“Government of Despair”: Unemployment Hits Decade High as Labour Slams Willis over “Embarrassing” Job Figures
By Lions Roar Aotearoa Economic & Political Bureau
WELLINGTON — Wednesday, February 4, 2026 — The National-led coalition is facing a firestorm of criticism today after the latest Stats NZ figures revealed that New Zealand’s unemployment rate has surged to its highest level in over ten years.
The data, which shows the unemployment rate climbing to 5.4 percent for the quarter ending December 2025, has triggered a war of words in the capital. While Finance Minister Nicola Willis claims the economy is “stabilizing,” opposition leaders say the government is in “total denial” about the financial pain being inflicted on New Zealand families.
1. The Data: A 10-Year Low for Job Security
The jump from 5.3 percent to 5.4 percent in the final quarter of the year caught many off guard, exceeding the forecasts of both private-sector economists and the Reserve Bank.
- A Decade High: This is the highest unemployment rate recorded in New Zealand since March 2015.
- The Imbalance: Stats NZ reported that while 15,000 jobs were created during the quarter, the number of people entering the workforce and actively seeking work significantly outpaced the new roles available.
- Slowing Wages: In a double blow for workers, wage growth has continued to decelerate, meaning those still in employment are seeing their paychecks fall further behind the cost of living.
2. Willis Finds the “Silver Lining”
Despite the grim headline figure, Finance Minister Nicola Willis remains steadfast in her belief that the economy is turning a corner.
“We are working very hard to get unemployment to come down,” Willis said. She pointed to the 15,000 new jobs created as a sign of underlying strength. “The fact that more people are feeling optimistic about getting a job and are entering the workforce is positive. Economists are interpreting this data to mean we are getting that stabilization and recovery.”
Willis argued that the increase in hours worked and the growing labor participation rate suggest that the economy is “mopping up” excess capacity before a broader recovery takes hold.
3. Hipkins: “You Can’t Spin Your Way Out of This”
Labour leader Chris Hipkins was quick to dismiss the Finance Minister’s optimism, calling the figures an “indictment” on the coalition’s economic management.
“This is incredibly embarrassing for Nicola Willis,” Hipkins said during a press conference today. “For over a year, they’ve been talking about ‘green shoots’ while for many families, things have continued to get worse. These are real people who cannot find work when they need it. The government needs to own up to the fact that they are making things worse, not better.”
Hipkins accused the government of being “in denial” about the damage caused by austerity measures and high interest rates, which he claims have stifled business confidence and job creation.
4. Greens Warn of “A Government of Despair”
Green Party co-leader Marama Davidson went further, labeling the coalition a “government of despair.” She highlighted the social toll of the rising unemployment rate, noting that food banks are currently overwhelmed and homelessness is becoming increasingly visible.
“There are more people without jobs and without income now than at any time in over ten years,” Davidson said. “Groceries and bills continue to rise ahead of wages. A just government would be fighting to make sure everyone had a good job, food on the table, and a safe place to call home.”
5. The Outlook for 2026
With the unemployment rate now sitting at a decade-high, the pressure on the Reserve Bank to reconsider the OCR (Official Cash Rate) is mounting. Economists are divided on whether the “stabilization” Willis speaks of will result in a soft landing or if the job market will continue to deteriorate through the first half of 2026.
