Merchants of misery? Or just a reality check for National
Sunday, 24 August 2025
Tracy Watkins is editor of The Post and Sunday Star-Times.
OPINION: Finance Minister Nicola Willis wants us to stop listening to the “merchants of misery and doomsayers” talking down the economy. It sounds like a line polished by her advisers in a backroom somewhere – and that’s where it should have stayed.
Her Government campaigned on its economic credentials. It put the economy at the centre of its manifesto. It’s too soon to ask us to stop talking about one of the deepest and most prolonged recessions in modern times.
Yes, most forecasters see better times ahead. But better doesn’t mean rosy, and predictions of turning a corner have fizzled before.
Right now, house prices are still 20–30% below their 2022 peaks in the main centres; it might only be paper wealth, but homeowners are feeling poorer.
Thousands of jobs have gone. High-profile firms have folded. The “doom merchants” aren’t just the Opposition or the media – they’re business owners, nurses, tradies, parents and professionals who feel worse off than five years ago.
Economist Tony Alexander’s latest survey found business sentiment “depressed”, and the sector deeply concerned about the economy. More tellingly, what worried them even more than the economy was the possibility of a change in government.
That businesses are even beginning to think of the seemingly implausible - that this could be a one term Government- should be a flashing red light for National.
As Amelia Wade reported for our cover story last week, even National’s traditional allies are frustrated enough to speak out. They worry that National’s seeming strategy of waiting and hoping that lower interest rates will eventually kick in and deliver an economic change in fortunes before the election is not enough.
They fear that National will hand the next election to Labour on a plate.
One-term governments are rare – New Zealand voters historically give new administrations a fair go. But these are not ordinary times. Since Covid, political rules have been upended.
Donald Trump’s triumphal return, after ousting a one-term Democratic president, was an aberration, but given the volatility of US politics could become the norm.
Here, the polls now show the centre-left and centre-right blocs neck and neck, with the minor parties holding the balance of power. Neither major party has the support of much more than a third of voters.
It’s not completely inconceivable - though still not likely - that the next election may return a deeply unpopular government that was tossed out only two years ago in a historic drubbing.
That alone should trouble National. Labour has clawed its way back despite looking and sounding much like the Government that got voted out.
Chris Hipkins has kept a low profile, his shadow Cabinet even lower.
Labour is yet to present any new ideas on the economy. There have been none of the big hits that boost Opposition morale; they haven’t bested the government on its economic management because so far they haven’t put up any plans for the economy themselves.
Yet they are back in the race.
That may change next year, when they put potentially polarising policies like a capital gains tax or wealth tax on the table.
But for now, the old saying still holds true - Oppositions don’t win elections, Governments lose them. National should have that pinned on the wall of every MP and minister’s office.
And if National did suffer the rare fate of a one-term government? Labour would inherit the same deep seated economic problems – but with potentially unpopular solutions on the agenda.
The Greens and Te Pati Māori, like ACT and NZ First, would hold a strong hand. Hipkins would risk being upstaged just as Luxon has been.
A one-term government followed by another one-term government? Let’s hope not.
It’s a recipe for instability and economic stagnation - and a cycle that may be difficult to break.
What do you think? Email sundayletters@stuff.co.nz. Please include your full name and address.