The election year blame game over the state of the economy is underway, with all the accompanying fanatical partisan vehemence that makes the politicians' claims and counterclaims tedious and pointless.

National will always say that they have spent their time in government cleaning up the unmitigated mess left by the last Labour government. And Labour will shamelessly claim that National has wrecked all the economic gains they secured while in office. The only point both have in common is their blind insistence that, based on their respective records in government, the other side should never be trusted in office again. But the underlying truth is that neither should be believed when it comes to their claims about how well they can manage the economy.

The best way to assess the relative economic achievements of both the current government and its Labour predecessor is to strip away the “they said, we said” rhetoric and compare the situation at the end of 2023, when the government changed, and now.

The rising cost-of-living was an issue that dominated the last election campaign and still rates highly as a major concern today. At the end of 2023, the annual increase in the cost-of-living was measured at 7.3%, whereas today it is recorded at 3%. The annual rate of inflation was 4.7% at the end of 2023, today it is around 3.1%.

 Mortgage interest rates have dropped from, around 7% to around 5% today. The cost of buying a house, which reached peak unaffordability in 2022, has now returned to the more sustainable levels being recorded before the Covid19 pandemic, although the government may not want to see house prices falling too much further in election year.

Annual GDP growth which was -0.1% at the end Labour’s reign has now improved to around 1.8%, although still well short of that of many of our trading partners. Net core Crown debt has remained at just under 42% of GDP over the last three years, much lower than that of other countries. Over the period government spending as a percentage of GDP has fallen only slightly from 33.4% in December 2023 to 32.8% now.

On unemployment and job growth, the picture is starker. Unemployment has risen from 4% at the end of 2023, to 5.4% today, its highest level in more than a decade. Although the latest quarterly figures show the first increase in the numbers of people being employed since the middle of 2024, the overall number of jobs in the economy has fallen about 32,000 from its peak at the end of 2023,

When Labour left office, opinion polls recorded 31% of respondents believing New Zealand was heading in the right direction, and nearly 58% believing it was heading in the wrong direction. Today, the number of “right direction” respondents has increased marginally to 32.6%, while the “wrong direction” respondents have fallen to 49%. ANZ Bank reported in December 2023 that business confidence was at a 30-year high, with 64% of respondents expecting better economic conditions ahead. By the end of 2025, that level of optimism had risen to a new record level of 74%, although it has dropped back since.

The picture that emerges is that the economy is performing better today than it was at the end of 2023, but the turnaround has been slow and cautious. Although the overall picture tilts slightly in favour of the coalition government, the margins are slim. So, while the government may be able to say it has turned things around, it still has some way to go to achieve its campaign commitment to get the country properly “back on track.”

Unemployment and its social consequences remain the government’s Achilles’ heel, the small growth in jobs recorded over the last quarter notwithstanding. And while the statistics may tend in its favour, public perceptions of the government’s performance are not nearly as positive. For example, in the latest Ipsos Issues Monitor poll, Labour was rated as more capable than National on handling 15 of the top 20 issues facing the country, including the top issue of the cost-of-living.

Nevertheless, the overall data provides enough signs to give the coalition parties more cause for optimism than their opponents. Added to that are the opinion polls showing a small but increasing lead for the centre-right bloc over the centre-left. But these various results and the economy’s steady, not spectacular, recovery are not yet sufficiently conclusive to guarantee electoral success.

While people remain sceptical about this government’s performance, they are even more so about its predecessor. They remain to be convinced either bloc has the answers.

They want parties to promote practical solutions for the problems at hand, rather than more overblown rhetoric and fanciful promises.