Prime Minister Christopher Luxon has delivered a refreshed team focused on unleashing economic growth to make people better off, create more opportunities for business and help us afford the world-class health and education Kiwis deserve.
“Last year, we made solid progress on the economy. Inflation has fallen significantly, and now a steady march of interest rate cuts are translating into real financial relief for households,” said Luxon.
“Having set the building blocks for rebuilding the economy, 2025 is all about going for growth, and I am refreshing my team to underline this priority.”
In addition to her role as Minister of Finance, Nicola Willis has become the Minister for Economic Growth – formerly known as the Economic Development portfolio. Her focus will be on leading the Government’s growth agenda to unleash the potential of New Zealand businesses to grow, develop talent and attract investment.
She will coordinate and strengthen efforts to deliver economic growth and take responsibility for new initiatives to promote growth and productivity in the New Zealand economy.
“In 2024, Nicola did a fantastic job delivering tax relief for hardworking Kiwis and restoring a culture of fiscal discipline, with New Zealanders now seeing the benefits in the form of lower inflation and interest rates. In 2025, I’m confident she will bring that same focus and dedication to the task of unleashing Kiwi businesses to grow at pace.
Finance Minister Nicola Willis has hailed a drop in the domestic component of inflation.
Stats NZ reported that inflation was 2.2 percent in the year to December, the second consecutive quarter that the annual rate has been within the Reserve Bank’s target band of one to three percent.
Willis said it increased the prospect of mortgage rate reductions and a lower cost of living for Kiwi households.
“The domestic component of that inflation – non-tradables – declined from 4.9 per cent in the year to September to 4.5 per cent in the year to December,” said Willis.
“Decisions about the Official Cash Rate are a matter for the Reserve Bank, but the decline in domestic inflation is good news for people with mortgages. Together with other recent economic data showing there is spare capacity in the economy, it suggests there is scope for further rate reductions in the coming months.”
She said it also showed the government's steps to reduce inflationary pressures by restoring discipline to public expenditures, which have been working.
Lower inflation and interest rates set the foundations for economic growth and the investment, jobs, and incomes it creates. The benefits of restoring discipline to public spending have started flowing through people’s bank accounts.
Recent data published by the Reserve Bank showed the average interest rate paid on residential mortgages fell in November for the first time since September 2021.
“Further drops in coming months will reduce the cost of living pressures on households, free up cash to be spent in local businesses and encourage investment and growth.”
Health was another priority area. Last year, Dr Shane Reti worked hard to reset the culture and performance of Health NZ. Establishing targets and refreshing their leadership was critical, and Luxon was confident the organisation was heading in a much better direction.
Due to Kiwis’ concerns and expectations to see even more progress and ensure they can access the care they need when they need it, Simeon Brown will become Minister of Health.
“Simeon is an outstanding and diligent minister who has done an excellent job delivering on the Government’s priorities. Off the back of that performance, I have decided his skills are best placed to take leadership of our health system going forward,” said Luxon.
Dr Shane Reti will take on an essential new role, assuming responsibility for New Zealand’s universities and science sector, which is expected to be critical in the economic growth plan.
Other Ministers are also expected to play even more significant roles in the plans to unleash economic growth in 2025.
Chris Bishop has become Minister of Transport, taking responsibility for an additional part of the Government’s ambitious infrastructure agenda.
Louise Upston picked up tourism and hospitality, a critical industry that promotes growth and employment in regional New Zealand. She is also the Deputy Leader of the House.
Judith Collins KC is the new Minister for the Public Service, while Mark Mitchell picked up the Sport Recreation and Ethnic Communities portfolios.
Simon Watts has taken on the Energy and Local Government portfolios, areas with significant reforms underway and expected to play a major role in the growth plan.
Outside Cabinet, Chris Penk picked up Small Business and Manufacturing, while Andrew Bayly became Minister for ACC.
James Meager will take on the Hunting, Fishing, and Youth portfolios and the newly created role of Minister for the South Island. He will also be an Associate Minister of Transport.
Luxon also acknowledged Melissa Lee’s contribution to the Government over the last year.
“She has worked incredibly hard engaging with the range of ethnic communities calling New Zealand home, and I thank her for that service.”
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