Budget 2024: ‘Backwards’, ‘Goldilocks’ or a ‘shredder’? Politicians have their say

Thursday, 30 May 2024

The Post’s political reporters and editor are live on the tiles in Parliament following the release of Budget 2024. Watch live as they grill the leaders about the decisions.

The Post will be speaking to political leaders live between 3.15pm and 5pm. In between interviews the live feed above may pause for some time — keep checking back. Meanwhile, the Parliament TV live feed of the House will be available below all afternoon.

National

Finance Minister Nicola Willis spoke to Stuff’s Tova O’Brien, and described her first Budget as a “Goldilocks Budget”, with the Government delivering what it campaigned on.

The Budget targeted more relief at low and middle income families with children, but she said the scenarios varied “dramatically” and she encouraged people to check out the tax calculator to see how the tax changes affected them.

National campaigned on tax relief for “the squeezed middle” , promising that a family with children, on the average income of $120,000, would be up to $250 a fortnight better off including extra childcare assistance, while an average-income child-free household would be up to $100 a fortnight better off.

Willis told O’Brien “we were always clear” when questioned about the $250 a fortnight, “that it was always up to ($250)”.

“We didn't make a promise about how many people would receive that payment,” she said.

'What we know is that around 21,000 families are likely to benefit from the full family boost payment of $150 and we've been advised that around 19,000 households will benefit by more than $200 a fortnight … so it's a small group,' Wilis said.

Willis said the Government was committed to tighter Budgets for the future, and did not agree the tax changes were inflationary. It had been done in a responsible, fiscally neutral way, she said: “We're more friend to the Reserve Bank than foe.”

Funding for schools, hospitals and the police would continue but there would be a culture of “ongoing restraint”, and moving resources from the back office to the front line.

Asked by O’Brien if the lunch at the Budget lockup, which included “woke sushi and chickpeas” was a dig at ACT leader David Seymour, Willis said she had nothing to do with the catering and was on record as saying there was nothing woke about sushi.

Willis later told The Post’s political and business editor Luke Malpass that the Government needed to be 100% confident it could meet the tax changes through reprioritising spending.

She hoped the tax relief was what they expected: “I’ve been very up front that this will be modest”, but over time the bit more in people’s pay packets would add up.

The Government had set a path that would give people confidence it could get the books back in balance but not do so aggressively or dramatically. “We have to grow the economy because all the numbers in our Budget will feel better if we are getting more growth,” Willis said.

Labour

Labour leader Chris Hipkins told The Post’s political and business editor Luke Malpass that this Budget “failed the test”.

The Government had said it would not borrow for tax cuts, but there was $10 billion in tax cuts and $12b of borrowing, “so ultimately they're borrowing and delivering tax cuts, that means they’re borrowing for tax cuts”, Hipkins said.

The timing meant the Government was stimulating the economy, with the fiscal impulse in the Budget positive this year and next, Hipkins said.

He said the rhetoric about the previous government’s “addiction to spending” was not true. The previous Labour government had managed through six years of global pandemic and natural disasters, and had put time limits on some of the spending.

Labour finance spokesperson Barbara Edmonds called it a “backwards Budget” and said the Government had broken its promises about the amount of tax relief that would be delivered. The $2.9b tax break for landlords was money that Labour would have spent elsewhere, she said, and Labour would not have made cuts to areas such as counselling services and law centres.

“We have to hold them to account for every funding choice they’ve made in this Budget,” Edmonds said.

ACT

ACT Party leader David Seymour was up first, and was asked by The Post’s political and business editor Luke Malpass if he was happy from an ACT perspective about how far spending cuts went.

“I've been happy with the way we've gone about it, I could be happier,” he said.

ACT would like to go further than National and NZ First, but “they're different parties and good on them”. The Government had gone further than it would have, had ACT not been part of the coalition, he said.

The Government was focused on growth, and the ingredients for growth were fourfold, Seymour said; cutting compliance, paying less tax, using infrastructure better, and fostering human capital.

Asked if the childcare subsidy was tax relief, Seymour said it was important for closing the gender pay gap and allowed parents to rejoin the workforce faster. “I think it's a tax cut that actually has some extra boost in it.”

Green Party

Party co-leader Chlöe Swarbrick told Malpass that “this Government has committed to trickle down tax cuts and entrenching inequality in this country”. She said the Finance Minister had cherry-picked statements from the OECD and the IMF, which had recently called again for tax reform including changes to corporate income tax and a capital gains tax.

The Government could make decisions to flip the tax system which would match their rhetoric around tax, she said.

Swarbrick said the Government was cutting funding for Predator Free and other initiatives on top of cuts to Niwa and climate scientists, she said, as well as “punching down” in terms of housing and benefits.

“The key point is New Zealanders aren't taking this lying down, there is a lot of frustration and a lot of anger … This [Budget} is so unaspirational, it's a shredder.”

Asked if New Zealanders voted for a shredder, Swarbrick said she had been told be people who had split their vote, that they “didn't expect how anti-enviroment and anti-tiriti and anti-environment and anti-poor people.”

So far today

* Nicola Willis has delivered her Budget speech in Parliament to strong applause. Read her speech in full.

* The Government has confirmed its tax cut plans. Read more about what it means for you here. There is a link to Treasury’s tax calculator too.

* The Post politics and business editor Luke Malpass describes this Budget as one that “does what it says on the tin” but the Government may find it harder to wean off spending than expected. Read his analysis here.

* The Budget was the talk of the house all afternoon (see the livestream below). Greens co-leader Marama Davidson was quick to call it “mean and nasty”. “They have actively undermined our collective ability to support each other and restore Papatūānuku. This is a cynical Budget that mostly serves the short term vision of the few.” She criticised the Government, saying it had “chosen to preserve poverty” and had been “completely unambitious”. See above for Labour leader Chris Hipkins’ take.

* A sea of protesters — estimated to number more than 5000 — marched on Parliament in a nationwide day of action in opposition to the Government’s “anti-Māori” policies.

* Ever wondered what it’s like to be inside the Beehive Banquet Hall on Budget day? Intrepid The Post reporter Kevin Norquay ventured inside and reveals all here.

* The Post National affairs editor Andrea Vance writes that there are few surprises in the Budget but there are a number of alarm bells. Read more here.