The weeks-long wait for National, Act and NZ First to reach an agreement is finally over and a new Government will be sworn in.

We now also know the shape of the cabinet, which will see a spread of representatives across all three parties.

One portfolio that was at the centre of much speculation in the lead-up to this week’s announcement was Finance, with analysts questioning whether National’s Nicola Willis or Act’s David Seymour would take on this coveted role.

It has now been confirmed that the next Finance Minister of New Zealand will, in fact, be Willis, with Seymour holding an Associate Finance Minister role.

NZ Herald deputy political editor Thomas Coughlan was this week joined on the On the Tiles podcast by former NZ Herald economic editor Brian Fallow and NZ Herald Wellington business editor Jenée Tibshraeny to discuss the challenges ahead to deliver on National’s promise to get the country back on track.

Fallow warns that no matter what Willis might be planning to do, she might soon find that some things are well beyond her control.

“She might want to reflect on the other 99.8 per cent of the global economy and its endless ability to sideswipe us with shocks,” says Fallow.

“At the moment, the picture we see there is not particularly reassuring. Even before the Gaza hostilities broke out, the IMF was describing the global economy as limping along. There are clearly all sorts of challenges in China, our major trading partner and Europe is going sideways.”

Fallow says that Willis will carefully consider the need for greater fiscal resilience to cope with a much more challenging international environment.

“One of the basic vital signs of the economy that we don’t pay enough attention to is the balance of payments,” says Fallow.

“We go on a lot about GDP, inflation and unemployment, but the external accounts are important and right now they are dreadful. The deficit is $30 billion. It’s 7.5 per cent of GDP. That’s an internationally conspicuous number. The average for rich countries is more like 1 per cent. That $30 billion has to be funded somehow – either by borrowing more or selling assets to the rest of the world.”

Tibshraeny agrees on this point, saying that there will be growing pressure to balance those books.

“New Zealand really needs to produce more stuff and export things the world wants,” says Tibshraeny.

“And with growth slowing in China, we need a buyer for all of our goods. It’s a double-pronged challenge because we actually need to produce valuable things that we can export. We need to do stuff beyond buying and selling houses.”

Listen to the full episode to hear more details on the big economic challenges ahead for the country.

On the Tiles is available on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts. New episodes are available evenings every Friday.