Letter to Hon Nicola Willis (Minister of Finance)

 

Dear Minister Willis,

Thank you for your reply of 12 August 2026. After reviewing your letter carefully, I must raise several concerns. Your response does not address the substance of the issues I raised, and in several places reframes the questions in ways that avoid the strategic vulnerabilities facing New Zealand.

I will address each point in turn.

1. Global Gold Accumulation Trends Are Not a “Commodity Trend”

You wrote:

“The Government has not directed the RBNZ to undertake a gold-specific review because the current statutory framework is not built around any single commodity…”

This reframes my question.
I did not ask why New Zealand does not hold gold.
I asked why New Zealand has not analysed global gold accumulation trends, which are a macro‑financial signal of geopolitical realignment.

Gold accumulation by sovereigns is not a “trend”. It is the oldest and most durable form of wealth storage known to civilisation, and it is being accumulated at record levels by central banks worldwide. This is a strategic indicator, not a commodity preference.

2. Exporting $1.1B of Gold While Holding Zero Reserves Is a Strategic Vulnerability — and the 1% Royalty Is an Insult to New Zealanders

You wrote:

“Export production of gold and official reserve management are separate issues.”

Technically true, but strategically incomplete.

New Zealand exports over a billion dollars of gold annually while holding zero gold reserves. This is not about commercial mining operations — it is about national resilience. Other nations are increasing gold reserves precisely because they anticipate volatility in fiat reserve currencies.

More importantly, the current royalty regime — which returns approximately 1% of the value of extracted gold to New Zealand — is not merely outdated. It is an insult to every New Zealand citizen.

New Zealanders are effectively being punished by a system that gives away sovereign assets for virtually nothing. No private business would tolerate receiving 1% of the value of its own product. Yet the Government expects the public to accept this arrangement as “policy”.

This is not economic stewardship.
It is economic negligence.

3. USD Reserve Decline and BRICS Commodity Settlement Systems

You wrote:

“Publicly available reporting suggests these remain evolving, uncertain, and not yet a replacement…”

This does not answer the question.

Strategic modelling is not about waiting until a system is fully mature. It is about anticipating emerging risks. The USD is already under pressure, and the United States is now well above $40 trillion in federal debt — a figure that no serious analyst considers sustainable.

Many financial analysts — including those cited by BIS, IMF working groups, and major private-sector institutions — warn of significant USD instability in the near future. Whether one agrees with them or not, the existence of these warnings requires modelling.

New Zealand has done none.

4. The 2022 Framework Review Was Statutory Compliance, Not Strategic Adaptation

You wrote:

“The Framework… took effect from December 2022.”

This does not answer the question I asked.

The issue is not whether a framework exists.
The issue is whether New Zealand has reviewed its reserve strategy in light of global monetary changes.

Your reply confirms that it has not.

5. “Floating Exchange Rate as Shock Absorber” Is Not a Strategy

You wrote:

“New Zealand’s floating exchange rate remains an important shock absorber.”

This is an ideological position, not a strategic one.

A floating currency does not protect New Zealand from:

reserve composition risk

commodity dependency

geopolitical monetary fragmentation

USD reserve decline

BRICS commodity settlement systems

Relying on other nations’ currencies — especially those heavily exposed to USD risk — is not a resilience strategy.

6. Cross‑Agency Review

You wrote:

“If Treasury and the RBNZ advise that changing global conditions create a material risk… then the Government would consider…”

This creates a circular dependency:

The Government will act only if agencies identify risks.

The agencies are not being directed to analyse the risks.

This guarantees inaction.

Summary

Your reply suggests that New Zealand’s reserve strategy is still operating on assumptions from the early 2000s, despite clear global shifts in:

sovereign gold accumulation

USD reserve diversification

commodity‑settled trade systems

geopolitical monetary fragmentation

New Zealand is a small, trade‑dependent nation. We cannot afford strategic complacency.

I am therefore requesting again:

That the Government commission an urgent, cross‑agency review of New Zealand’s reserve strategy, including:

modelling USD reserve decline scenarios

modelling BRICS commodity settlement systems

assessing NZ’s exposure as a zero‑gold‑reserve nation

evaluating diversification options for resilience

identifying extraction‑economy vulnerabilities

reviewing the gold royalty regime, which currently returns only ~1% of value to New Zealand

New Zealand deserves a reserve strategy based on current global realities, not outdated assumptions.