One of the hardest decisions politicians face is the choice between today and tomorrow. How much do you spend on and invest in the needs of citizens right now? How much do you borrow to meet their expectations? And how much do you ask people to sacrifice now so that we have savings for a rainy day or so that our children carry less debt? Any finance minister preparing a budget has to decide, do I look after the now? Or the then? And so it was for Nicola Willis as she prepared Budget 2026, which she delivered this afternoon.
Representative democracies will always be pulled towards the now. Politicians wanting to win the next election are always under pressure to meet the needs of the voting public today. Future voters won’t decide whether they still have a job on November 8, 2026. Yet Willis has argued today that she’s playing the long game.
You might have heard of the famous Standford marshmallow experiment from 1972. A child was offered a single treat now. But if they could wait 15 minutes, they would get a second treat. Willis seems to be conducting much the same experiment with today’s budget. And she’s betting that New Zealanders will be willing and able to delay gratification for more treats in a few years’ time.
Politically, it’s a gamble. Especially when there’s a war on and New Zealand has spent years in a cost of living crisis. The government’s critics will say, “if not now, when?”. Indeed, Labour leader Chris Hipkins in his response to Willis’ speech accused the government of not understanding how tough New Zealanders are doing it today. He focused on the now, arguing that this budget delivers “immediate pain”.
For Willis, the big mark of success this year is getting a projection the government’s books will return to surplus a year earlier than previously projected – in the 2028/29 fiscal year. It will grow and reach $6.6 billion by 2030. “This means less borrowing, a lower debt track and a stronger fiscal position than previously forecast,” she says in a statement. Further, rather than borrowing more to pay for things now, she’s actually borrowing $6 billion less over the next four years. In her budget speech, Willis stressed that she had written a budget for future generations. A budget that will keep young New Zealanders from fleeing to Australia because they can see better times ahead. Around 2030, perhaps. But will they be willing to wait for their second marshmallow?
For some, this doesn’t go far enough. The Taxpayers’ Union accuses Willis of spending today and saving tomorrow. It admires the principle but not the extent of the action.
The principle of taking hard choices now so that our children don’t have to carry the can is one that Willis’ predecessors Ruth Richardson and Jenny Shipley built their careers on. Shipley told The 9th Floor series in 2017 that her economic policies were driven by “being a mother”. She was “really anxious in the 80s that we were living in a debt-ridden and accumulating debt environment” and “couldn’t see how the next generation of New Zealanders were going to have their fair chance” if she didn’t get debt down. National’s approach to that problem assumes that taxes are bad and so typically involves cutting social services. Richardson and Shipley cut benefits and sold assets. You might say they took marshmallows off the table. Willis won’t go that far. Facing an election in a few months, she’s put the one marshmallow on the table in the form of a new hospital for Whangarei and longer postnatal stays for new mums, more roads (has National ever seen a road plan it didn’t love?) and rail (one of New Zealand First’s wins), more spending on defence and 10 redeveloped schools. More money for the SuperGold card and 10,000 more places in trade academies. To pay for that marshmallow, the Fees Free programme for university students goes, as do around 9000 public service jobs. But she’s promising that extra marshmallow later if we can just delay our gratification.
Is that the right mix of confectionary and contraction to keep a 30 year-old from heading to Sydney or Perth? And will her bet on tomorrow pay off? Anyone with even a hint of economic insight can see that Willis’ promise of jam tomorrow relies on a quick end to war in the Middle East (the US midterms make that a reasonable bet), strong investment and job growth, and generally sunny skies ahead. It’s a policy of optimism. Another gamble.
The biggest choice between today and tomorrow for any New Zealand politician is undoubtedly how much the government pays towards superannuation. With that, Willis has clearly drawn a line in the sand for the election. National has already announced it will campaign on raising the age of eligibility and today Willis used the Budget to show that the cost of super will rise from $20 billion in 2023 to more than $30 billion in 2030. Next year alone, she said, it will rise by $1.8 billion. She said it’s our future selves and future generations who will have to pay the bill. Just imagine the other marshmallows that our children could get if we commit to a lower super age in this generation.
Labour MPs say the needs of today are so serious people can’t wait. They, like New Zealand First, say the super age can’t change. They say there are other ways to care for future generations while still caring for those in need right now. The cuts today actually make it worse for the generations to come.
Judging by today’s Budget, it looks like November’s election will be about those choices between today and tomorrow, whether we want to care more for our immediate selves or future selves, and what form we want that care to take. For today, Willis has walked a middle road, but with more emphasis on rewards come 2030. But will National still be in power then to enjoy those treats? Will New Zealanders agree that growth is just around the corner? And are they willing to wait for it? We’ll find out November 7.