Navigating uncertainty: The economic priorities for New Zealand’s future

Deloitte's perspective

By Liza Van der Merwe, Partner, Deloitte

Election years provide an opportunity to reflect on the previous few years and consider New Zealand’s trajectory going forward. For New Zealand businesses, the last several years have been characterised by economic uncertainty, shifting geopolitical dynamics, and rapidly changing market conditions. Faced with this new uncertainty paradigm, businesses will be looking to emerge from this election with a clear direction for the New Zealand economy. In the 2026 Election Survey, businesses overwhelmingly identified the economic environment as the most important factor for achieving sustained economic growth.

Globalisation has fundamentally reshaped New Zealand’s economic landscape, connecting the country more closely to global flows of talent, capital, and commerce. New Zealand businesses have benefited significantly from these connections, drawing on international expertise and investment to enhance their competitiveness at home and abroad. In this year’s survey, 62.8% of respondents said trade was critical, important, or somewhat important to their business.

While globalisation has created significant opportunities, it has also increased New Zealand businesses’ exposure to global economic shocks, geopolitical tensions, and disruptions beyond their control. Respondents also identified freight and logistics costs (50.9%), supply chain disruption (46.6%) and exchange rate volatility (41.6%) as key issues affecting their businesses. Only 14% of respondents said that trade-related issues were not applicable to their business.

Recent events have highlighted just how quickly global shocks can flow through to the New Zealand economy. Earlier this year, Deloitte Access Economics modelled a range of fuel price scenarios, with outcomes spanning from stalled growth and higher unemployment to a more significant economic downturn. At present, inflation sits at 4.1% and unemployment at 5.6%, placing New Zealand broadly in line with the modelled moderate disruption scenario. This serves as a reminder that global uncertainty is not an abstract risk. It has real implications for growth, jobs, and living standards at home.

As the global environment becomes more uncertain, what economic priorities will matter most for sustaining New Zealand’s growth and prosperity?

The first is productivity. In the long run, productivity is the engine of economic growth. By producing more value with the resources we already have, New Zealand can lift wages, strengthen competitiveness, and ease fiscal pressures.

The second is investment and infrastructure. Encouraging investment can help create certainty for businesses making long-term capital decisions and support the delivery of the right infrastructure in the right place at the right time. Creating certainty for investors will be critical to expanding the economy's productive capacity.

The third is fiscal sustainability. Last year, Treasury referred to New Zealand’s fiscal position as a “structural fiscal deficit” and projects that fiscal pressures will only continue to accelerate.¹ Survey respondents strongly favoured spending reductions as a tool to address fiscal challenges (39.1% preferring spending reductions alone and 54.3% preferring a combination of spending reductions and tax increases). There are no easy choices left to address fiscal sustainability, and whether through increased taxes, reduced public spending, or both, trade-offs will be required.

In a world where geopolitical events can shift overnight and throw vital supply chains into turmoil, New Zealand businesses need to be resilient to forces beyond their control. New Zealand cannot control geopolitical tensions, global supply chains, or the economic shocks that originate beyond our shores. But it can control how prepared it is to respond. That means making the difficult choices today that strengthen productivity, unlock investment, and restore fiscal sustainability.

Chapman Tripp's perspective

It’s the economy, stupid

By Simon Peart, Partner, Chapman Tripp

In an economic downturn, voters reward parties that promise to improve their personal finances.

That’s been the challenge for the current Government and it’s likely to continue into, and beyond, this election. Sixty two percent of voters surveyed in the July 2026 Ipsos Issues Monitor ranked inflation and the cost of living as amongst the top three most important issues facing New Zealand today. No other issue comes close.

When this is the public mood, the economic priorities of any Government, whatever its flavour, will be focused on the living room, not the boardroom. And with upward cost pressure across the economy unlikely to abate soon, the potential for conflict – real or perceived – between the interests of consumers and business or investors is significant.

This is just to say: talk of growth, productivity, and investment is all well and good, but what will actually drive policy is consumer prices.

The current Government, nominally a friend to business, has not hesitated to get out the whacking stick when it has suited them politically to do so. And it’s unlikely a left-leaning coalition would be more lenient. Those sectors that strongly influence the cost of living – utilities, groceries, housing, personal finance, transport, insurance, merchandise – will continue to face intense scrutiny in the years to come.

Endnotes

1. He Tirohanga Mokopuna - Long-term Fiscal Statement 2025 - September 2025