A woman with wavy brown hair in a navy blazer and red top speaks in front of a bright blue background, next to a vertical orange banner reading “THE BULLETIN.”.
The Taxpayer’s Union has launched a campaign against Nicola Willis’s management of the economy, arguing she has let borrowing balloon and failed to rein in spending. (Photo: Hagen Hopkins/Getty/The Spinoff)

The Bulletinabout 9 hours ago

Is Nicola Willis losing the right?

Contributing writer
A woman with wavy brown hair in a navy blazer and red top speaks in front of a bright blue background, next to a vertical orange banner reading “THE BULLETIN.”.
The Taxpayer’s Union has launched a campaign against Nicola Willis’s management of the economy, arguing she has let borrowing balloon and failed to rein in spending. (Photo: Hagen Hopkins/Getty/The Spinoff)
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A war of words between the finance minister and Ruth Richardson has forced open long-simmering tensions over the government’s economic direction, writes Catherine McGregor in today’s extract from The Bulletin.

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A showdown in the making

Nicola Willis’s offer to debate former National finance minister Ruth Richardson “anytime, anywhere” has set off one of the more unlikely political storylines of the year. After initially laughing off the idea, Richardson has now agreed to a face-off once Treasury releases next Tuesday’s Half-Year Economic and Fiscal Update. Willis challenged one of the parliamentary media scrum to host the debate, prompting The Spinoff’s own Toby Manhire to make an early offer. He has suggested the pair settle their differences on a “bonus seventh episode” of Juggernaut 2, his hit podcast revisiting the Bolger–Richardson era.

The exchange coincides with the Taxpayers’ Union – of which Richardson is chair – officially launching its pressure campaign against Willis today. The campaign will encompass advertising and social media, with an insider assuring Herald commentator Matthew Hooton it will be “the biggest and toughest campaign ever launched against an ostensibly friendly target by the union” – a sign of just how dramatically relations between Willis and the right-wing lobby group have deteriorated.

The pressure campaign intensifies

The Taxpayers’ Union’s barrage against Willis has been escalating for months. Its criticisms include that Willis has borrowed more than Grant Robertson, failed to rein in spending, relied on a “newly invented” OBEGALx surplus measure, and presided over a bureaucracy that, the union argues, has barely shrunk.

According to Hooton’s account, TPU leaders insist they “have searched their consciences and feel they have no choice but to turn on Willis”, given their “robust attacks” on Robertson during Labour’s “fiscally vandalous” post-Covid years. But The Post’s Andrea Vance, writing in early September, suggested principle might not be the only motivation. According to Vance, some insiders told her the attacks doubled as political manoeuvring designed to bolster Christopher Luxon’s shaky leadership by framing Willis as the weak link. The union’s co-founder Jordan Williams has denied this emphatically – “There has been no discussion internally to make it personal”.

Dividing lines on the right

The argument on the right isn’t just over the government’s direction, but who is responsible for its perceived failings. As Hooton explains in his (paywalled) Herald column, one camp faults Luxon, pointing to his “unilateral tax-cut promises” in January 2022 which set expectations Willis was later forced to temper. They argue Willis cannot be held responsible for promises made before she was in the finance role, and that she lacks in Luxon “the sort of leader who can build the necessary broad public support” for ambitious reform. Willis’s defenders say she has done as much as any finance minister could with a leader reluctant to make the case for austerity.

Her critics counter that Richardson and Bill Birch achieved far more under Jim Bolger – hardly a towering communicator. Hooton summarises their argument thus: “The ability of a finance minister to develop and sell an ambitious programme to her colleagues … matters much more than the media talents of their prime minister.”

How MMP changed politics

For some, though, the coalition’s economic failures aren’t the fault of Willis or Luxon, but of the MMP system itself. In his exploration of the Richardson–Willis clash for The Spinoff this week, Manhire discusses how proportional representation has robbed governments of the ability to pursue bold reforms – at least according to Richardson and Hooton. Richardson, reflecting on how far the terrain has shifted since her 1991 “mother of all budgets”, is scathing: “The trouble is we now have too much representation and not enough government … It’s destroyed the quality of decision making.”

Hooton is similarly bleak, telling Manhire that MMP has reduced the major parties to “basing their entire election campaigns on waving a $20 note around the streets of the median voter”. Writes Manhire: “For all its imperfections, Hooton believes, first past the post empowered governments to take big swings to deal with what they considered big problems. Today, it’s all about playing for an amorphous blob in the middle.”