Ambition meets reality

3/2/2025

When a government promises transformation, the smart money watches what they prioritise, not what they promise. Today’s Statement to Parliament is big on ambition – but separating the achievable from the aspirational will require a clear eye.

Let’s cut to the chase.

The infrastructure push has real teeth. Those 149 Fast Track projects aren’t just numbers – they’re backed by expert panels and streamlined consenting. For a nation that’s historically moved at glacial pace on building anything, this could be genuinely transformational.

The education reset deserves attention. Structured literacy, daily requirements for core subjects, and clear teaching guidelines aren’t sexy policy, they’re evidence-based. After years of sliding PISA scores, this back-to-basics approach might move the needle.

The trade agenda’s showing momentum. Three agreements in 14 months, including the UAE deal opening up 98.5% tariff-free access, suggest this government can close deals. For a trading nation, that matters.

But – and it’s a significant but – several elements of this agenda strain credibility.

The fiscals – on the face of it – don’t add up. You can’t simultaneously cut spending, reduce deficits, lower taxes, and deliver massive infrastructure investment. Something’s got to give, and history suggests it’s usually the infrastructure that gets delayed.

The welfare targets (50,000 fewer beneficiaries by 2030) ignore Treasury’s own unemployment forecasts. Setting targets is admirable; setting impossible ones is not.

This is a government betting big on its ability to cut through Aotearoa New Zealand’s traditional implementation challenges. Some of that confidence is warranted – the Fast Track legislation and education reforms show promise. Some of it isn’t – the welfare targets look particularly shaky.

Success will depend on ruthless prioritisation. They can’t do everything at once, and pretending otherwise will only damage credibility.

The smart play would be focusing on three or four major reforms. Probably infrastructure, education, and trade. Maybe creating the conditions for social investment and not trying to control it from Wellington. And then being more realistic about the pace of change elsewhere.

They will need to ditch the culture wars and the proposed changes to the various regulatory systems. The former is running up against walls of resistance and the latter pushes substantial new costs on small and medium-sized businesses.

Markets, like voters, can spot the difference between genuine reform and wishful thinking. This agenda has elements of both. The next six months will show us which category dominates.

Watch this space. But watch with clear eyes.

Tomorrow, I will review the speeches in response. They were stronger than I’ve seen in some time.