Today is the Government’s 104th day in office – better known as the day the real work begins.  

Chris Luxon’s had 100 days to hack, slash and burn his way through a stack of the previous Government’s prized legislative possessions.  

He’s also had 100 days to lay some of the Government’s biggest problems at the feet of the previous administration.   

And with good reason.   

More than 63,000 people work for the Government today; that number was 48,900 in 2017.  

Even with the excuse of Covid-19, there is absolutely no justification for such a mammoth bloating of the public service.   

But from today, the Government must transition from blaming the last administration – to fixing the mess Labour left.  

And this will be no easy feat.  

It has become clear that the fiscal clean up Finance Minister Nicola Willis had anticipated before the election is a lot larger than she expected.   

Over the past few weeks, Willis has been dropping breadcrumbs like a fiscally minded Hansel and Gretel in a bid to gently soften the public to the grim reality that May’s budget isn’t going to be as sweet as was once promised.   

Her first clue was when she told Bloomberg: “I wouldn’t describe myself as optimistic about hitting the budget surplus”.  

In National’s fiscal plan, Willis expected the Government’s books to be back in the black in the 2026/27 financial year.   

“I think it is realistic to say that given the downgraded forecast we’ve seen for the growth trajectory since then, you would expect that to have a revenue impact. And so that surplus position is challenged,” she said.   

Those comments got the message through to a few economists and market watchers, but Willis needed to push the warning out further.   

So, she tee-ed up a patsy question in the House – when a backbencher from your own party asks a softball question, designed to give the minister a chance to boast about their achievements.   

Only, Willis wasn’t boasting last week – she was waving a red flag.    

“Data revisions and recent out-turns since the half-year update in December indicate that the economy is likely to be in a weaker position this year than was anticipated before Christmas.”  

Then came the kicker.  

“That will flow through to forecasts for tax revenue, so I expect the Crown to be collecting less revenue over the next few years than was previously expected.”  

In other words: the economy’s doing worse than expected, so the Government’s collecting less tax than expected, which means less money to spend.   

Fast forward to Wednesday this week and she was striking a concerning tone once again when she warned members the interest cost alone of servicing the Government’s debt will be $8.8 billion this year.  

It will surpass $10b in 2026.   

But if these hints are the breadcrumbs, the big bad news cake is still to come – and come it will on March 27 when Willis unveils the Budget Policy Statement (BPS).   

The BPS serves as somewhat of an opening salvo to the Budget, which is released in late May.   

It’s where the Finance Minister outlines the priorities of the Budget and, most importantly, the all-important operating allowance – how much extra money the Government has to spend on new initiatives.   

In National’s pre-election fiscal plan, it promised $3.2 billion of new spending this year, $2.85 billion next year and $2.7 billion in 2027.  

Compared to the last Government, these were already tight targets.   

But given the lower-than-expected tax revenue, the billions of dollars' worth of interest payments and the trouble the Government is having with the public sector’s 6.5 per cent haircut – speculation is mounting Willis’ operating allowance dream won’t become a reality.   

And as the Budget draws closer, Willis will be getting worried.