Post-Cabinet Press Conference: Monday, 9 March 2026

Kia ora, good afternoon, everybody. Today I’ll be providing an update on what our Government is doing to support New Zealanders affected by the conflict in the Middle East, and Finance Minister Nicola Willis is with me and she’ll speak about the impacts on the New Zealand economy.

There are currently 3,694 Kiwis in the Middle East registered with Safe Travel. That is more than double the number that were registered this time last week and that reflects that more people in the region have heard and have responded to our calls for them to register. As I said last week, it is still the case that the real number of people in the region is likely to be higher, so we continue to urge everyone there to register with Safe Travel.

We know that New Zealanders in the Middle East will be feeling anxious and uncertain, and many will be eager to come home. The quickest way for New Zealanders to return home is on commercial flights. The first flight to New Zealand from the UAE arrived over the weekend and we encourage people to take up these opportunities where it’s safe and possible to do so.

Many Kiwis remain stranded in places where no flights are available, and the Government is working around the clock on plans to assist as many of these Kiwis as possible. Officials are providing advice on land departure options for those in places like Kuwait, and on Saturday morning our Royal New Zealand Air Force Hercules departed from Whenuapai to join another of our Air Force’s plane to be ready to assist in the evacuation of New Zealand citizens stranded by conflict in the region should that become our only option. The situation, as you’ll appreciate, is fast-moving so we want to be ready for when conditions will allow us to assist with any civilian evacuation operations that may be required.

Many Kiwis will be watching what’s happening in the Middle East and feeling concerned about how it will impact on us here in New Zealand. It is understandable that people will be thinking about the impacts on petrol prices and their household budget, especially as many are still feeling the pressure of an economy in the early stages of recovery.

It is clear that what is happening in the Middle East will also put pressure on global shipping and trade routes, energy markets, and oil prices. This of course has the potential to flow through to the price at the pump, the cost of freight, and the confidence of people and businesses across the world. However, it is too soon to know exactly what the implications will be, not just for us in New Zealand but for the world.

So far, the effects on international markets have been relatively limited. Oil prices have certainly increased and we are continuing to monitor the effect of that on fuel stock and prices here in New Zealand. The long-term price implications for New Zealanders will depend on the duration, the scale, and the intensity of the conflict. Right now, our domestic fuel stocks are healthy and scheduled deliveries are on track. Government agencies are in regular contact with the industry.

Cabinet today agreed to establish a ministerial oversight group on economic security with a focus on fuel and supply chains. This group will be chaired by the Finance Minister and will receive weekly briefings from MBIE.

As a Government we need to focus on controlling what we can control, and what we can control is how we respond to these unexpected shocks. If you think back to other major global shocks, New Zealand has proved that we are an agile and resilient nation that has managed to navigate its way through these geopolitical disruptions. Our ability to pivot quickly is a strength that has always seen us through. For instance, despite the US tariffs imposed last year, total global exports rose to more than $29 billion for the December quarter, up $2.2 billion on the same period last year.

When the Middle East accounts for only 3% of our exports, since the conflict began the Government has been in direct contact with affected sectors to offer them help with redirecting product to alternative markets. We’ve reached out to over 850 exporters to understand their questions on things like shipping, logistics and storage capacity, and we will keep doing that. Our exporters frankly are some of the best in the world and last year’s export growth is a testament to that.

New Zealand is well placed to ride the wave of this latest shock. One of the reasons why we are well placed today is because our Government has spent the last two years strengthening our economic fundamentals. Our strong fundamentals provide us resilience and help cushion us from global shocks, and we have comparatively low public debt, monetary policy that is well anchored, and well functioning institutions.

The conflict began at a time when New Zealand’s economy had already entered recovery after a prolonged recession. Had it begun at a time when inflation was 6 or 7 percent and interest rates were sitting at around 5 percent, the economic impact would be worse and the economic recovery would take longer. We have seen the impact of high levels of inflationary government spending, coupled with cost pressures arriving from abroad. It results in sustained levels of high inflation and bigger increases in interest rates. So some politicians, I understand, want to ramp up public spending, increase Government debt, and hike taxes on Kiwis, but that frankly is the last thing our economy needs.

I say all of that just to make the point that responsible economic management matters most when the world is volatile and unpredictable. I’ll now pass on to Nicola to explain a little bit more about the economic situation.

Thank you, Prime Minister. As you’ve indicated, the conflict in the Middle East is costing lives and threatening livelihoods throughout the world. The New Zealand economy is not immune from the fallout. The extent of the effects here at home will depend on the duration of the conflict and the extent to which it escalates. We are already seeing impacts in the price New Zealanders pay for petrol and we can anticipate a range of potential consequences for supply chains, trade, inflation, and future economic activity. New Zealanders are rightly asking what this may all mean for their cost of living, jobs and incomes. The Government is focused on these issues and we will keep you regularly updated. We cannot control global events but we can control how we respond. Whatever happens, our Government will deliver the responsible economic and fiscal management needed to minimise the long-term impact for Kiwi families.

Before I outline the possible road ahead, let me first confirm that according to the latest advice I have received from Treasury, the New Zealand economy is facing into these challenges from a stronger position than we were forecasting at our December economic and fiscal update. The Treasury’s preliminary economic and fiscal forecasts for this year’s Budget have been very positive and largely favourable compared to the half-year update. Latest estimates suggest the economy grew 1.7 percent last year and when the preliminary forecasts were finalised, Treasury was expecting growth of 3 percent for each of the next two financial years.

These positive forecasts were thanks to low interest rates, historically high export prices, a recovery in tourism, elevated business confidence and increasing consumer confidence. This picture, combined with the Government’s ongoing commitment to fiscal discipline, has also led Treasury to advise me of an improvement in the operating balance track and net debt being 1.5 percent lower at the end of the forecast period than previously forecast in December.

Of course that was then and this is now. I share these previous forecasts simply to underscore that New Zealand enters this challenging global time from a stronger position than may have otherwise been the case.

Let me turn now to what we do now about the impact of the conflict and how we are preparing for its future impacts. As the Prime Minister said, Cabinet has stood up a ministerial oversight group which I will chair, alongside other Ministers. It will meet at least weekly. The group will be supported by an incident management team that has been set up by the Ministry for Business, Innovation and Employment, and will have input from the New Zealand Treasury, the Reserve Bank, the Ministry of Foreign Affairs and Trade, and other relevant Government agencies as required.

Our first focus is on fuel security and prices. Rising oil prices obviously present a risk to global inflation and growth. The effective closure of the Strait of Hormuz, combined with attacks on fuel storage and processing infrastructure, has led to a spike in the price of oil and spikes in the price of petrol, diesel and jet fuel. I wish to first assure you that current events do not pose an imminent challenge to New Zealand’s fuel security. We have a national fuel plan in place and Government agencies have activated work with fuel companies, distributors, and retailers to coordinate our response. MBIE have published updates on their website. These show that in addition to up to 28 days of stocks of petrol, diesel and jet fuel already in the country, we have up to a further 29 days worth of fuel already en route in ships that have entered our sovereign waters. New Zealand is a member of the International Energy Agency and this stands ready to act should there be any further significant disruptions threatening security of global fuel supply.

The Government is of course also actively monitoring the impact international fuel prices are having on the price Kiwis are being asked to pay at the petrol pump. We understand there will be unavoidable market movements, but we do not expect to see fuel companies take advantage of this. We have asked the Commerce Commission to step up its monitoring of fuel prices and, if necessary, to call out any suspect pricing behaviour by retailers.

One potential pressure point for the New Zealand economy is the impact of the conflict on fertiliser stocks. Imported fertiliser is one of our most exposed imported goods, with over a fifth of our global supply coming from Saudi Arabia. The Fertiliser Association has signalled it is not aware of any shortages but does expect price pressures to emerge if the conflict persists beyond the short to medium term. The Ministry for Primary Industries is monitoring prices and supply chains.

We will also be closely monitoring potential wider trade disruption. The Middle East is a relatively small market for New Zealand, but one that has been growing in importance. Exports to the region last year totalled $3.3 billion, representing around 3 percent of our total exports. Our biggest exports are dairy products, along with meat. At this stage, it is too early to tell how much of that trade will be affected or indeed how much will be able to be diverted to other markets if trade routes are disrupted.

Clearly, New Zealand export prices could fall if global demand weakens, but again it is too soon to predict this with any certainty. The Ministry of Foreign Affairs and Trade, and New Zealand Trade and Enterprise, are actively supporting exporters and staying in close contact with them. On Friday we held a public webinar to share information with more than 900 exporters operating in the region. More webinars and ongoing information flow are planned.

Let me turn to financial markets. We anticipate the conflict will have financial, market, and uncertainty impacts. Conflict of course increases perceptions of risk and tends to drive a flight to safety in financial markets. Market reaction last week was understandably negative, with heightened volatility expected to be ongoing. Global interest rates were slightly up in response to concerns about the impact of rising oil prices on inflation. Currency markets show the New

Zealand dollar trading slightly lower. Reassuringly, the New Zealand Government bond market has not shown any material signs of stress, with strong demand shown at last week’s tender.

The Reserve Bank is of course actively considering the inflation and monetary policy outlook and will provide a scheduled update on 8 April. Central banks the world over will be balancing the inflation impacts of the oil price risk, on the one hand, with a potential negative demand shock, on the other hand, resulting from pressure on household budgets and a likely weaker global economy.

So what does this all mean for New Zealand’s economic prospects? The Reserve Bank and the Treasury will continue to actively consider this question. I am advised that a quick resolution of the conflict in the next few weeks would see the economy evolve close to the preliminary forecasts I outlined at the beginning of these remarks, albeit with slightly higher inflation in the near term. On the other hand, a longer conflict would likely have downside GDP impacts. But again, the impacts will depend on the duration and extent of oil price rises. In some foreseeable scenarios, growth would be expected to continue, but just not as strongly as forecasts previously suggested.

The simple fact is that right now, it is too soon to judge whether the impacts will last long enough to materially reduce levels of expected growth and employment in the New Zealand economy. However, we can say that we face into this uncertainty knowing that the economy has been strengthening considerably since the middle of last year, inflation is less than half what it was a few years ago, business and consumer confidence has recovered, our exports remain in high demand our export prices are at historic highs. I will keep you regularly updated. Thank you, and back to you, Prime Minister.

OK. With that, we’re happy to take any questions. Sorry, just so we don’t avoid the mistakes of Monday, if we can just go one at a time and politely with each other so we respect each other.

To Nicola Willis, what are those best-case scenarios putting inflation peaking at, if the war is over in the next few weeks?

Well, again, that will depend on what happens with oil prices over the next few weeks. You can anticipate that with a higher oil price, that does have a flowthrough into the general rate of inflation across the New Zealand economy. The extent of that will depend how high oil prices go and how long they stay high, and of course all of this is contingent on is this a conflict that lasts a few more weeks, or longer than that?

But what’s the number that the modelling is showing you?

Well, there’s a range of models and there are a number of hypothetical factors which go into them.

Sorry, Jenna, you mean in terms of the forecast, the more positive forecast that Nicola referred to the beginning? Yeah.

Yes. I mean, when you were talking about more positive forecasts in the beginning, what is inflation peaking at under that scenario?

Well, I’m not in a position to tell you that number, but what we know is that it would add more inflation pressure than would otherwise be the case. So we have been forecasting inflation coming back into the target band between 2 or 3 percent. This would offer another upward pressure to that inflation track. Of course, these are obviously issues for the Reserve Bank to monitor and dependent on their monetary policy decisions also.

Are you considering any fuel tax excise cut?

We’re not considering that at this stage. Look, I’m very conscious that I’d love to be able to say I can take the pain away right now, but I’m conscious that short-term gain could lead to longer-term pain and I’m mindful that any immediate actions do come with a longer-term cost, and that cost is in terms of a hole in the funding available to repair and rebuild roads, and also potentially adding to borrowing, which has already built up to very high levels. So we need to weigh the cost of that short-term gain against the medium-term pain that it could cause, and be mindful of the costs that could come to every New Zealand taxpayer if we are to act pre-emptively on that.

I was just going to say, on Jenna’s line of questioning, fuel tax excise is due to go up by 12 cents next year. In light of what’s happening, are you doing any reconsideration that space?

Well, we haven’t legislated for that change yet and I think it’s appropriate that before we do so, we take into account the latest market conditions and what’s happening for the petrol price at the pump, and that’s what we will do. So Cabinet will give consideration to that issue when we have better information.

So are you effectively saying that that number could change? It could go up or down depending on the circumstance?

We haven’t given active consideration to that at this stage, but I think it will be appropriate that when Cabinet does take those decisions, we’re mindful of what we’re seeing in terms of the price Kiwis are paying at the pump, the economic conditions they are experiencing, and the weigh-up between that and what that means for our road maintenance and development programme.

Can we go to Jo and then Henry?

Is there a threshold or a price, I guess, that we hit that you would then consider cutting excise tax? What do you have in mind when you say it might happen?

Well, what I’m saying is that we have to remember that any short-term relief on petrol tax, ultimately, first you need to replace that petrol tax. We saw that with the last Government. When it took off the petrol tax for a period, it mounted up a bill of a $1 billion and then needed to reimpose that cost on New Zealanders afterwards. And we need to be mindful that those hundreds of millions of dollars aren’t free. They need to come from somewhere, and they either come from the road maintenance budget or they come in the cost of borrowing, and we’re doing a lot of hard work now as a Government to repay debt that was built up during a previous period of short-term responses.

I think your words were “not considering at this stage”, so just in terms of the specific question, what is the threshold or the price that petrol gets to in this country for you to actually consider cutting that excise tax?

You can expect us to continually weigh up what the short-term gain would be, and whether that would be of more benefit to New Zealanders than the medium-term pain that I have to be honest with you would result. I think this is a time for politicians to tell the truth, which is there is no easy answer on that because if we are to suddenly reduce petrol tax, actually every taxpayer pays for that. And they pay for that in a couple of ways: they pay for that both in terms of reduced activity on our roads, but potentially they also pay for that in increased borrowing, increased interest costs, and increased debt. So what New Zealanders can expect from us is that we will weigh that sensibly in order to deliver the best medium-term security for New Zealanders.

Can we go to Henry?

What’s the contingency plan, on fuel specifically, if we do go past those stocks? I understand we have a reasonable amount of stocks, both on the water and in the country. Have you taken any decisions yet about what might happen next? Rationing, perhaps, if needed?

Yeah, look, I mean, as you’d appreciate, it’s a pretty fluid and fast-moving situation. You’ve even seen just in the last 24 hours what’s happened with fuel. We do have really good stocks here at home, we also have very good supplies on the water, and we’ve also had very good conversations with the industry already over the last 48 hours and they are not seeing any particular hold-ups. But you also will remember that when the Prime Minister of Singapore was here, we also expanded our supply chain agreements so that in times of crisis we would receive critical supplies like fuel and pharmaceuticals, and equally in times of crisis we would provide food into Singapore as well.

So, you know, we have quite a lot of optionality and I think we’re incredibly well positioned to deal with that. We discussed this issue, based off some recent past experience over the last five to seven years, earlier in the year, and it is that point that we actually have lifted our stock cover in New Zealand, and worked quite hard to do that from the beginning of last year. So I think we’re—at this point, we’re in good shape.

But again, I just—I just want to be—all we can do is, you know, closely monitor. We’re all over what’s happening on oil impacts. We’re all over what’s happening with potentially supply chain and trade impacts. That’s why we formed a ministerial oversight group, so that we can make sure we are formally discussing it weekly as well. But, you know, it is a dynamic situation, and Nicola’s point’s the right one. We’re keeping an eye to the medium and the long term. We could do lots of band-aid solutions and stopgap measures that actually cause, you know, some short-term gain but create long-term pain, and that’s the balance that we have, being economically responsible about it.

So, sorry, the contingency plan is all about getting more in? There’s no contingency plan currently on how you might change demand if needing to?

No, we haven’t needed to think about that at this point in time. But suffice to say, what we wanted to be reassured about was that we had supplies available to us. We also have optionality through our agreement with, say, Singapore—where we source a lot of our fuel from, as you know—to actually make sure we can access that in times of crisis as well.

Have you talked to Air New Zealand at all over the last couple of days about their hedges on fuel?

I haven’t personally.

I can speak to that.

Nicola can talk to that, I know that’s been in conversations.

Yeah. I spoke with the Chief Executive of Air New Zealand last week and while they are hedged against the crude oil price, it is not common practice for aviation companies to hedge against the jet fuel price.

[Inaudible].

And you will have observed that the jet fuel price has increased significantly, more significantly than the oil price, and that is likely to have impacts for all aviation companies around the world, including Air New Zealand. That’s something that they are monitoring closely. I will leave them to comment on what the implications for their business are.

Prime Minister and Nicola Willis—

Sorry. Hi, Luke.

Hello. The oil price has gone up 25 percent today, West Texas Intermediate, and that is all driven by hard facts on the ground: wells closing in Iraq, in Kuwait, you know, attacks right across the region. It doesn’t look like it’s going to let up anytime soon by a long stretch, and it doesn’t just matter what Donald Trump does. I mean, how worried are you both about this?

Look, it’s incredibly concerning. It is a complex and evolving situation. As I said, I spoke to MBZ, the ruler of UAE, a few nights ago to get a sense from a key regional player about, you know, what they’re observing. And, you know, the hope is that, you know, actually this conflict doesn’t go beyond a matter of weeks, and whether people have got supply of munitions to continue it, you know, all of those things are being talked about, as you would be well aware of. But it’s incredibly worrying and concerning.

All I can say to you, though, is 195 other countries in the world are all dealing with this conflict, and I think we have positioned ourselves well over the last two years to make sure that we’re in a stronger position than we would have been to deal with it two years ago. And you can see that the way we’re thinking about it is we’re all over it. We’re right on top of it. We need to make sure that as it evolves that we are taking the right actions for not just the short term, but for the medium and long term.

So, you know, I think when you think about New Zealand, I think in some ways, in some of my conversations with different folk over the last four or five days, it makes New Zealand an even more attractive place for investment as you think forward from here. We’re a great safe haven. We’ve got good institutions. We’ve got, you know, good economic management. You know, those kinds of things make New Zealand a more attractive place, as one of the upsides on the downside of a conflict like this.

So I think, you know, it’s very fluid. We’ve got to keep monitoring it. It’s going to keep evolving day by day. As long as we are getting lots of good advice and we’re aware of what things to watch for and to do something about.

Can I clarify? On MBIE’s website it says that we have healthy stock levels of fuel, but that was last updated on 1 March, Sunday, 1 March. Do we still have healthy—

Yes. Yes, we do.

Yes, we do, and they have updated that. I’ll ask my office to provide you a link to the latest update, where they show supplies both in country already—

And on ships.

—and then supplies that are on ships in our exclusive economic zone, so in our foreign waters, and as I say, those provide up to another 29 days of additional stock on top of those held already in New Zealand.

Currently, no fuel companies have reported issues with supply chains?

No, no. We’ve spoken to the industry and they’re all not experiencing any issues at this point in time, yeah.

When you say “on ships in our exclusive economic zone”, presumably these are ships that are coming from offshore with—that’s an inbound supply chain?

Correct.

That’s inbound supply chain. So these are ships where we’d already ordered the fuel in advance. It’s already on its way. The point I’m simply making is we’re not talking about fuel that’s in ships that needs to pass through the Strait of Hormuz, we’re talking about fuel in ships that is within safe passage of New Zealand, and therefore we can rely on it as fuel stock.

Regarding the 2027 and 2028 FED and RUC hikes, those hikes were in the Cabinet paper for the GPS a couple of years ago. Are you holding the door open to a new—when you do up the new GPS, I think this year, potentially having a look at that and reversing it?

It’s simply the case that for those changes to come into effect the Government would have to legislate and Cabinet has not given consideration to that legislation yet. As is always the case with prudent Government, before we make decisions to legislate, we always assess the conditions that we face into at the time, and I’m simply acknowledging that that picture may look different from how it did when we put together the previous Government policy statement on transport.

NZTA is already forecasting a $6 billion hole in the land transport fund by the end of the decade, $6 billion a year, each year. That includes the 20 cent effective fee hike. What would happen to that hole if you didn’t put up fuel taxes?

You’re making my point for me, Thomas, which is that we need to be mindful that any actions in this area come with consequences. If we reduce the revenue from petrol for the Government, that necessarily reduces the funds available for repairing roads, for rebuilding them after climatic events, and for building the new roads we need for the future. So we need to weigh that up before we leap to say that we can simply, overnight, fund reductions in petrol excise, and what I’m committing to New Zealanders is that we will make carefully informed and balanced decisions that aren’t just about what feels good in the short term, but balance New Zealand’s medium and longer-term interests.

Is that a dig at Labour, who’s clearly toying with a temporary—promoting a temporary fuel tax?

No, that’s simply me focusing on New Zealand’s interests.

And it’s also us simply saying, as we’ve talked about for some time now, that prudent economic management really matters. We know we have to restock the cupboards to make sure that we can deal with any future crisis that may come our way, which is why fiscal and financial discipline really matters. And that’s why, you know, we’ve said if you actually are wanting to crank up spending, well, there’s only two ways to do it: increased taxes or borrowing. We’re sort of at the capacity of where we need to be, and that’s why we’ve got to put ourselves on a pathway of getting the books back in order. Jo?

You mentioned before that you’ve been talking with exporters and looking at alternative markets. Have you had any suggestion at this point, or that it might come soon, that produce—any product—may need to be dumped because of basically nowhere for it to go?

No, no, not at this point. I mean, our exporters have been—I have to say, Jo, over the last two years I’ve been really impressed with the literacy of our exporters in foreign markets. I’ve literally watched them move product out of the US, dealing with the tariff situation that might have been difficult or tough, move it into Europe, move it into China, move it into South-east Asia or Japan. So, at this stage, no. Again, the Trade Minister, Todd McClay, is part of our ministerial oversight group. It’s one of his responsibilities to report back each and every week as to how we are doing. But as I said, we’ve reached out to 850 exporters already, offering help/assistance with logistics and rerouting shipments that may be en route. But again, you know, we’re—

Which are the markets that are picking up more?

Well, if you look at our exports, they’ve grown $12 billion over the last year to record highs. If you just look at December quarter, I think we’re up another $2.2 billion on the previous quarter, or previous December quarter. So, you know, you’ve seen, even with a 15 percent tariff into the US, I think our exports grew 4 percent. If you look at the UK, they’re up 20 percent. If you look at Europe, they’re up 29 percent.

Where are the alternative markets? Where are you sending stuff instead?

Sorry?

The alternative markets you said. Where are you sending—

Well, it depends by sector as to where their best margins are. But irrespective of this crisis, what I mean is that they’ve got really good at identifying where they can make the most profit and the highest margin, and moving products out of low-margin markets and putting that product into high-margin markets, whether it be wine, red meat, dairy, you know, horticulture in particular.

So you’ve called this press conference to give an economic update. You’ve said you want to tell the truth to Kiwis. Can you please give us the best and worst-case scenarios that have been modelled for you?

Well, I’m just very mindful, Jenna, that there are so many factors that go into what those scenarios will look like, because what is at issue—

Treasury’s given them to you, right?

Well, they’ve given me a range of potential assumptions.

So what does it start at and what does it end at?

Well, what I can tell you is that on 1 April the Treasury will provide me the final forecasts which will feed into the Budget. Those will be our economic forecasts based on the best information we have available at the time. It is the common practice—

[Inaudible] give an economic update if you don’t have any numbers to back it up?

Because I am giving you an economic update on the potential impacts a rising oil price and rising fuel prices will have, and I’m telling you very clearly that we would expect that that would have an impact not only on the price New Zealanders pay at the pump, but also would be an upward pressure for inflation. Where inflation finally lands would depend on the duration of the conflict. It would also depend on how the Reserve Bank chooses to respond through its monetary policy settings. It will also depend on what demand there is here at home.

So, for example, you might see significant pressure on prices on the one hand, but on the other hand, if you saw a hit to consumer confidence and a reduction in spending in the economy, that could have an offsetting effect on inflation on the other hand. So there are a range of impacts that could occur, and there are a range of scenarios that could occur. We are monitoring those impacts and considering the best information that we have available to us.

I’m just unsure why you can’t be upfront as to what Treasury is telling you.

Well, what Nicola’s foreshadowing to you is that, you know, before, you know, last week, what she was saying was in her preliminary forecast—which is a preliminary designed before 1 April—is actually a more positive basis for where we’ve been heading. The growth has been stronger in the economy. You’ve actually seen it in our seven-month reporting of our financial accounts. We’ve got less debt, less expenses. There’s potentially a $2 billion OBEGALx deficit benefit, is what we saw in the December numbers. So all she was foreshadowing is up until this crisis—which is now, you know, in its second week and continuing to create risk around supply chain and potentially oil prices—is that we have been in better shape than we would have been, say, at the HYEFU forecast that you would have last had a formal update on.

I’m happy to give you an order-of-magnitude sense of it, but I do so heavily caveat it because I’m conscious that a number of factors can play into these figures. But across the range of scenarios, depending on if the conflict was to continue for three months or more, you could see an inflation impact additional to that already being forecast of between 0.5 points and one percentage, and you could see impact on real GDP of negative 0.2 to negative 0.4. But of course, what the implications would then be for 2027 and 2028 would again depend on what responses there were to that inflation in terms of monetary policy settings, and much is dependent on what happens with the global trajectory for growth.

I’m very mindful, Jenna, that there are such a range of scenarios that I can’t give you the precise figures, and I know we all want them. Believe you me, I want them. I want to be able to give New Zealanders complete certainty about what will happen. But no one in the world knows right now what’s going to happen in the Middle East and therefore what the longer-run picture is for the oil price, inflation price, and global growth, and that means there are a range of scenarios that can play out here at home. It’s fair to say none of them are good for the price of oil, none of them are good for inflation, and none of them are great for growth.

Prime Minister, just wanting to switch topic now. This is the first time that many of us have seen you since the poll result came out last week.

I thought I got to see you this morning.

You didn’t say much. That had National on 28 percent. So, I guess, how solid is your leadership and did you have discussions with people within the party over the weekend about your future in politics?

No, not at all.

And your leadership, how solid is it?

Totally solid. I can reassure you I’ll be the leader going into the election on 7 November.

And, Nicola Willis, can I just ask you, Minister Willis, you gave some pretty blunt assessments of that result in an interview last week; was that helpful?

I think I just simply spoke the truth, which of course the Prime Minister and me, the National Party, want to be polling a lot better than that number—

Yeah.

—because we want New Zealand to have the Government it deserves and we fear greatly a change of Government to a Labour-led administration. We think that would be terrible for Kiwis who have worked so hard to recover from a period of economic mismanagement, and a change of Government at this election would put that at risk, so of course we are working hard every day to ensure that more New Zealanders support the National Party at the upcoming election.

And we wouldn’t want that number on election day and it’s not going to happen.

Prime Minister, you say that you have the support of all of your Ministers, your team. What do you base that on if you haven’t gone and spoken to them over the weekend?

Well, I don’t need to. We talk all the time as Ministers and MPs. I talk to them individually.

How can you assume you have the support of them—

Because I do.

—when you don’t go and have those conversations with them?

Because I do, and we’re united. Yeah.

Did you not talk to a single person over the weekend about the result?

Oh, look, I talk to my Ministers and MPs all the time. In passing, I talked about the poll result, but I didn’t—but I talked about lots of other things. As I said, I was talking to Judith Collins over the weekend. A lot of it was around this and around defence. In passing, I would have talked about the poll, I’m sure, but it hasn’t been a major focus of mine.

You said there was no specific conversations solely about the poll—

No, no.

—but it may have been raised in other conversations that you were having?

Oh, just in general. I mean I talk to Ministers, you know, every couple of days, if not every day—most of them—and of course, you know, we talk about topics of the week. And, you know, as you said, there’s no perfect week in politics. Last week wasn’t a perfect week, and it’s not surprising that I’d raise that or talk about that in passing. But only in passing.

Do you plan to raise those poll numbers tomorrow at the caucus meeting?

We don’t talk about what happens in caucus. But just as I said to you, we’ve got a unified caucus.

Are you expecting to hear about those poll results from your members?

I’m not, no. No. We have got a lot on our caucus agenda. We talk about lots of different things. We’ve got a pretty straight-up culture inside our team, which Nicola and I built since we took over as leaders, and we talk about a range of different things.

On your internal polling at the moment, are you sharing that with your caucus?

Yes, we do.

Every week?

I’m not going to go into how we do it or how frequently we do it, but yes, we do. Yeah.

What compelled you to shut down those rumours on Friday afternoon that you were going to go away and weigh up your options?

Well, I’ll be honest, I was—I left here on Wednesday, I went up to Wairarapa on Thursday, I was at Golden Shears and spending a day with Mike Butterick and a number of meetings up there. The next day, Friday, I was in my electorate doing a series of events. I got back to my office in Auckland on Friday afternoon, realised that the media had gone a bit bananas on it all, frankly, and thought, right, I’d better shut this thing down. And so that’s why I made the intervention and talked to Heather at ZB as soon as I could, just to—you know, I think everyone got a bit worked up about it.

Do you think the media reports this stuff without talking to people close to you?

Jenna, I saw you out there today at the airport and at the Parliament and I’m sure you’re talking to all of our team, but I’m just reassuring you that our team is solid. We are good. And I know it’s a big deal for you guys for the last week. It’s one of many public polls. We are very, very focused. And frankly I’d just say to you the reason I don’t comment on polls is because there’s a lot of them and they often can say different things, but the main reason is because I’m talking to Kiwis every day and every week and the key thing is their poll, which they tell me is they’re frustrated with the cost of living and they’re frustrated with the speed of the economic recovery—as Nicola and I are as well—and that’s what they want us to do. And come November 7, they get a great chance to have their say. Importantly, I can tell you “spend more, tax more, borrow more” ain’t it.

You say it’s a big deal for us in the media. Don’t you think it’s also a big deal for the backbench MPs in your party who may lose their job if that 28 percent result is borne out at the election?

Well, as I said, our caucus is solid.

Sorry, just back on the Iran crisis, Minister Willis, is there any chance—are you preparing any plans in your head, even—on the potential need to bail out Air New Zealand once again if this keeps going?

I haven’t received advice that would suggest that’s necessary at this time. Of course, as the major shareholder in Air New Zealand, we expect them to keep us appraised of their financial situation.

And I’d also say, Henry, you know, having watched Air New Zealand prices over the last—for fuel over the last 10, 15 years, there have been times of much more elevated fuel prices for New Zealand and they’ve dealt with that pretty admirably.

Prime Minister, what skills do you bring to the leadership that no one else in your party can?

Oh, look, I think my focus is on building a great team and actually getting things delivered and done. As I’ve said—and you heard me say it last week—I’m not a career politician. I’m not going to have the perfect soundbite. I can reassure you, the one thing I can guarantee you going forward from here is there won’t be perfect soundbites in the future either, but that’s because I’m not a creature of this place and been here 20 years. I think actually people who know how to get things done and how to get the best out of a team and get the right Ministers on the right assignments is really important. We’ve had Prime Ministers in the past that are fantastic communicators but don’t deliver, and New Zealanders are over that and they just want me to get on with the job and that’s what I’m doing.

Prime Minister, do you think that communicating to the public—which often is actually through the media, through the interviews you do and through these sorts of press conferences—that it’s important for the Prime Minister to be able to communicate?

Oh, absolutely, and that’s why I’ve got so many media engagements in any given week. I mean, that’s what we’re doing here, right here, right now. All I’m saying to you is that New Zealanders out there aren’t talking about—you know, they’re not talking about polls. They’re actually talking about—they want to know about the economy and what we’re doing to fix it. That’s really what their focus is when I talk to them.

But is that something that you are actively working on? Or I guess the other way of saying that is: do you think that you have an issue with communicating effectively to the public?

No. No, I think, you know, I try and engage with you guys as much as possible and media through the course of any given week. Equally, there’s a fragmented media environment. We have a big focus on social media and other alternative channels to get our messages out to people as well, and we’ll continue to do as much as we can.

Do you believe that the New Zealand economy is overly reliant on imported fossil fuels like oil? You can imagine if we had more EVs, more electrification, we might be more resilient to those sorts of price rises. It wouldn’t eliminate it completely by any means, but we’d be more resilient. Is that a future that you—

Well, I think the first thing I’d say is, you know, New Zealand’s a top 10 country in terms of its proportion of energy coming from renewable sources. So we run at about 87, 88 percent. As you heard me say—and I don’t think was probably reported with great fanfare in recent weeks—you know, in the last quarter, October quarter, you know, we had the lowest emissions in this country that we’ve had since 2010. And we are also experiencing a massive renewables boom that’s up and running and underway in this country, and it’s really exciting to see. It’s domestic investors, it’s international investors wanting to invest in solar and wind and geothermal. You’ve seen that with Contact’s result recently as well.

So, you know, we need to double the amount, the quantum of renewables. That’s what we call “electrify New Zealand”. But as you’ve also heard us say, our biggest challenge with that mix of energy is that you create a dry year risk, and with a dry year risk comes a pricing premium that gets built into power bills. And so we need to acknowledge that we do need thermal [Inaudible] energy as well. It’s an “and, and, and”, not just one or the other, because as you’ve seen in 2004, we get caught really badly, prices spike and people lose their jobs, good people lose their jobs because of poor energy policy and management.

Putting aside the electricity generation component of it—because we’re 80 to 90 percent renewable electricity, but energy we’re maybe 40 percent renewable because we have things like oil going into our vehicles, how we get everything around in the economy—is there value to New Zealand in reducing our exposure to these price shocks, which happen not irregularly, by electrifying those, you know, sources of energy demand?

Well, of course, but that is the journey that we have been on, and we continue to, you know, actually take action and get investment moving into those spaces. You can talk about those things as much as you like, but actually we’re a Government that does do the action and the investment as well, and that’s what you’ve seen us do, and that’s why we have got a renewables boom up and running. So of course we want to move in that direction. But it’s also not being naive to say there is no reason why people should have lost their jobs at mills across New Zealand in 2024, no reason whatsoever. And yet we know why. It was an oil and gas ban. It was actually, you know, $800 megawatt-per-hour our wholesale electricity prices. And for our—you know, and it leads to de-industrialisation and it obviously leads to people losing their jobs and that’s not, that’s not right. And so we’re balancing the economic and obviously the environmental pieces. And it is—energy security is national security and is our economic security as well.

Sorry, last question at the back, because you haven’t had a question and then we’ll go. Thank you.

Thank you. Prime Minister, you mentioned that you were out speaking to Kiwis quite a lot of the time. Why do you think they voted or gave you a 28 percent poll result? Like, if you put yourself in their shoes, what do you think it is about the Government or your party that is upsetting them, perhaps?

Look, I’m sorry, I’m just not commenting on a particular public poll. You hear me all the time say to you I don’t comment on the polls because there’s so many of them, and there’s now a lot of public polls in New Zealand. I can often have two polls in any given week. And I’m telling you the New Zealanders out there are not asking me the questions that you’re asking me to say, “Let’s have another conversation and use this session to talk about polls”. Why don’t we talk about what we’re doing to grow the economy, to lower the cost of living for Kiwis? That’s what they actually say to me each and every day. They’re frustrated that they want a faster pace of the recovery. I am. So is Nicola. That’s what we’re working hard to do.

Related to that, RNZ reported last week that you no longer read focus group research because it’s so overwhelmingly negative about you. Is that correct?

That’s rubbish.

The bond market’s had a bit of a moment today. Bond yields have spiked. Have you received any advice from Treasury about that? If so, you know, what’s the vibe of it, and will you be looking at debt issuance costs again as you finalise the Budget?

Look, the first thing I want to say is that we need to remember that New Zealand is currently borrowing from the world in order to pay for our day-to-day operations as a country, whether that’s in our health system, our education system or elsewhere. We are still repaying the debt that was built up during and after COVID. It is the case that our bond issuance, which occurred last week, saw good market demand and no problems with bond purchases. I will continue to get regular updates from New Zealand Debt Management on what they’re seeing in international markets. As I said in my earlier remarks, we have seen upward movement in interest rates internationally and New Zealand will not be immune from that. However, we—as of the latest information I received—are still well placed in terms of our bond issuance and our ability to cover our debt position. We also, of course, have a significant liquidity buffer. Were there to be any volatility occurring in global markets, we have already ensured that we will be resilient to that.

OK, team, going to wrap it up there.

When you’re looking at the Budget, though, are you thinking about signalling, I suppose, that going forward there is a renewed focus on the deficit and on our ongoing borrowing to ensure that in the long run, those yields remain sustainable for the Government?

I have been utterly consistent these past two years in working to remind New Zealanders, not least the Opposition, that no borrowing is for free. And the reason as a Government we have worked so hard to make savings across Government, $43 billion worth of savings so far, is to put us in a better position for when the inevitable rainy day comes. And when global shocks such as that currently occurring unwind, New Zealand is better placed if we have a lower debt position, and so I stand by our Government’s fiscal strategy, which has been resolutely about getting the books back into better order, reducing debt so that we’re better placed to withstand future shocks.

OK, team. We’re going to end. Thank you.

That’s always been my position. I look forward to you asking others about theirs.