Written By:
mickysavage - Date published:
2:43 pm, May 30th, 2024 - 80 comments
Categories: budget 2024, national, nicola willis, same old national, treasury -
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So the budget is now live and the analysis is now starting.
There are tax cuts. There are tax cuts, $15 billion of them. But there is also an increase in borrowing of $12 billion. And it will take a further year to reach surplus.
Can someone reconcile this with Willis’s claim that the budget is fiscally neutral?
Contrary to the previous expectations deliberately crafted by National not everyone is getting a $250 a fortnight tax cut.
1.9 million households will benefit from the overall relief package by an average of $30 a week. Households with children will benefit by $39 a week on average. That does not equate to $250 a fortnight.
A minimum wage worker can expect about $12.50 a week, while superannuitants will take home just $4.50 a week. For beneficiaries generally it is a big nada, nothing, zilch. They are excluded from the in-work tax credit rise, independent earner tax credit boost, and tax cuts.
Landlords will enjoy considerable largesse from the taxpayer and will be able to bank a tax free capital gain AND interest deductibility. And the bright line test is being cut back to a paltry 2 years. Landlords will be rubbing their hands with glee.
To afford these tax cuts the Government will be borrowing more, contrary to previous statements.
They will attempt to claim that the increase in debt is not related to the tax cut but the data would suggest otherwise.
This graph clearly shows what will be happening. Debt will track upwards.
It is the cuts side of things that will cause carnage. The cuts are brutal and random. The claims that the Government has “uncovered a layer cake of government initiatives – many of which we had never heard of before” suggests strongly they have not been doing their job. The information is available for all to see.
My first impression is that what we are witnessing an intense PR job which is at complete odds with National’s election promises from last year.
Comments welcome and obviously more analysis is required. The devil is always in the detail.
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
The server will be getting hardware changes this evening starting at 10pm NZDT.
The site will be off line for some hours.
I think the correct link is: https://www.treasury.govt.nz/publications/budgets/budget-2024!?
I fixed it.
Heh curious, this is repeated word for word on 2 articles by different authors,
"Minimum wage workers don’t lose out on too much, they were orignally due to receive a tax cut of $12.50, that’s been revised down to $10 but when you’re dealing with such small sums, a $2.50 loss is relative." from Tova O'Brien here https://www.stuff.co.nz/politics/350295633/budget-2024-beige-budget & "Minimum wage workers also don’t lose out on too much, they were originally due to receive a tax cut of $12.50, that’s been revised down to $10 but when you’re dealing with such small sums, a $2.50 loss is relative." from Bridie Witton here https://www.stuff.co.nz/politics/350295846/budget-2024-winners-and-losers
Tova also says that it is exactly as National promised & with absolutely no extra borrowing.
The difference between a peanut and half a peanut is only half a peanut, which is really peanuts.
Even half a peanut can have an enormous effect. Anaphylaxis is not a pretty sight.
People living in poverty earning the minimum wage, disabled, beneficiaries, that’s not a pretty sight. But what’s an even less pretty sight is people who are better off kicking down on those less fortunate. Anaphylaxis is treatable, being an a-hole is not.
Heh – "a-hole".
I haven't read anything Tova says for a long time.
I've picked it would $10 for a long time now.
They also got a 25 cents an hour wage increase.
Thus $20 a week in total – if there are two living together on this income – they might together afford their rent increase.
But "next year", there is "no more room for unfunded tax cuts" and National will still not be generous on MW increases.
1990'S old school (market rents in state houses) – tents and or caravans/cars on the front lawn or street (space in garages/carports), this allows two families a building or renting out access to the home cooking and shower for those in cars/vans.
Never trust a politician who uses cancer suffering for votes.
Luxon lied:
Election 2023: National promises to pay for 13 new cancer treatments if elected | Newshub
Yeah – but the Pharmac unfunded fiscal hole was too big to fill!
No it was perfectly easy to fund it through the operating allowance but National wanted to squeeze everything instead.
They promised tax cuts to millions – cancer drug funding only affected as few hundred people. 'The Greatest good for the greatest number'!
… or is it the greatest harm to the least number?
So just a money question Maurice, not a moral dilemma? That makes sense to a
Insensitive clod like Luxon, but some of us believe those kinds of promises should be kept.
It gives a measure of heartlessness. Money for Landlords 2.9 billion. 350 million for 13 new cancer treatments promised by Luxon before the Election.
Oh no.. he's walked back on his word. Wow!!
Now he is trying to blame Labour. What a bloody cruel charade. He gave hope, then casually took it away.
Perhaps I should have put the // sarc tag at the end.
Just using the 'colectivist' mantra of "Greatest good for greatest number" (which has been said to me by both Left ans Right politicians from time to time)
Governments are formed to make hard choices – morality aside. It appears the others had more influence than Dr Reti in the trade offs.
Besides – euthanasia is now available and being extended if suffering becomes too great. //
Nicola Willis
@NicolaWillisMP
#NatCon19 Cancer-Care Policy: “It’s not right that the Government can find $3 billion for the Shane Jones slush fund but it can’t afford life-saving drugs…New Zealanders shouldn’t have to set up Givealittle pages just to stay alive.”
9:35 AM · Jul 28, 2019
https://x.com/NicolaWillisMP/status/1155230203167162368
Tell that to the cancer patients.
"A woman living with tumours on her heart says she is devastated the government has broken its promise."
https://www.rnz.co.nz/news/political/518291/budget-2024-cancer-patient-devastated-that-government-won-t-fund-new-drugs#:~:text=A%20woman%20living%20with%20tumours,hasn't%20been%20possible%22.
"National's promise to pay for 13 new cancer treatments has rung hollow after Budget 2024 revealed the drugs would not be funded, leaving patients and advocacy groups distraught."
It was supposed to be funded by reinstating the $5 prescription payment.
https://www.1news.co.nz/2024/05/31/despicable-government-wont-fund-promised-cancer-treatments/
Prescription co-payments will return from July 15, Finance Minister Nicola Willis told media gathered at Parliament.
So the money is not yet available – perhaps why it will take time to be available for purchase of cancer drugs?
Did the government lack the ability to borrow some money from the Shane Jones fund and fund the treatments now and use the prescription money to pay it back?
Most people running a household budget (using multiple accounts) can do this.
The cancer drugs are extremely expensive and may just be too much on a per patient basis. They do not seem to be curative but rather palliative.
Scuttlebutt is that Pharmac may be playing hardball with the suppliers and trying to get prices reduced significantly before introducing them to the system.
I do not believe that the decision to not fund them at this time was taken lightly. Hard choices had to be made to simply keep existing medications available. Those who believe that it is Coalition cruelty rather than excruciatingly hard choices need a look at themselves.
Did your mate Paula Bennett tell you that or are you just making up assumptions? Luxon and Willis gave an ironclad promise and they broke it. IMO you're being flippant and insensitive, but I bet that attitude would soon change if the shoe were on the other foot.
Paula is my trusted advisor – rang me at 2am and promised a $100 KFC voucher if I printed that ….
Don't be silly!
Your post was silly Maurice. It looks like a nerve was struck.
wtf?! You are pulling something if you believe that. Just don't expect anyone else to.
Word for word the excuses Willis used this AM.
Is Willis' office paying you?
National knew what those 13 cancer treatments would cost ($70 million per year) and made the promise. They also knew how they were going to pay for them. It’s all detailed in National’s Policy document in which they outlined their promises: https://assets.nationbuilder.com/nationalparty/pages/18159/attachments/original/1692580225/Helping_more_Kiwis_fight_cancer.pdf?1692580225
You’ve got no idea what you’re talking about. The list of 13 cancer treatments to be funded is in the same linked document – it’s only 3 pages long, so you can’t miss it – with the indications for use.
Please stop your ignorant shilling.
Incognito.
"Ignorant shilling"
Recently involved with cancer treatment and provision of cancer drugs.
Do you think this is not going to happen here?
https://www.zerohedge.com/political/i-was-offered-assisted-dying-over-cancer-treatment-broken-canadian-healthcare-system
This parallels my experience here – and there is talk of extending 'euthanasia' legislation locally.
Quite likely some very delicate negotiations between Pharmac and drug companies involved have been derailed by 1) the Government 'promise' 2) the politically motivated shrieking.
The BIG question not asked: Why – if the 13 drugs are so needed and necessary were they not funded by the previous administration?
I make no apologies for my cynicism and "shilling" as they come from extremely bitter experience and loss of loved ones.
Lame excuse. Landlords, no doubt several are millionaires like Luxon, got a 3b tax break they didn't need.
54 Properties !
And a certain….. Dilworth "Trust"….
$ Billion !
Thanks for that!
ACT wanted more help to landlords more quickly – the money had to come from somewhere.
https://www.rnz.co.nz/news/political/503476/landlord-tax-breaks-will-blow-out-by-1b-ctu
Remember like most things being a shyster and a huckster and damaging a society is not a crime in most cases. (What’s going on with that opioid epidemic? Did they catch those OxyContin bandits?)
What’s illegal, especially in places less free is telling people about it…
The reality is: health cut in real terms, education, defence and police also cut.
https://x.com/SEaqub/status/1796009483560189959
Anyone not getting this is open class war at this point, is an idiot.
We did not get fiscally neutral tax cuts from the incoming 2008 government either (and that was with a 2.5% increase in GST not declared in the election campaign).
They had form and so no expert believed Willis’s pre-election reckons.
all the talk from Luxon and Willis before the election about their costings, pretty much laid bare now as being lies. Even the guy who wrote half of ACT & Nationals policies, Hooten, states as much.
This is the obvious weakness/line of attack in this uninspiring budget:
"the Coalition of Cuts is borrowing to give tax cuts."
Madness. Bring back Grant.
Tell me I just nodded off and dreamed it.
Just heard on News TV1 that the govt has budgeted for a tug boat big enough to rescue ferries.
No plan to replace the ferries themselves.
Got to be a dream . .
There is health and safety concern as to the continued operation of the existing ferries – there is no rail freight alternative on the horizon … No 8 fencing wire (like having option on leasing a plane for a week if the aging PM's jet is unfit to fly).
The budget 2024 anthem……
Right at the end asked for a score out of 10, last one was O'Reilly who gave it 7/10 – 'a budget for the battlers'
Letele shot back 'do you know any battlers'
https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018940669/political-panel-debate-budget-2024
Pretty sad that Labour's opposition finance person didn't generate a memorable line over the whole day, and nor did the Greens.
Good on TPM for helping organise marches in opposition.
Beneficiaries getting so little in the tax cut is cruel to the poor.
Memorable line's have a tendency to embellish……the budget is a cruel script that should be duly noted but unceremoniously dumped in the round filing cabinet……
Without looking it up, who is the Labour finance person?
This was the day they'd been practising for their entire political life.
Hate to agree with you too much, but I think you’re spot on. They had a lot of time to get ready for what was coming.
However, a consistent line a day or two after that is agreed upon by all is probably fine.
I fear the main directive is don’t upstage the boss.
Barbara Edmonds.
I don't know ! I saw Swarbrick at one point selling a wealth tax , and I'm thinking why not , fuck it it can't make things worse than the slow circling of the bowl we living .
I'd rather have a wealth plan than a wealth tax.
ie one in which the government has a plan to massively increase the number of people earning over $100k, so they can save towards their own home.
Budgets used to be about the place of the public accounts within the entire economy. That's what they should be.
There was no economic plan in the budget.
They cut science (CRI) funding. No R and D, they are making it hard for university to attract and keep grad students, no industry plans, no venture capital formulation, no cheaper finance for business development.
Nothing on the strait, nothing on coastal shipping.
Grifters.
+100 Back in the day under Anderton we used to have innovation engines.
This budget will go down badly amongst those who were expecting tax [sic]"relief".
They would've been better off saying that conditions weren't right now because of the previous govt (not true but they have got this far with that lie), and that tax cuts will have to wait until 1 October 2025.
That campaign promise of Nicola's to resign really busted any chance National could've delayed the meagre tax cuts, which as one commentator put it, is pretty much "all hat and no rabbit" and actually laid the ground for more meaningful “relief” closer to the next election.
I also note that many of the intended beneficiaries of the targeted portion (i.e. working families with young children that have young children in paid care) are now almost certainly having to face increased costs at their childcare provider, whom coincindentally happen to have a brainwave that now is a good time to increase their rates ;))
TVNZ reckons it is about $50 a week for the average income household.
Stats which would suggest, one income households lower on average and sole parents with children also.
The thing about the boast of the size (when including a tax rebate of up to $75 a week max on child care for 2 to 3 year olds) it would not have been been counted as a tax cut under Labour – funding directly to the provider.
I hope someone is keeping an eye on the cost of ECE. With parents getting more money with that ECE tax break, ECE providers can increase the prices because they know the parents have the money. It's one of the most stupidist sink holes for government money ever – private providers are going to take every cent and parents will end up being no better off.
What's the bet that in two years time, ECE prices will have risen to exactly the amount of the tax break for parents.
dis I see they are going to pay 22m per year to train 25 more dr per year?
Interesting. Labour funded 50 news places in the 2023 budget and National promised 50 more places in this budget. I guess giving tax breaks for landlords was more important than providing health care.
Superannuitants get to take home $2.15 a week, not $4.50.
It really irks me that people like Brad Olsen are trotted out as experts when they are just neoliberal talking heads repeating CoC lies. How can people be expected to understand what is happening when he spouts crap like this about what to expect in future budgets in an RNZ article tonight:
"Anything new will have to be met with a cut in other areas. The government has enough money each year to keep the lights on but not a lot more than that."
It's government priorities that mean things are tight for them Brad. Tax breaks for landlords and tax cuts they are funding with borrowing are the problem. The government is sewing up it's own financial straitjacket around itself but Brad chooses to ignore this.
We are not served well by the media landscape here.
Along the lines of Brad Olsen's reckons, I had the misfortune to hear on RNZ, Mary Holm's disconnected utterances in regards tax cuts. Pop them into Kiwisaver.
In relation to the removal of the first home buyers grant, she opined that maybe, get used to the idea of renting for life. That way you can save money for your retirement. So out of touch with reality, she went on to compare renting in Germany and Belgium with Aotearoa, and reckoned you just get a long term lease. Then you can decorate how you like and plant gardens…
From about half way through. A word of warning it may make yr blood boil.
https://www.rnz.co.nz/national/programmes/afternoons/audio/2018940651/your-money-with-mary-holm
“the Coalition of Cuts is borrowing to give tax cuts.”
Do correct that spelling mistake.
It doesn’t cover the rise in costs and the cuts in services.
It’s a budget that doesn’t cover its own arse. $10 or $70 or whatever.
Rents and rates are up. Local council borrowing cost will be up in the future. Prescription charges are up. Cost of living is up at the supermarket. At the petrol pump. Public transport is being scaled back and delayed. We are likely to see tolls on some roads. Welfare will go up as employment decreases.
It ignores the known climate change bill and the unknown one.
It gives us insecurity.
We have no idea if the government will help us if there is a disaster or if they’ll sell us out to the insurance industry. Or worse as the insurance industry wants less and less exposure to the increased risks in many places they’ll just abandon us as they’ve abandoned smokers. As they’ve abandoned prisoners, gang members and responsibility given how many gang members have grown up in state care. These are members of our society.
We have no idea if the police, education or health will keep pace with our needs or if their salaries will allow them to lead a basic happy middle class existence in a NZ city. They’ve attacked the police who can’t collectively bargain the same as most industries, attacked protest as illegal because you should be at work, and decreased benefits and the minimum wage in real terms. They’re attacking the job of teaching. They’ve failed the journalism profession and the RW sharks smell blood.
We don’t know if they’ll shell out enormous funds to join this AUKUS defense group, or if they’ll turn on the defense force personnel next, as they too agree to give up their right to ordinary collective bargaining.
Like all their work this budget is an attempt to say we kinda met our election promises. But underneath is the evidence- money to their chums, forgotten or hidden donations and meetings with those winning big and avoiding the checks and balances democracies impose on capital. Particularly tourism reliant economies.
And don’t forget they’re all landlords in parliament, by and large, voting themselves tax free capital gains in their property.
The sugar hit has gone, be an it never really was and with the glee of the razor gang there was no honeymoon for this cynical bunch.
Can the opposition reform and drive them into one term obscurity?
What happened to the "cost of living" budget?
Higher prescriptions, higher rates, health system failing, more expensive power and food.
Any 'tax relief' is totally soaked up by higher cost of living.
Winston's retiree constituents get shafted. But at least they keep their precious capital gains (which were never in danger anyway).
I wish they wouldn't say $5 per prescription because it's $5 per prescription item. If your doctor prescribes 4 medicines then that it is a $20 hit.
People won't see their GP if all that is going to happen is they will get prescribed medicines they can't afford. The $100 threshold for free medicine isn't that helpful if you can't afford to get to the threshold.
If you can't afford the prescriptions, then you almost certainly can't afford to go to the GP. Prices there are a lot higher.
From a conversation with our local chemist (who's in competition with the big chains – who already offered free prescriptions) – the majority of the prescriptions which are not picked up at our local pharmacy, are not the standard antibiotics, etc. (at $5 a pop) but the unfunded ones which can be $60 or more each.
Prices for GPs are incredibly variable. If you attend a VCLA practice then the fee is around $19 (IIRC) so getting 4 medicines costs more.
And if you get your prescriptions from Chemist Warehouse (or any of the other budget operations), there has been no prescription charge for many years (and this will presumably continue).
It doesn't makes sense to claim that families have the option to shop around for cheaper GPs, but not for cheaper prescriptions.
You can't shop around for cheaper/free prescriptions when you don't have one of those bargin pharmacies locally. Or even cross town to get to one when the cost of petrol or bus fares (assuming busses exist) has to be weighed up against the prescription charge.
Just accept there is NO choice for many.
The same argument presumably holds for GPs. And, actually is even worse, as mpledger points out – there is very limited scope to choose your GP; whereas there are a lot more chemists available.
Again, if you have NO choice – then you're unlikely to even go to the GP (because of cost) – so the cost of prescriptions is not even relevant.
People actually don't have much option to shop around for GPs. Outside of Auckland, it's actually tough going to swap general practices. The general practice my family attends recently opened their books but only those living in nearby suburbs can enrol.
And shopping around means being willing/able to travel to the pharmacy/general practice. It's costs money (and time) to save money. That’s why being poor is expensive.
However, you were claiming that people could access a 'cheap' GP but not access a 'cheap' pharmacy. There are a heck of a lot more of the latter than there are of the former.
It's not an either / or expense, it's the GP charge and the prescription on top of that. That get to be an impost on most personal budgets.
Down here it's $67 to see your GP, that's enrolled, so put 4 items on the script and you're over $100. That more than discretionary for most people I know.
For mine,
Labour should index the top of the second tier to the MW level (with the third tier rate above the MW). And have the IETC across the third tier.
It should consider adjustment to tax bands at the higher rates to afford the cost of this.Thus indicate a focus on affordable change to help the many.
Big Hairy news and Craig Rennie discuss the budget. Craig points out that tax cuts to poorer people does not cover the losses due to inflation, and to reduction, below inflation in minimum wage increase by National. Going backwards for the poor.
The Greens want a max or cap on rent increases.
An alternative is a rent freeze and or rent controls – as per market comparison.
They should have taken the $15B tax cuts and divided it evenly amongst the $5M population.
We all go to the supermarket and pay the same for a sack of spuds.
There is nothing to 'give' – the Government is TAKING less from tax payers only … not everybody.
One thing Willis has done by borrwing $15 billion for her tax cuts is smooth the way for a Capital Gains tax. The Cullen working party a few years back suggested one thing the proceeds of a cgt could be used for is lowering tax rates. Willis has borrowed to do that now so when a cgt comes in 3-4 years time the govt can point back to now to the tax switch, no need to do it. Sadly she has decimated the governments finances to do it but this post isn't about her lack of financial competency.
Here are a few snippets from Craig Renney, for the full thread https://x.com/CLRenney
"Nicola Willis said that her tax package would not “require any additional borrowing”. Treasury says the government will now borrow an extra $17.1bn by 2028. Tax cuts cost nearly $10bn. Without cuts, borrowing would be lower. Future taxpayers are going to pay for tax cuts today"
"That might be okay if tax cuts were going to those with the highest needs. A couple on Superannuation ($4.30 a week) will get around a tenth of the tax cut being promised to a couple earning $300,000 ($40.09 a week). Only tiny numbers of people will get the full $250 a fortnight"
"Meanwhile, 47,000 more people will be unemployed since this government took office. That's an increase of 39% in unemployment since Q3 2023. Yet there is nothing in the budget to support people back into work or training."
"The Budget also fails the test of not cutting the front-line. Real terms cuts are made to operating grants to education. Customs sees only cuts, The same is true for Agriculture, Biosecurity, Fisheries, and Food Safety. It is cutting 240 lines of expenditure in total."
"It would be easy to blame this Budget on malice – to frame the Government as being simply indifferent. That would be the wrong. Rather, what this Budget demonstrates is that the current Government places its political survival over the very real investment needs of the country."
William Brown @harbottlesmythe
The CTU have summarised the shortfall, the real cost behind the landlord freebies $3.83 billion
https://x.com/harbottlesmythe/status/1796664716397584742