The breakdown of the ‘Beige Budget’

Friday, 31 May 2024

Analysis: Just hours ago The Post journalists were released from the 2024 Budget lock up. We've scoured the hundreds of pages of documents to pull together what the Budget means for you. Here's a wrap of our coverage from the National-led coalition Government's first Budget.

The ‘no surprises’, or the ‘beige Budget’ as it has been nicknamed by Stuff's chief political correspondent Tova O’Brien, laid out tax cuts, public service cost savings and the changes the Government has made that will affect New Zealanders.

Inside the Beehive Budget lock up, journalists, analysts, lobbyists and officials pored over the hundreds of documents. Looking through the Beehive windows, protesters covered Parliament’s lawn.

Roads near Parliament closed as thousands of protesters taking part in the nationwide Toitū Te Tiriti activation massed at Parliament. One protester said, “I feel it is important to support the kaupapa and see our people stand up and rise against what I call tyranny in New Zealand politics”.

The Government is rolling out its adjustment to tax thresholds at roughly the level National promised in the election. That means the tax workers pay on their income above $14,000 and below $78,100 will change.

I broke down the tax changes and what New Zealanders can expect to get from July 31.

The tax thresholds will rise to $15,600 (previously $14,000), $53,500 (previously $48,000) and $78,100 (previously $70,000) a year. The top tax threshold will stay at $180,001.

The Post political editor Luke Malpass’ says in his piece Tax cuts, $12 billion in extra borrowing, and no surprises it is a “modest Budget document that hits all of the areas that the Government indicated that it would”.

Malpass analyses the ins and outs of the Budget, saying it “created few losers, a lot of very modest winners and what cuts there are have been are not front-facing”.

“The immediate political test will be whether the public deems the July 31 tax cuts sufficient for the temper of the times,“ he writes.

“Willis promised that hers would not be an austerity budget and it certainly is not. Spending will continue to rise — almost $11 billion in the next year alone — there will be some tax relief, some handouts, more money for infrastructure and some budgetary nipping and tucking across the board.”

National Affairs editor Andrea Vance called it, “all hat, no rabbit, and a distinct lack of magic”.

“For households already stretched thin, the relief will be eroded by other budget measures such as the removal of free prescriptions, a bin tax increase (up from $20 to $25 a year), and no relief (yet) from interest rates or inflation.

“There is no extra help for the jobless, who are expected to grow in numbers until next year (up 5.2 percent, an extra 27,000 beneficiaries).

“To offer genuine benefit (by getting inflation and mortgages down), Willis badly needs the economy to recover. But it continues to under-perform,” writes Vance.

For a deep dive into the numbers, Tom Pullar-Strecker rips into the books, looking at how the Government expects to need to borrow an extra $12 billion over the next four years, over and above its previous borrowing plans.

“And has delayed its projected return to surplus by a year to June 2028 as a result of the economy hitting a pot hole.”

An interesting development on prescription changes (the removal of the $5 fee centrepiece of last year’s Labour Budget), is that from July 15, the $5 prescription fee will be back, unless you are under 14 (this was a surprise), a community service card holder or Super Gold Card holder. Rachel Thomas, senior health reporter, dives into this story here.

For a hilarious overview of what the hours within the Budget lock up is like, Kevin Norquay’s piece ‘No such thing as a free lunch, but Budget day comes close’ describes it as “baffling and boring, until I was singled out as a security risk”, and is well worth a read.

“Lunch is announced. Quietly fearing it will be the crisps, muesli bar, baked bean government proposal for school lunches, it turns out not to be, but suspiciously woke — there are vegan, vegetarian and gluten free options, and sushi. Surely this is not Government policy?”

Bonus — want to know what goes into a Budget? I spoke to political staffers of Budget-past about the late nights, the back and forth with Treasury, the cramming and the privilege being involved in a Budget holds.

Political commentator David Farrar was a staffer for the National Party between 1996 and 1999. Farrar recalled working for former Finance Minister Bill Birch and being in the Beehive “at 10, 11 at night, early hours of the morning”.

In the photo above, journalists sit where journalists sat today, 25 years later (with lofty computer screens traded for laptops).

Below is one of the many images our very talented photo journalist Robert Kitchin took in the Budget. A different sight from 1999, but as with every Budget, one that ripples through the country.