Moody’s has placed New Zealand’s credit rating on a negative outlook, underscoring growing concern about the Government’s worsening fiscal position.

Responding, Taxpayers’ Union spokesperson Tory Relf said:

“Minister Willis is right to say this is another warning that New Zealand can’t afford to simply spend more and borrow more. The problem is that is exactly what she is still doing.”

“Minister Willis got her first warning on 21 March this year when Fitch moved New Zealand to a negative outlook. Since then, government debt has grown by almost $2 billion and the National Debt Clock is forecast to hit $300 billion before the election. Where is the fiscal discipline Minister Willis talks about?

“Blaming global uncertainty is a convenient distraction for Minister Willis. Moody’s is pointing at Wellington. Despite the rhetoric, Government spending remains higher than under Grant Robertson, borrowing continues to climb, and there is no sign of a surplus this decade.”

“Credit rating agencies do not act on vibes. They follow the numbers. Being placed on negative watch is a signal to investors that New Zealand is becoming a riskier place to lend to, which ultimately means higher interest costs for taxpayers.”

“Clinging to the AAA rating while being put on negative watch is like celebrating while the warning lights are flashing. If this is what fiscal discipline looks like, it is no wonder Moody’s is losing confidence.”

“This must be a wake-up call ahead of Budget 2026. Until the Government matches its rhetoric with real spending restraint, more warnings, and eventually a downgrade, are inevitable.”

Responding to Treasury figures showing the Government’s deficit is slightly smaller than forecast, Taxpayers’ Union spokesperson Tory Relf said:

“These figures are genuinely encouraging for taxpayers, especially young New Zealanders who will inherit this debt.”

“But let’s be clear, better than expected is not the same as balanced. The deficit for the seven months to January is still $6 billion, nearly $3,000 per household. Deficits remain, debt and spending are both still too high, and structural pressures persist. The Government cannot rely on temporary tweaks or lucky timing to claim progress - especially given the potential for economic pressures with conflict in the Middle East.”

“Budget 2026 is the real test. Ministers must use this momentum to lock in serious fiscal discipline, slash wasteful spending, and implement real structural savings. They need to show taxpayers a credible plan to reduce deficits and debt, not just optics.”

“If they fail, today’s small improvements will mean nothing, and ordinary New Zealanders will still be left footing the bill for years to come. The pressure is on: Budget 2026 must deliver.”