The situation is well described by Craig Renney on Bluesky:
" The Minister of Finance and the Treasury released its Half Year Economic and Fiscal Update today, and with it ÔÇô its ÔÇÿplanÔÇÖ for the Budget in 2025 in the Budget Policy Statement. The indicators show very clearly that itÔÇÖs not working for anyone.┬á
From a fiscal perspective, the government books are deeper in the red. In Treasury language they say ÔÇ£All key fiscal indicators are expected to be weaker across all years compared to the Budget UpdateÔÇØ. That means more debt and OBEGAL doesnÔÇÖt come back into surplus┬á
From an economic perspective, its even worse. The data shows that the economy is growing more slowly than forecast just six months ago. Next year GDP was forecast to grow 1.7% at Budget. Now its 0.5%. GDP is forecast to be $20bn lower by 2028. GDP per capita falls 0.6% this year. 
Unemployment is higher in every year of the forecast, rising to a peak of 5.4%. There will be 20,000 more people on jobseekers support by 2026. The Treasury states that it is one of the biggest reasons why spending continues to grow in the future - yet there is no plan to help 
Net migration basically halves next year from 58,000 to 29,000, which to date had been one of our biggest drivers of growth. Even house prices are forecast to fall by 0.1% this year, so house price growth will no longer drive consumption in New Zealand. 
The government's solution to its problems is to double down. Next year the government has $700m to pay for everything new outside of health. ThatÔÇÖs nowhere near enough. The BPS shows that the plan is ÔÇ£savings will need to found, beyond those identified in the previous BudgetÔÇØ.┬á
That is why the government states that ÔÇ£with a small number of exceptions, government departments should expect to receive no additional funding in the BudgetÔÇØ. New real-terms cuts all round ÔÇô building on the real-terms cuts already delivered last year.┬á
Despite falling inflation and falling interest rates the Treasury states ÔÇ£business investment is forecast to continue falling into next year, contracting by 3.2% in the June 2025 yearÔÇØ. Businesses are not keen to invest when there is little hope of growth.┬á
Other countries around the world are seeing growth, yet New Zealand is not. That lack of growth in turn delivers poorer fiscal outcomes, and less public investment. That in turn requires bigger cuts to balance the books. Round and round we go. "
If only Nicky No Boats had that depth of economic understanding!
" The Minister of Finance and the Treasury released its Half Year Economic and Fiscal Update today, and with it ÔÇô its ÔÇÿplanÔÇÖ for the Budget in 2025 in the Budget Policy Statement. The indicators show very clearly that itÔÇÖs not working for anyone.┬á
From a fiscal perspective, the government books are deeper in the red. In Treasury language they say ÔÇ£All key fiscal indicators are expected to be weaker across all years compared to the Budget UpdateÔÇØ. That means more debt and OBEGAL doesnÔÇÖt come back into surplus┬á
From an economic perspective, its even worse. The data shows that the economy is growing more slowly than forecast just six months ago. Next year GDP was forecast to grow 1.7% at Budget. Now its 0.5%. GDP is forecast to be $20bn lower by 2028. GDP per capita falls 0.6% this year. 
Unemployment is higher in every year of the forecast, rising to a peak of 5.4%. There will be 20,000 more people on jobseekers support by 2026. The Treasury states that it is one of the biggest reasons why spending continues to grow in the future - yet there is no plan to help 
Net migration basically halves next year from 58,000 to 29,000, which to date had been one of our biggest drivers of growth. Even house prices are forecast to fall by 0.1% this year, so house price growth will no longer drive consumption in New Zealand. 
The government's solution to its problems is to double down. Next year the government has $700m to pay for everything new outside of health. ThatÔÇÖs nowhere near enough. The BPS shows that the plan is ÔÇ£savings will need to found, beyond those identified in the previous BudgetÔÇØ.┬á
That is why the government states that ÔÇ£with a small number of exceptions, government departments should expect to receive no additional funding in the BudgetÔÇØ. New real-terms cuts all round ÔÇô building on the real-terms cuts already delivered last year.┬á
Despite falling inflation and falling interest rates the Treasury states ÔÇ£business investment is forecast to continue falling into next year, contracting by 3.2% in the June 2025 yearÔÇØ. Businesses are not keen to invest when there is little hope of growth.┬á
Other countries around the world are seeing growth, yet New Zealand is not. That lack of growth in turn delivers poorer fiscal outcomes, and less public investment. That in turn requires bigger cuts to balance the books. Round and round we go. "
If only Nicky No Boats had that depth of economic understanding!