Finance Minister Nicola Willis channels former US Treasury Secretary Janet Yellen

Responding to today’s reporting that Minister Willis expects the current rise in inflation to be "a blip", Taxpayers’ Union spokesperson Tory Relf said:

“Minister Willis is sounding a lot like former US Treasury Secretary Janet Yellen, who dismissed rising inflation under the Biden administration and got it completely wrong. Minister Willis’ claim that the increase is mainly due to international factors downplays the domestic pressures her Government can actually influence.”

“As Kiwibank recently noted, it is the heat in domestic inflation that is most disappointing. High electricity prices driven by a cosy power sector oligopoly, and grossly excessive local government rate rises are major contributors. The Government knows this, but its responses have been ineffective or delayed.”

“The Government’s excessive spending is also adding fuel to the fire. Continuous borrowing is building a mounting debt pile, with Total Crown borrowing now nearly $2 billion a month. Financial markets are already signalling expectations that the Reserve Bank may need to bring forward interest rate hikes later this year. Mortgage rates have already started rising on that basis, and economist Brad Olsen has speculated the Reserve Bank could even lift rates as soon as May.”

“Budget 2026 is Minister Willis’ last real chance to show spending restraint. Continued failure to rein in government spending will cement a record of fiscal ill-discipline. Claims of a surplus at the end of every forecast period will keep losing credibility, and international credit ratings agencies will take notice.”