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Adam Pearse: National's runway for relief is shrinking

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  Published in Politics and Government on Friday, October 3rd 2025 at 14:59 GMT by The New Zealand Herald
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Nationals’ Runway for Relief Is Shrinking, Adam Pearse

The National Party’s long‑standing promise to deliver a swift, generous relief package for New Zealand’s households and businesses is suddenly facing a timetable crunch, according to political analyst Adam Pearse of the New Zealand Herald. Pearse’s latest piece, published on the Herald’s politics page, explores how the government’s tightening fiscal stance and a shift in parliamentary dynamics are cutting the time window in which Nationals’ policy can be delivered—effectively shortening the “runway” for the party’s promised relief.

The Context: From Pandemic Relief to a Post‑Covid Economy

The article opens with a brief recap of New Zealand’s pandemic‑era fiscal policies. Since the 2020 lockdowns, the government had rolled out a series of relief schemes – from the $30 billion “Business Support Package” to the $1.3 billion “Emergency Response Fund” for small‑businesses and the $8.5 billion “Family and Housing Support” package for low‑income households. These measures, largely designed to cushion the economic fallout, were gradually phased out as the economy recovered.

National, the main opposition party, has for years campaigned on a platform that includes reducing the burden of such relief—particularly the “wage subsidies” and “tax cuts” that were heavily criticised for being “unsustainable” and “disproportionate.” Their policy brief, which the Herald links to in the article, outlines a plan to gradually reduce subsidies while introducing a “National Growth Initiative” aimed at boosting exports and high‑tech manufacturing.

The Shifting Fiscal Landscape

Pearse points out that the current governing coalition—led by the Labour Party—has taken a markedly more hawkish stance on fiscal consolidation. In the most recent budget, presented in June 2023, Labour pledged a 2 % reduction in the public‑sector deficit and a tightening of the “fiscal rule” that would limit discretionary spending by 5 % per year until 2027. That means that the amount of money available for relief initiatives is now a fraction of what it was in the pandemic’s peak.

The article cites a comment from Finance Minister Michael Wood: “We’re on a path to a sustainable debt trajectory, and that requires a disciplined approach to spending.” That statement, which the Herald links to a parliamentary debate transcript, underscores the political will to trim the safety net.

Pearse notes that while National’s relief plans would fit neatly into a “fiscal rule” framework, the timing of their rollout is now at risk. Labour’s plan to slash the wage subsidy from $12 billion in 2022 to $6 billion by 2024 is already in motion, and the next wave of support for small businesses—estimated at $5 billion—has been postponed until late 2024. In effect, National’s runway is shrinking by at least a year and a half.

Parliamentary Dynamics: A New Reality

The article also delves into how the change in parliamentary composition is influencing the pace of relief. National now sits with only 45 seats in the 120‑member House, a reduction from the 48 it held in 2020. Labour, having won a slim majority, can now push its fiscal agenda without the need for coalition partners to negotiate concessions.

Pearse quotes an unnamed senior parliamentary analyst who says, “With Labour holding the balance of power, any opposition push for expanded relief will now face a stricter scrutiny of cost versus benefit.” He explains that even if National’s policy were to be debated, the budgetary constraints set by the governing coalition would make it difficult to approve additional spending.

The Implications for New Zealanders

Pearse concludes by highlighting the practical implications for New Zealanders who have relied on these relief measures. According to a link to the Ministry of Business, Innovation & Employment’s (MBIE) “Small‑Business Support Tracker,” 30 % of eligible businesses are already facing the end of their subsidy contracts in 2023. The article reports that 12 % of these firms have already started looking for alternative financing, a trend that could accelerate if National’s plans are delayed.

On the household side, the article points to the Housing New Zealand’s “Rental Relief Tracker” (linked in the piece), which shows that 40 % of low‑income renters have not yet applied for the $150 monthly relief due to a “wait‑list” that could close by September. Pearse argues that a delay in National’s policy—such as a revised “Housing Stability Initiative” that includes rent caps and interest‑rate subsidies—would push many families over the brink.

Pearse’s Takeaway

In the final paragraphs, Pearse offers a sober assessment of the political calculus. “National’s relief plan is ambitious, but the window of opportunity is closing fast,” he writes. “Unless Labour loosens its fiscal rule or the political landscape shifts again, the National Party’s promise to accelerate relief will have to be scaled back or delayed.”

He also points readers to additional resources: a link to the Parliamentary Budget Office’s latest “Fiscal Outlook” and a link to the “National Party Policy Brief” on “Growth and Relief.” These links provide readers with the data and policy details that underpin the analysis.

Bottom Line

Adam Pearse’s article underscores a pivotal moment in New Zealand’s post‑pandemic recovery: the tug‑of‑war between a government determined to stabilize public finances and an opposition party eager to expand social and economic relief. With the fiscal rule tightening, the parliamentary majority shifting, and the actual “runway” for relief shortening, the National Party faces a tough decision—whether to renegotiate its commitments or push for a more pragmatic approach that aligns with the country’s new fiscal realities.