National’s Nicola Willis and Labour’s Barbara Edmonds lay out their plans for the economy

As the political choice for New Zealand nears, National and Labour's finance spokespeople went head-to-head laying out their thinking on the economy, clashing over inflation and who really understands the cost-of-living crisis. 

National finance spokesperson Nicola Willis, speaking to the audience at journalist Richard Harman’s Politik election summit (with Labour finance spokesperson Barbara Edmonds standing at the back listening), took a swing at Labour’s core Crown expenditure and revenue pledge of 33% for both, and to return employment to the Reserve Bank’s monetary policy mandate alongside inflation targeting.

Willis said the dual mandate had led to “confused decision making by the Reserve Bank during the Covid-19 period”.

She described the period as having “levels of overstimulation to the economy that not only led to an asset price bubble, which has been very acute in its deflation, but also led to a period of very high inflation and interest rates - very dramatic - over a short period of time.”

National’s proposition at the election for New Zealand’s economy comprised of continuing their fiscal and monetary policy foundations, Willis saying, “this is no time for voodoo economics.”

“The second is that we must do more as a country to encourage investment, to increase our capital intensity, therefore our productivity, and to encourage more saving for the nation.”

The third was to “continue the mission to reduce red tape” and also “take very seriously the challenge of educating our kids for a modern economy and a volatile world, and finally, we need to deliver the infrastructure needed for a growing and prosperous nation.”

“The work of our first term of government has been about fixing some basics across each of those themes, against the backdrop of what was a very difficult situation that we inherited, and against the backdrop of a number of challenges in a world that is changing fast.”

Purchasing power a focus for Edmonds

During her speech, Edmonds said the cost of living for her “isn't just about bringing inflation down; it's actually around purchasing power.”

“If wages and income stay up to date with inflation, people have the purchase power to be able to buy the things they want,” she said.

“As inflation bites and as wages drop, they have less discretional spending, less decisions that they can make. This election will ultimately be about speaking to the large majority of New Zealanders when the cost of living is the number one issue.”

Edmonds said underlying issues included lagging productivity that came from New Zealand’s geographical place in the world and lack of competition such as in the supermarket sector.

“So ultimately, how do we support small businesses? Two things that we have announced. One is increase obviously the GST threshold…The second thing that we've looked at is around the immediate asset threshold.”

Edmonds said the public would see her and Willis “spar over the election very respectfully.”

“But we cannot discount those doors that you knock on and when you speak to people on the ground. I can't ignore that as the finance spokesperson. I don't live in a community where there are $2 million dollar homes around me. I live in a community where there are state houses."

“I drive past, and a state house right next door to me… it's like right in my face every day when I wake up that this is the reality for a lot of people.”