An improving economic outlook could give National fresh momentum – but it may be too little, too late, writes Catherine McGregor in today’s extract from The Bulletin.
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Right bloc gains amid Te Pāti Māori collapse
The latest 1News Verian poll may be remembered for Te Pāti Māori’s dramatic fall – from a record high of 7% last December to just 1% now – but the even more consequential story for 2026 could be the seven-point swing from the left bloc to the right. National rose to 36% (up two points) and Labour lifted three to 35%, yet the left bloc as a whole shrank sharply as the Greens tumbled four points to 7% and Te Pāti Māori slumped to its lowest result in five years. On these numbers, National, Act and New Zealand First would secure 67 seats, enough to govern comfortably. With economic pessimism down 9 points to 30% and optimism up 6 points to 42%, the poll sends the government into the election year with the wind at its back.
Green shoots emerging
That shift is reinforced by ASB’s new quarterly economic outlook which says the recession-scarred economy has finally begun to turn. Chief economist Nick Tuffley said the bank is “seeing clear signs that the recovery is gathering pace”, pointing to rising consumer spending – “especially on big-ticket items like cars and electronics” – and to rural incomes that are holding strong. Lower interest rates are starting to filter through as people refix their mortgages, and job ads are up. ASB expects growth to accelerate above 2.5% in 2026, with households gradually regaining the ability and willingness to spend.
For National, a narrative that the economy is finally healing is a big political win. After two years shaped by inflation, falling real incomes and rising unemployment, the first clear signs of improvement finally give it a positive story to tell.
Will it be enough?
But not all economists are convinced the good news for consumers will translate into political reward. In the Herald (paywalled), Cameron Bagrie argues the government still faces deep structural challenges that risk cancelling out the effects of any recovery. Inflation, though easing, continues to feel painfully high for households, and Bagrie notes the government has yet to secure a meaningful win on competition policy to show it is actively lowering prices. The public remains grumpy, he says, and weak productivity and high living costs mean the economic turnaround is unusually fragile. “The economy might not be enough to rescue this Government,” Bagrie warns.
To improve their electoral prospects, he argues, ministers need to think bigger than “taglines and slogans” and instead “be bolder with major reform to lift living standards”. The danger is that modest improvements in headline numbers do little to improve how people actually feel about the economy, weakening any impact come election day.
‘Rotten timing’ for an election
Even if the economy is improving, election-year dynamics may put a brake on the momentum before voters can feel it. Interest.co.nz’s David Hargreaves argues that “having an election in the coming year is rotten timing” for the economy. What businesses and individuals need most, he says, is certainty – and an election, particularly a close one, guarantees the opposite. After years in the economic doldrums, consumers have become deeply cautious; they need stability in order to start spending and investing again.
There’s a “chicken and egg” aspect to the way the economy and the election interact, Hargreaves says: for the government to win reelection, there would need to be “a pick-up in the economy [showing] through strongly enough, early enough”, while “if the election next year is close … we could see businesses hesitant to spend”. In his view, the timing could scarcely be worse: “There’s never really a right year for an election … but 2026 is looking very much like the wrong one.”
