Andrew Little calls it the ‘The One Dollar Bill Budget’, a $1 tax cut for cleaner on minimum wage. As usual it is the already well off who do the best out of National’s election year tax cut bribe.
Scoop has the best roundup of budget links and articles. A sample of some analysis and reaction…
Tracy Watkins: Tax threshold move an election bribe eight years in the making
Steven Joyce has delivered an election year Budget that puts money in everyone’s hip pocket with a big hint of more to come.
You can call it a lolly scramble or you can call it an election year bribe but with bumper surpluses projected and debt well below the norm in the western world this is the Budget National scrimped for over the last eight years.
Joyce delivered the Budget wearing his hat as finance minister but it showed the cunning of someone who wears another hat as campaign manager. …
Patrick Gower: Budget 2017 ‘The Cash Bribe Budget’
Steven Joyce has rained down cash on almost everybody.
But there is a catch: it doesn’t kick in until April next year – meaning you have to vote National come September 23.
It is a straight-out cash bribe.
It is a lolly scramble using the ultimate lolly – cash.
It is the ultimate election year Budget.
Brian Fallow: The better than nothing Budget
It is the better than nothing Budget. Steven Joyce has hardly thrown fiscal caution to the winds.
It would have been intolerable for the Government to crow about how well the economy is doing and project ever fatter surpluses and falling debt to GDP ratios while doing nothing about the pressure on the finances of lower and middle-income families.
Both the increases to the income tax thresholds and the changes to Working for Families tax credits are overdue.
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These changes cannot take place until after the general election, so there is an element of political incentive to them It remains to be seen how Labour and the Greens will respond.The broader context is that household finances are under pressure.
The dire state of the housing market in many parts of the country has pushed household debt, relative to incomes, to a very high level by historic standards.
The cost of servicing that debt is rising too. Mortgage rates have been rising for a year and are liable to continue to do so as global interest rates begin to normalise, given how much of the money the banks lend here has to be imported.
Meanwhile we have seen the bottom of the inflation cycle, the most recent read for the annual rate being 2.2 per cent.
And income growth is sluggish.
In the year ended last March average weekly earnings for wage and salary earners did not increase at all, when adjusted for inflation over the same period.
In these circumstances for the Budget to have entrenched yet another year of fiscal drag and continued the squeeze on Working for Families would have been a hard sell.
Because we are a stage in the economic cycle – more a hump if than a peak — where it is about as good as it gets.
Roll up, roll up: Budget delivers cash for workers
Workers are the winners in the Government’s election year Budget which delivers more cash in the hand to almost everyone – including $2 billion worth of tax cuts and boosts to Working for Families.
The centrepiece of the Budget was the Family Incomes Package’ which included a mix of tax cuts, and increases for many on Working for Families and the Accommodation Supplement – a package which will cost $6.5 billion over the next four years.
Finance Minister Steven Joyce said it was expected to benefit about 1.3 million families by an average of $26 a week as well as 750,000 superannuants and 41,000 students.
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However, it is not all good news.Some families on middle incomes will get less – or no longer be eligible for Working for Families payments – because the Government has dropped the income threshold at which the credits start to abate from $36,350 to $35,000 – and increased the rate at which the entitlements abate from 22.5 cents in the dollar to 25 cents in the dollar.
The Government had initially intended to phase those changes in over time until 2025 to give families time to adjust.
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However, critics are likely to be unimpressed.Labour has claimed the Working for Families payments were due to increase anyway – they are indexed to increase every time the CPI increases by five per cent and the last adjustment was in 2007. Since then the CPI has increased by 5.5 per cent.
The decision to bring forward changes to abatement rates and thresholds will mean many will also miss out.
The Accommodation Supplement was also overdue for an increase – it has not been adjusted since 2007 when it was set to reflect rents at the end of 2005.
See Grant Roberston’s: If this was my Budget: Grant Robertson
My Budget would be a plan to give every New Zealander a fair share in prosperity because right now, although the high-level indicators in the economy look good and some people are doing very well, after nine years of a National Government too many people are missing out.
It would start with getting the basics right: Housing, health and education – the building blocks of security and opportunity.
Labour’s plan for housing is that a secure, warm, dry place to live is the heart of strong communities and neighbourhoods.
Our Budget would launch KiwiBuild. This would build homes for first-home buyers to be sold at cost, and that money would then be reinvested to build the thousands more homes we need.
And the Budget would put the money in to make sure we start to end homelessness. You cannot raise a family in a car. Labour would not stand by and say that was okay.
Labour’s Budget would also address the tax loopholes that make housing a playground for speculators – no more using losses on your property portfolio to mean you don’t pay your fair share of income tax; no more overseas buyers making a quick buck on our housing.
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