New Zealand Election: Two-Speed Economy Tests National Party

Seventy-year-old Liz Hartley works part-time as a bus driver to pay for basic extras and small treats. Her financial reality in Lower Hutt, a city northeast of Wellington, illustrates the economic divide facing New Zealanders ahead of the November 7 general election. Hartley, who queues at food trucks at riverside markets, plans a tactical vote to prevent the reelection of National Party incumbent Chris Bishop in the Hutt South constituency. Bishop is one of the most senior figures in the current government.

The National Party took office in 2023 on a platform of cutting inflation and government debt. Three years later, the country struggles to fully escape a recession, though the party claims it has established the foundation for future growth. In Hutt South, voters face a cost of living crisis and expenditure cuts that have eliminated contractor jobs in the capital. These cuts have also reduced spending at local shops and businesses.

Chris Bishop told Reuters that voters in his constituency want a plan to move the country forward and drive prosperity. He stated that his sense is that the economic plan is beginning to work and that the government needs more time to see it through. The party is trying to retain votes in cities with populations of 30,000 or more, which are home to about 65% of New Zealand’s 5.5 million residents.

Political commentator Grant Duncan noted that without the current economic funk, the National Party would have an easier path back to office. He argued that the party’s reputation as great economic and fiscal managers has not translated into results. Duncan also pointed out that Prime Minister Christopher Luxon made economic promises before the 2023 election that he could not keep. Kiwibank Chief Economist Jarrod Kerr described the period as shock after shock after shock, which has postponed the promise of recovery.

The economic divergence between rural and urban areas is stark. Tourism and higher agricultural exports have supported the South Island, where second-quarter retail spending rose 8.6% year-over-year. In contrast, consumer spending in urban locations like Auckland and Wellington on the North Island lagged behind, rising only 5.8% in the same period. Unemployment fell by 0.6 percentage points in the South Island but rose by 0.7 percentage points in the North Island.

House prices have eroded middle-class wealth, particularly in major cities. Prices are down almost 30% from their peak in Wellington and 24.7% in Auckland, compared to a national drop of 17%. Jarrod Kerr described the situation as one where a third of the economy is doing well while two-thirds are still trying to find their feet. This split leaves many businesses and households feeling the cost of living crisis as a very real burden.

Polls show no clear path to government for any potential coalition. Voters are looking to Labour or smaller parties such as the centrist Opportunity Party, which could be the first new party in government since 1996. Qiulae Wong, the Opportunity Party leader, told Reuters in August that people are looking for something different. The party is drawing urban professionals and voters disillusioned with the traditional left-right divide. Liam Hehir, a political commentator, said it is getting harder to sell the National message that fiscal restraint is laying the groundwork for growth.

Hartley, who should be enjoying retirement, finds herself working part-time because rising prices leave very little money by the end of the week. She stated that savings no longer exist for her. In Hutt South, the decision to vote tactically reflects a wider trend of voters shopping around for better options after three years of economic strain.