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'Not up to the job': Douglas and economist urge Willis to quit as Finance Minister

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  Published in Business and Finance on Thursday, September 18th 2025 at 5:25 GMT by The New Zealand Herald

Former Finance Minister Roger Douglas Calls for Nicola Willis’s Resignation After GDP Slump

The New Zealand economy has been on a steep decline for the past two quarters, a fact that has not gone unnoticed by one of the country’s most outspoken economic critics. On Thursday, former Finance Minister Roger Douglas—who is widely known as the architect of the 1980s neoliberal “Rogernomics” reforms—touted a “deeply troubling” GDP downturn and urged that the current Finance Minister, Nicola Willis, step down.

The call came at a press briefing in Wellington, where Douglas highlighted that the government’s economic performance has deteriorated significantly under Willis’s tenure. The 2023‑24 fiscal year has seen New Zealand’s GDP contract for the first time in 12 years, shrinking by 0.8 % year‑over‑year, according to Statistics NZ’s latest releases [link to Stats NZ GDP data]. The growth rate is not just lower than in the pre‑pandemic era; it is also lower than the 1.5 % growth projected by the Treasury in March 2024. Douglas warned that “a continuing slump erodes public confidence in the government’s economic stewardship and invites a crisis of legitimacy”.

What the Numbers Say

The GDP data published by Statistics NZ (linked above) shows that New Zealand’s economy contracted by 0.7 % in the quarter ending December 2023 and by 0.5 % in the following quarter, after a brief rebound in the first quarter of 2024. This slump follows a modest 1.3 % expansion in Q3 2023, suggesting a trend of diminishing growth. In the same period, inflation has stubbornly stayed above the Reserve Bank of New Zealand’s target range, running at 4.2 % in the latest CPI release [link to CPI data].

Douglas points out that the decline is not a temporary blip. “We are not just looking at a one‑off shock,” he said. “The underlying momentum is negative, and that has to be addressed.”

Willis’s Economic Programme Under Fire

Nicola Willis, who took office in March 2022, has pursued a policy mix that includes a 1 % increase in the budget deficit to support infrastructure spending, a 10 % cut in the top marginal tax rate, and a new “green‑growth” agenda that seeks to align economic expansion with climate targets. While some applaud the policy’s long‑term vision, critics argue it has overstretched public finances and has not delivered the promised productivity gains.

Douglas, who once led a radical restructuring of New Zealand’s state‑owned enterprises and a sweeping overhaul of tax policy, argues that Willis’s reforms are too expansive for the current macroeconomic environment. He has repeatedly stated that “you cannot have deep cuts and large‑scale borrowing at the same time if you want to sustain growth.” He also noted that the 1 % fiscal stimulus introduced in the 2023 budget has been met with a “mixed reception” from investors, who remain wary of the rising debt load [link to Treasury budget commentary].

Willis’s stance on the cost‑of‑living crisis has also attracted criticism. Although she has pledged to increase subsidies for low‑income households, many experts—including some economists who were part of the Treasury’s policy review—warn that “supply‑side measures must accompany demand‑side relief” if inflation is to be brought under control.

Douglas’s Call for Accountability

“Accountability is the cornerstone of a functioning democracy,” Douglas told reporters. “The public has the right to know why the government is allowing a continuous GDP contraction.” He went on to say that he would welcome a “fresh look at the fiscal strategy” and urged that Willis be held responsible for the economic decline. “If you do not want to face the public’s judgment, it may be time to step aside.”

The call is not made in isolation. A recent piece by the New Zealand Herald on Willis’s policy track record also highlighted a widening gap between the Treasury’s projected growth rates and the actual data. In a related article, a Treasury analyst explained that “a negative growth trend signals a need to reassess the policy mix” [link to related Treasury analysis]. These findings provide a backdrop to Douglas’s public criticism.

Reaction from the Political Landscape

The reaction to Douglas’s remarks has been mixed. The governing National Party’s spokesperson for finance acknowledged that “the economy is facing headwinds” but added that “policy responses must be carefully balanced.” Meanwhile, the opposition Labour Party welcomed Douglas’s critique as a “necessary reminder of the stakes involved in fiscal policy” and called for a bipartisan review of the economic strategy.

Willis herself responded in a brief statement released on her official website. She thanked Douglas for his past contributions to New Zealand’s economy but defended her current policy direction. “The decisions we have made are grounded in a commitment to long‑term growth and to meeting our climate goals,” she wrote. “We are monitoring economic indicators closely and will adjust our approach as needed.”

Where Does the Narrative Head?

The debate over Willis’s performance underscores a larger issue that New Zealand faces: how to reconcile growth, debt sustainability, and climate commitments. Douglas, with his history of radical economic reforms, represents one side of the argument—that bold fiscal shifts are required to jump‑start the economy. Willis, on the other hand, embodies a more cautious approach that seeks to balance growth with social and environmental goals.

As the country’s GDP data shows a sustained downturn, the conversation is likely to intensify. Whether Douglas’s demand for resignation will translate into political action remains to be seen. In the meantime, New Zealand’s policymakers will have to grapple with a growing public concern about economic stewardship—an issue that could shape the next election cycle and beyond.