Finance Minister, Nicola Willis has stressed the Government's desire to take a "slow and steady" approach to re-balancing its books amidst a recession, after confirming the harsh reality of the country's finances during her Budget Policy Statement.  

Willis admitted she wouldn't be able to get the Government’s finances back in shape as quickly as expected, while delivering tax cuts - which may not be as attractive as National had promised before the election. 

As a result, the Government’s tax take is likely to underperform, which means the Government won’t get its books back in surplus by 2026/27 as expected in December, and as National campaigned on before the election. In fact, the books are still likely to be in the red in 2027/28. 

However, though Willis said she was committed to being a prudent manager of the country’s finances, she said she wouldn’t chase a surplus at any cost - particularly if that cost was borne by frontline public services. 

Talking to Newstalk ZB this morning following her address, Hosking asked why her Government wasn't going harder on tackling the surplus - considering the interest that the national debt was accruing.  

She said she did want to fix the surplus, which is why the Government set a lower debt target than the previous Labour Government, as well as expressing the ambition to track debt down to 40% of the country's GDP.  

"The numbers are the numbers," she told Hosking. 

"The surplus that was forecast for [2026/2027] was always $100 million, even if we didn't change anything with the economy, it's now forecasted that the tax take will be down another $3.2 billion that year. That means we really need to focus on getting back to surplus in [2027/2028]." 

Willis said everything came down to forecasting, which she said will change constantly and didn't want the Government's financial approach to reflect the inconsistency.  

"We could choose to overreact to them and do incredibly dramatic things with the size of Government and the amount of Government spending in health and education, but we don't want to be radical in that way," she said. 

"Slow and steady as she goes, we're not going to fix in one budget what's been broken in six. Instead, we're going to chart a steady course and be much more careful with New Zealander's money time after time again." 

However, Willis also confirmed she wanted to stick to her $3.5 billion promise for her budget. The minister is still meeting agencies about how much money would be allocated for each aspect of the budget.  

She pointed at the fact in recent times, there was a tradition of the Finance Minister announcing one number before the Budget, then giving another number when the Budget was released.  

This year, Willis said, GDP and tax data was still being forecasted - but the number for this year's Budget will remain less than what she announced. 

"None of this gets finalised for a few weeks, but it's fair to say the shape of the budget is shaping up, it’s looking good, I’m confident it’s all coming together well.”