Economics is seldom melodic, but this a document riddled with misty water-coloured memories of 2025 — back when a booming world economy was carrying New Zealand along with it and prospects for recovery looked promising, even though United States President Donald Trump had just thrown his tariff tantrum.
Despite that wrinkle, things were so simple then.
But those smiles have now been left behind — again, thanks to President Trump.
It now costs upwards of $3.50 a litre to fuel the vehicles on those farms, and the trucks and ships taking milk and meat to markets — and who knows what diesel and petrol might cost if war flares up again in the Middle East?
Budget 2026 hedges its bets on what this all might mean: ‘‘slower near-term recovery’’ means that time is rewriting each line even as the Treasury prepares its latest forecasts.
The predicted ‘‘sustained medium-term upturn’’ may prove wildly optimistic if the missiles and drones are still raining down six, or even three, months from now.
Let us assume our glass — likely to be of Fonterra export-grade milk — is half full.
The war ends soon, the economy keeps growing and Ms Willis secures the ambitious holy grail that she has set out as her aim — a return to surplus in 2028-29.
Admittedly it is not much of a surplus — just over $2 billion — and its future existence is subject to all sorts of caveats.
But, having pushed out the expected date for a return to surplus in Budget 2025 to 2029-30, even being within cooee of achieving it is no mean feat.
In 2025 it was changes to pay equity, in 2026 it is cuts to government department budgets and mass layoffs of public servants.
As the update notes, a fiscal consolidation of 3.5% of GDP is predicted over three years.
Of that, 2.3% will be due to ‘‘a reduction in core Crown expenses as a share of GDP’’ — a more bland way of saying what was in the preceding paragraph.
Something else which may throw a spanner in the works is inflation — picked to hit the fuel price-driven realms of 4%+ before dropping back down again.
Ms Willis — who will have breathed a sigh of relief when the Reserve Bank left the official cash rate the way it was on Wednesday — will be hoping that expected surge takes a few more months to be painfully apparent to New Zealand consumers.
In the alternative, what is too painful to remember we simply choose to forget, and Ms Willis has come up with a handy distraction in Budget 2026: a levy on banks and other financial institutions to pay for the Reserve Bank.
It will garner about $50 million a year, a drop in the bucket of a multibillion-dollar annual tax take — but its value will be more political than practical.
Those who have recently lost their jobs will see little to cheer them in the update: while unemployment is tipped to soon peak at 5.5%, it will still be riding at a still uncomfortably high 4.3% by 2030.
A potential silver lining is that house prices are tipped to rise, not fall — assuming interest rates remain manageable and a mortgage can be serviced.
All of which suggests that the squeezed middle whom Ms Willis campaigned to save in 2023 will still likely find themselves in tight economic circumstances in 2026, and in the years ahead.
To quote Babs again: ‘‘If we had the chance to do it all again, tell me, would we? Could we?’’
Voters will make that call when it comes to ‘‘Willis-nomics’’ on November 7.
