Nicola Willis talked to Prime Minister about keeping her growth job

Thursday, 18 September 2025

The Finance Minister has reacted to the 0.9% GDP contraction by saying the economy “suddenly had the stuffing knocked out of it” by the US tariffs.

Finance Minister Nicola Willis says she talked to the prime minister about keeping her economic growth portfolio after it was revealed the economy has stood still since she took on the role.

A 0.9% economic contraction in the June quarter was a far worse deterioration than commentators were expecting.

Willis said Prime Minister Christopher Luxon had absolute confidence in her.

She took on the new portfolio at the start of this year as Luxon talked up a 'year of growth'.

But following 0.9% growth in the first quarter of 2025, the economy went backwards by 0.9% in the second ‒ meaning the economy essentially stood still.

Willis has placed much of the blame on US President Donald Trump’s Liberation Day tariffs.

During the first three months of the year, things had been looking positive, Finance Minister Nicola Willis said.

'It's true, Trump disrupted my momentum,' she told reporters on Thursday.

Trump’s tariffs were announced on April 2, with a 10% tariff on New Zealand imports added not long afterwards.

“The second quarter of the year started the day before United States tariffs were announced,” Willis said. “The economy had been growing strongly in the previous six months, but suddenly had the stuffing knocked out of it.”

Asked why New Zealand had been hit harder than other tariff-affected countries whose economies continued to grow, Willis said uncertainty had particularly discouraged local investment.

Labour says Luxon and his Government are to blame.

“My view is that the Trump tariff announcement had an outsized effect on the New Zealand psyche and people's willingness to take the risk of greater investment,” Willis said.

Adding to the issues, the country’s debt was the highest it had been in “many, many, many years” and it was her Government’s responsibility to get the books back in balance.

There was no getting away from the fact that the June quarter was a hard three months, but that was not unexpected, Willis said. “I think many New Zealanders could have already told you that was a very difficult period for the economy.”

But Labour’s Barbara Edmonds noted that other countries subject to the tariffs had grown over the same period - , with Australia by 0.6%.

“They will blame everyone else for their failure and say they just need more time. But the truth is clear: under Christopher Luxon, New Zealand is heading in the wrong direction,” Edmonds said.

“Christopher Luxon stood in front of New Zealanders in 2023 and said his business experience would fix cost of living and the economy. Instead, he has failed dramatically.”

In the same period, Canada’s economy shrank by 0.4%, China’s grew by 1.1%, the EU’s grew by 0.2%, and the UK’s grew by 0.3%.

Since the June quarter the US tariffs have stepped up again, to 15%.