imminent.

Carl Lea: It’s a mess. The problem is that if the government did what was needed to fix it. No one would vote for them.