{"id":503520,"date":"2026-06-30T23:31:09","date_gmt":"2026-06-30T23:31:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/503520\/"},"modified":"2026-06-30T23:31:09","modified_gmt":"2026-06-30T23:31:09","slug":"imf-releases-nz-report-card-how-do-political-parties-policies-stack-up","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/503520\/","title":{"rendered":"IMF releases NZ report card. How do political parties\u2019 policies stack up?"},"content":{"rendered":"
Spend less<\/p>\n
The agency suggests the Government somehow reduces the cost of New Zealand Superannuation over time. <\/p>\n
National and Act are supportive of raising the age of eligibility for NZ Super from 65. The other parties in Parliament don\u2019t want to reduce NZ Super entitlements.<\/p>\n
The IMF also believes KiwiSaver contribution rates need to continue rising, as does participation in the scheme. <\/p>\n
National, NZ First and Opportunity are advocating for making KiwiSaver membership compulsory and lifting minimum contributions over time. <\/p>\n
Act is generally in favour of letting people decide how they save for their retirements. Labour, the Greens and Te P\u0101ti M\u0101ori are yet to release pre-election KiwiSaver policies.<\/p>\n
The IMF says governments will need to be disciplined when delivering budgets for some years to come, especially given the cost of NZ Super and bolstering the country\u2019s defence capabilities. <\/p>\n
It believes more fat can be cut out of the system, but commends the Government for not making more drastic reductions at a time the economy has been struggling. <\/p>\n
Tax more <\/p>\n
The IMF recognises cost-cutting alone could reduce the quality and delivery of public services, so believes changes to the tax system are required too.<\/p>\n
Act, and to a lesser degree, National, are the only political parties that advocate for reduced government spending. <\/p>\n
The IMF recommends New Zealand introduces a comprehensive capital gains or land tax.<\/p>\n
While a few political parties want to increase taxes, none want to do so to pay down debt, as the IMF suggests, saying: \u201cAny revenue overperformance should be saved to accelerate buffer rebuilding.\u201d<\/p>\n
Labour wants to introduce a narrow capital gains tax on investment residential property. It wants to spend the additional revenue on various new initiatives, including making it free for all New Zealanders to visit the GP three times a year and removing $5 pharmacy prescription fees.<\/p>\n
Opportunity wants to introduce a land tax and use this revenue to provide a universal basic income. <\/p>\n
The Green Party and Te P\u0101ti M\u0101ori want to make a raft of tax and welfare changes aimed at supporting beneficiaries and lower-income earners at the expense of higher-income earners, big companies and those with a lot of wealth. <\/p>\n
Act, and to a lesser extent National and NZ First, advocate for lower taxes and more of a user-pays approach.<\/p>\n
Foster growth <\/p>\n
The IMF says structural reforms are \u201ccritical\u201d to boosting productivity, growth and living standards. <\/p>\n
\u201cBroad-based reform efforts should focus on deepening domestic capital markets, strengthening product market competition, easing barriers to foreign direct investment and technology diffusion, and improving regulatory settings and public investment management,\u201d the IMF says.<\/p>\n
\u201cPolicies that strengthen the incentives and conditions for investment are critical, including improving access to long\u2011term finance, reducing regulatory barriers to business expansion, and fostering competitive product and labour markets.\u201d<\/p>\n
There are several policies across the political spectrum aimed at addressing the above. <\/p>\n
Generally speaking, National and Act favour more foreign investment, deregulation and the recycling of state-owned assets. <\/p>\n
Labour, NZ First and the Greens are more comfortable with the government intervening in markets \u2013 be it to enhance workers\u2019 rights, support certain sectors\/causes, or promote competition. <\/p>\n
The IMF says New Zealand is making progress adopting AI, but job listings suggest there is less demand for AI-related skills than in leading advanced economies. <\/p>\n
\u201cContinued progress on the structural reform agenda \u2013 including the Commerce Act review, Capital Markets Reforms, and review of research and development tax incentives \u2013 would help New Zealand convert its strong AI preparedness into economic gains.\u201d<\/p>\n
Prepare for possibility of higher inflation, slower growth<\/p>\n
The IMF sees the annual inflation rate peaking at 4% in mid-2026, thanks to high oil prices, before dropping back. <\/p>\n
It believes the Reserve Bank should lift the Official Cash Rate (OCR) from the stimulatory level it\u2019s at, to a more neutral level by the end of the year.<\/p>\n
This would balance support for the economy with keeping inflation expectations anchored.<\/p>\n
The agency sees risks to the inflation outlook being skewed to the upside, given the possibility of renewed conflict sending oil prices north again, so believes there is a chance the Reserve Bank will have to hike the OCR more aggressively.<\/p>\n
It notes the importance of Reserve Bank independence, saying that \u201cin an environment of elevated uncertainty and more frequent shocks, safeguarding the credibility of the monetary policy framework is essential\u201d.<\/p>\n
As for economic growth, the IMF\u2019s central projection is for the economy to grow by 2% throughout 2026, with this rate rising to 2.7% in 2027, as \u201cpent-up demand and business confidence recover, supported by continued strong exports of agricultural products and tourism\u201d.<\/p>\n
However, there is a risk the conflict once again hamstrings New Zealand\u2019s economic recovery. <\/p>\n
\u201cThe more frequent materialisation of external shocks, including geo-economic fragmentation, trade disruptions, and natural disasters, poses continuous risks,\u201d the IMF says.<\/p>\n
\u201cConversely, a stronger transmission of monetary accommodation, or productivity gains from structural reforms could support a quicker rebound.\u201d<\/p>\n
The IMF\u2019s comments make up its preliminary findings of a routine review it does of New Zealand.<\/p>\n
The review saw its staff meet with Finance Minister Nicola Willis, Reserve Bank Governor Anna Breman, Secretary to the Treasury Iain Rennie, other senior officials, members of Parliament, analysts, think tanks, trade union representatives, and business groups.<\/p>\n
Jen\u00e9e Tibshraeny is the Herald\u2019s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.<\/p>\n