The Mini Budget Today

70 comments on “The Mini Budget Today ”

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1. dv 1

   20 December 2023 at 11:24 am

   Interesting that Luxon has bugged off to Australia.
   • mary_a 1.1

     20 December 2023 at 1:56 pm

     dv (1) … Slippery Luxon thinks he will escape being questioned about the mini budget. But he will face some questioning on returning. Well I hope he does!

     [Please fix typo in email address – Incognito]
     • Incognito 1.1.1

       20 December 2023 at 2:46 pm

       Mod note
   • Ghostwhowalks 1.2

     20 December 2023 at 2:00 pm

     was also there last week or so as well. Daughters Graduation or something

     I notice he isnt able to fly solo in formal press conferences so often has Bishop doing the details. Dont think is usual as well -outside Covid so it seems hes not getting the detailed briefings before press conference but leaving them for others to sweat the details.
   • Sanctuary 1.3

     20 December 2023 at 2:22 pm

     So far Luxon has utterly failed to reign in the far right and conspiracy agendas of ACT and NZ First. He seems incredibly weak politically, allowing his government to be highjacked by the most extremist agenda since Richardson. To quote Pablo over at kiwipolitico, Luxon is the bell-end on an onanist policy-making caucus.

     NZers are generally a peaceful bunch, but we have our limits and this government is so crass, stupid, myopic and beholden to crony donors it is distinct possibility these morons will push people to violence.
     • Bearded Git 1.3.1

       20 December 2023 at 7:24 pm

       +100 Sanc
     • CR 1.3.2

       20 December 2023 at 7:42 pm

       why are you resorting to insults? And bombast? In your criticism? With no substance. Then leap to saying New Zealanders will revert to violence? No we won’t. You do the left no favours with the stupidity of your commentary
       • Sanctuary 1.3.2.1

         20 December 2023 at 9:39 pm

         "A riot is the language of the unheard" – Martin Luther King Jr.
2. lprent 2

   20 December 2023 at 12:57 pm

   Parliament TV https://ondemand.parliament.nz/
3. Macro 3

   20 December 2023 at 1:06 pm

   But but but…. I wanna see "Wonka" and get an ice cream.
4. Kay 4

   20 December 2023 at 1:15 pm

   As expected, 1/2 price public transport for community service card holders gone in order to pay for the tax cut of people who can already afford full fares, if they even use PT in the first place.

   But that's OK, since indexing benefit increases back to inflation rather than wage growth gives us more than enough to pay full fare /s
5. Ad 5

   20 December 2023 at 1:19 pm

   Relevant releases from Minister of Finance so far:

   https://www.beehive.govt.nz/release/economic-repair-job-begins

   https://www.beehive.govt.nz/release/first-steps-tax-and-income-relief-announced

   https://www.beehive.govt.nz/release/strengthening-fiscal-responsibility-rules

   "List of 21 fiscal cliffs disclosed to the Finance Minister by the Treasury:

   Ka Ora, Ka Ako | Healthy School Lunches Programme

   Pharmac – Combined Pharmaceutical Budget

   Pharmac – COVID-19 therapeutics and vaccinations

   International Climate Financing Funding

   Tertiary Tuition and Training Funding Baseline Pressure

   New Zealand Screen Production Rebate (International)

   New Zealand Screen Production Rebate (Domestic)

   Cyber Security Programmes

   Kāinga Ora Operating Funding

   Apprenticeship Boost

   Geohazards Science Services, Data and Modelling

   Kānoa Operating Funding

   Oranga Tamariki Disability Support Services

   Teacher Supply Initiatives

   North Island Weather Events Road Response and Recovery

   Transitional Housing Motels

   Civil Aviation Authority Liquidity Funding

   Equitable Digital Access

   Temporary Accommodation Services

   Historic Claims of Abuse in Care

   Te Matatini – Funding to Stimulate the Sustainable Growth of Kapa Haka

   “Our coalition Government has acted swiftly to remove some of these unfunded fiscal risks: including by stopping the Lake Onslow Project, the Income Insurance Scheme, and the commitments to Auckland Light Rail and Let’s Get Wellington Moving.

   “Other time-bombs will take more time to defuse.

   “Cost blow-outs in major infrastructure projects abound. The iReX Interislander ferry project is just one example. I have also been advised that the Transport Investment Programme that the previous Government signalled a commitment to deliver had an estimated total cost of $288 billion, while only $85 billion of funding had actually been appropriated to meet these costs."

   “Our decisions ensure that $2.047 billion of forecast cash proceeds from the Emissions Trading Scheme can be used as a ‘climate dividend’ to support income tax reduction, including by closing the Government Investment in Decarbonising Industry Fund (GIDI), which has been subsidising already profitable businesses to reduce emissions."
   • Ghostwhowalks 5.1

     20 December 2023 at 2:08 pm

     "closing the Government Investment in Decarbonising Industry Fund (GIDI), which has been subsidising already profitable businesses to reduce emissions."

     So does that also apply to farmers who had had their climate costs paid by taxpayer over last 20 years – as decided in Kyoto Treaty. Labour had recently proposed moving those costs back onto farmers…the Groundswell started and national supported them keeping that cost on the taxpayers.

     The whole rationale that I could see for Decarbonsing Industry fund was that their climate costs were funded by taxpayers under long standing arrangements, decarbonising meant they saved taxpayers money over time. NZ Steel comes to mind and probably was a major reason why Marsden Pt refinery was let go without an intervention.
   • Nic the NZer 5.2

     20 December 2023 at 3:12 pm

     I recon 100% of their fiscal cliffs are smaller than the average error on their budget deficit forecast.
     • Ghostwhowalks 5.2.1

       21 December 2023 at 7:04 am

       Newsroom caught out Willis big lie

       "To the contrary, most if not all of the 21 time-limited funding lines Willis produced were publicly released as part of the Budget in May, as Robertson insisted. Certainly some of the biggest ticket items like Pharmac and school lunches were disclosed and even incorporated into National’s fiscal plan ahead of the election."

       And second lie
       “her original allegations, which suggested Robertson used “clever workarounds” to hide the cliffs from public view.”

       https://newsroom.co.nz/2023/12/20/no-smoking-gun-for-willis-but-struggling-economy-will-do/
       • Nic the NZer 5.2.1.1

         21 December 2023 at 7:50 am

         No doubt. This does demonstrate a measure of competence from Willis as she has managed to get treasury involved in her political program this time.

         The point I was making overall is that treasury has missed the next major economic shift anyway (be that something like a global recession or a pandemic) in their forecast. When that shows up all these things they did mention appear in the cents column while that event invalidates most of the forecast outright itself. The impact on our economic competence is like SBF sweating FTX social club budget in an attempt to remain solvent.

         Are we actually recording "school lunches" down as big ticket items now?
       • Nic the NZer 5.2.1.2

         21 December 2023 at 8:08 am

         Ghost's link also highlights what I said directly.

         In September there was a 2.1 billion surplus forecast and just two months later this has shrunk to $140 million. More than the sum total of Willis supposed fiscal cliffs ($1.36 billion) disappeared right there as routine forecast error with zero impact from new National policy influencing that shift.

         I don't blame treasury for being off by this amount, its largely irrelevant anyway. But the country is hyper focused on pinching at the budget pennies as if the treasury forecast is in some way accurate to the nearest billion. Its mostly accurate to the nearest 10 billion.
   • bwaghorn 5.3

     20 December 2023 at 3:29 pm

     “Other time-bombs will take more time to defuse.

     Who's writing her scripts , Tom Clancy??
     • Bearded Git 5.3.1

       20 December 2023 at 7:29 pm

       
     • Obtrectator 5.3.2

       21 December 2023 at 10:48 am

       At least – for once – they're not being "diffused".
   • Incognito 5.4

     20 December 2023 at 3:40 pm

     Our decisions ensure that $2.047 billion of forecast cash proceeds from the Emissions Trading Scheme can be used as a ‘climate dividend’ to support income tax reduction […]

     So, money for those tax cuts does grow on trees …
     • bwaghorn 5.4.1

       20 December 2023 at 5:31 pm

       Emissions Trading Scheme

       I've always thought it was a scam and a farce,
       • Descendant Of Smith 5.4.1.1

         20 December 2023 at 6:11 pm

         I'm with you on that. Designed by capitalists for capitalists.

         Regulation is always a better option though places like MBIE are shit at enforcing anything eg overseas worker schemes, RSE schemes, student visa schemes, etc
6. Mike the Lefty 6

   20 December 2023 at 1:39 pm

   More like a micro budget than a mini budget, by the sounds of it.
7. Ffloyd 7

   20 December 2023 at 2:03 pm

   I had to look out our kitchen window to see if we still had a beautiful green country, and not one that had been razed to the ground. Bloody Norah. She’s completely gone round the twist. Help us Labour! I think she’s too fanatical to be trusted. I read her daddy is a coal and oil man. Could that have an influence on her. Reti isn’t much better imo.Weasel words and all blaming Labour and the mythical Six Years of doing nothing. These people have no intestinal fortitude. Spouting garbage without a point proving their validity in spitting distance. Is anyone starting a groundswell organisation for ’Bottom Feeders Inc’. I’ll print the t shirts. And march in the protests.
   • Thinker 7.1

     20 December 2023 at 5:22 pm

     I suppose when you push for Trickle Down Economics, it's only natural that the poor are forced to become Bottom Feeders.
   • Anne 7.2

     20 December 2023 at 9:07 pm

     "Bottom Feeders".

     The Opposition parties have a perfect opportunity to ram that nasty expression back down Luxon's throat. It's as plain as daylight who the bottom feeders actually are – himself, his ministers, the rich pricks who financed him into govt., and the mega landlords. As a mega landlord himself, he stands to make a nice package does he not?
8. Sanctuary 8

   20 December 2023 at 2:15 pm

   We are staring at an economic catastrophe of the scale of Cameron's austerity under this government. It is utterly maddening to me how our navel gazing, parochial, rather stupid, bored and listless MSM couldn't be bothered to investigate the dealings of Luxon and the NZ political right with Tory strategists and policy shops prior to the election. Luxon clearly sees the UK Tories as a model, right down to his settler cultural cringe that seeks to ape the disaster of the totally ideological misery of Cameronian austerity.

   Skilled New Zealanders are flooding out of the country due to the massive wage gap that has opened up with Australia over the last 40 years, yet this government is determined to not just tank to economy with austerity but drive wages and conditions down even further. At the same time we are being swamped with (relative to who we are losing) low quality migrants for whom no provision is being made whatsoever. GDP per capita is falling, with no sign that anyone sees our relentless march to third world levels of GDP per capita and related productivity as anything other than an opportunity for the rentier elite to make out like some Anglo-Irish absentee landlord enjoying exceptional rents regardless of the state of the potato harvest.

   Yet at the same time the economic incoherence of this government means they've instructed the reserve bank to focus only on inflation – yet the housing shortage is causing a surge in house prices as speculators enter the market, which means even as we go into a recession, the RBNZ will hike interest rates to suppress inflation – and you can bet you bottom dollar Willis will respond to a weak tax take by slashing spending further.

   These arrogant fucking right wing idiots never learn.
   • roblogic 8.1

     20 December 2023 at 3:48 pm

     50/50 chance I'm off to Brisbane next year. Spent a few months in Melbourne this year, it's not as pretty as Auckland, but Oz is a land of opportunity compared to our little islands of rigged capitalism
     • Pat 8.1.1

       20 December 2023 at 4:01 pm

       The 90s revisited…i recall every second person you spoke to was off to Oz back then
   • Bearded Git 8.2

     20 December 2023 at 7:34 pm

     +1000 Sanc
   • Tiger Mountain 8.3

     21 December 2023 at 11:37 am

     Yes, Dracula’s Daughter certainly seems to be relishing the chance to put the boot in to the bottom 50%.

     “Get up, stand up…” is the only reasonable response.
9. roblogic 9

   20 December 2023 at 3:32 pm

   Instead of doing political analysis of today's mini budget, the Herald's brain trust have chosen to do another hatchet job on Jacinda Ardern.

   A lamentable dereliction of duty but typical of the Herald. They won't write a single word against a right-wing government unless it does something egregiously undeniable.
10. ianmac 10

    20 December 2023 at 4:41 pm

    OOps. copy lost its alignment. Someone fix?

    Surely National didn't leave 155 fiscal cliffs behind in 2017 – did they?

    A selection of "Fiscal Cliffs" left by National in Budget 2017 by Thomas Coughlin

    Table with 3 columns and 12 rows.

    2017/18 Budget $'000
    2018/19 Estimated $'000
    

    R9 Accelerator – Making it Easier for Business to deal with Government

    New Zealand Business Number

    Multinational Corporation R&D Attraction Programme

    Te Mana o Te Wai fund

    Underwater Intelligence, Surveillance and Reconnaissance Capability

    Deployments to the Middle East and South Sudan

    Deployment of an Inshore Patrol Vessel to Fiji

    Antartcitca New Zealand – preparation for the future redevelopment of Scott Base

    Funding for a contribution to Kaikoura District Council to restore the three waters network

    Targeted Short-term Investmetns to Reduce Imediate Prison capacity Pressures

    Justice Sector Fund – interventions to reduce family violence and sexual violence

    Government Inquiry into Havelock North Drinking Water: Extension to Reporting Date

    2,850	2,850
    3,200	3,200
    2,000	2,000
    1,000
    12,844	5,831
    18,205	29
    1,088
    1,200	1,200
    	1,800
    4,000	0
    1,785
    1,220
    • weka 10.1

      20 December 2023 at 7:28 pm

      OOps. copy lost its alignment. Someone fix?

      As opposed to dumping the whole comment because it has no link?
11. Descendant Of Smith 11

    20 December 2023 at 6:08 pm

    At some point Labour (or greens or someone else) is going to need to campaign on raising taxes in order to pay for things. The sell off of assets over the years reduced other forms of government income and continuing down the tracks of the pattern of borrowing to fund stuff with an aging and less productive population will get us nowhere but into further austerity measures on the poor.

    You only need to see what has happened with councils – sold off income producing assets to the point where pretty much their only funding source is ratepayers.

    Simple changes rather than complex:

    1. Reinstate stamp duty but at a higher rate – at least 10%
    2. Increase company tax – the promise of lowering company tax was that higher wages would be paid – this has not occurred. Increased profits have instead gone to shareholders and owners. Change the legislation to balance out the responsibility to customers and not just shareholders eg customers should not have pay the cost of interest on money borrowed to pay shareholders dividends – power companies I'm looking at you and am pretty sure water companies will go down the same road as in the UK.
    3. Increase the tax rate on higher incomes and index the tax brackets to inflation so relativity is maintained. I would suggest incomes over $100,000 to start with – but equally start giving some tax rebates to those who have non-working partners.
    4. In years of unexpected or larger than planned surpluses return 50% above forecast surplus to individual taxpayers and use 50% to reduce debt. Accept the year has been good and we should all benefit.
    5. Increase the support from employers towards staff members super to match Australia.

    Be clear about needing to pay for NZS costs and for those on benefit to have dignity. Be clear that money has to circulate in the economy not build up in rich people's savings.
    • SPC 11.1

      20 December 2023 at 8:03 pm

      1.Oz has stamp duty at 5% over $2m. Apply over that level.

      2.Use the American concept of progressive taxation where larger companies pay a higher rate. Thus large banks and supermarkets pay at 33%

      And add a windfall profits tax of 5% during some parts of the economic cycle.

      3.We should move further towards what Oz has*, changes at the higher level, 40 cents at $150,000 and 45* cents over $200,000*.

      4.Yes a temporary surplus should not result in tax cuts that are not sustainable, debt payments are best (unless there is need – hardship, the money should go to the Kiwi Saver accounts, as the economy does not need further stimulus).

      5.Increase the employer contribution sure, but we also need ACC to cover sickness, and employee and employer contribution to aged care and the NZSF (so any contributions are no longer funded by tax or borrowing).
    • Michael P 11.2

      22 December 2023 at 7:08 am

      For a good start they should amend the income tax act and any other relevant legislation to get rid of all loopholes. For example, make all income subject to income tax. Calling some forms of income 'not income' for income tax purposes must have been designed by really corrupt individuals and is just a way of ensuring the well off don't pay income tax on all of their income. It's not about 'envy' it's about fairness.

      The tax burden should also as soon and as much as possible be moved away from work and onto wealth which would at least be a start towards combating rising inequality.
12. Nic the NZer 12

    20 December 2023 at 7:25 pm

    I do sometimes wonder if the authors opinion is formed based on which side of the bed they got out of this morning. In particular

    "There will be, as we saw this morning, recounting of Reserve Bank Governor Adrian Orr’s railing at the spectre of inflation from the bad old days of Muldoon, but as with Orr yesterday at Parliament yesterday, no idea of why the country’s economy is performing so poorly and no accountability for what the Reserve Bank has done to us all, and no useful plan to change it."

    This doesn't seem clear on any of what is supposedly so poorly performing about the economy, why the Reserve Bank is responsible for that, what might be implied to address that.

    Thinking of things about the economy that the RBNZ might be held responsible for this probably implies the elevated inflation rate is the supposed problem? However 1) the inflation was always supply side and imported (not so much the RBNZ can do about this), 2) NZ's inflation rate has actually subsided relatively quickly compared to other similar nations, 3) to the extent the RBNZ has acted its elevated OCR policy response has increased things like rental price inflation and 4) to the extent inflation has embedded in NZ this is clearly the responsibility of the govt rather than the RBNZ to limit monopoly pricing powers (and this will be made much worse by the new government).

    Thinking sensibly about the economy we might have reasonable complaints that unemployment rates should be kept down (unemployment is by far the largest waste of productivity present in the economy at any time), and that wage rates are two low compared to similar economies. But I get the impression the author is understanding the public sector is too large and government spending excessive as an assumption. Measures targeting a smaller public sector will lower employment and encourage the same low wage economy NZ has had for several decades in a similar manner to what followed the 90s National party terms in office.
    • Pat 12.1

      20 December 2023 at 7:43 pm

      Looking at your argument it may be fair to say that the Gov has little impact on how we fare into the near term future…..I would suggest correctly.
      • Nic the NZer 12.1.1

        20 December 2023 at 7:55 pm

        It will take considerable time to make any progress on NZ wage rates (say relative to Australia). There are obvious things like a short sighted austerity drive which will raise unemployment, throw away that same amount of productivity on the floor daily and longer term widen these wage rate gaps. If catching up with Australia is an actual economic goal then the country needs to stop electing right wing governments because progress is slow at best on these fronts and it goes backwards when the right wing are in power in proportion to the scale of their latest austerity drive.
        • Pat 12.1.1.1

          20 December 2023 at 8:05 pm

          In all honesty I suspect we (nobody) has the time to close the gap with, in this case Australia. We will continue to muddle along until we can no more….and who knows how long that will be.
13. weka 13

    20 December 2023 at 7:30 pm

    Their programme will stay popular until the results of their decisions hit home.

    How long is that likely to be?
14. Robert Guyton 14

    20 December 2023 at 8:02 pm

    Mini or meany?
15. Descendant Of Smith 15

    20 December 2023 at 8:14 pm

    And reduce the money circulating and increase the money being saved by the well-off. The point of money circulating to enable community wealth is not just a theoretical.

    After watching Covid-19 wreak havoc on his community, the mayor of a small US town started printing wooden money to help locals get through.

    Tenino mayor Wayne Fournier told Sunday Morning he looked to the past when coming up with the idea to print wooden currency.

    Local leaders had come together to think about how they could help community members who were struggling amid the Covid-19 crisis. An idea that "rose to the top" was printing money – something the community did back in 1931 during the Great Depression.

    They dug out the same printing press used to print money almost a century ago from the museum, and put it to use.

    The money holds the value of $US1 and is backed by the city government, which acts as the treasury.

    https://www.rnz.co.nz/national/programmes/sunday/audio/2018754580/covid-19-why-a-washington-town-is-printing-its-own-wooden-money

    “There’s a structural failing in the way money is being introduced, through policies like quantitative easing,” he said. “Simply printing more money does not mean that it will circulate. If someone is having a heart attack, do you give them a blood transfusion, or CPR?”

    https://www.bloomberg.com/news/articles/2020-08-07/a-depression-era-idea-gets-a-new-look-local-money

    Wörgl was the site of the "Miracle of Wörgl" during the Great Depression. It was started on July 31, 1932, with the issuing of "Certified Compensation Bills", a form of local currency commonly known as Stamp Scrip, or Freigeld. This was an application of the monetary theories of the economist Silvio Gesell by the town's then-mayor, Michael Unterguggenberger.

    The experiment resulted in a growth in employment and meant that local government projects such as new houses, a reservoir, a ski jump and a bridge could all be completed, seeming to defy the depression in the rest of the country. Inflation and deflation are also reputed to have been non-existent for the duration of the experiment.

    https://en.wikipedia.org/wiki/W%C3%B6rgl#The_W.C3.B6rgl_Experiment

    What if you used a different currency to buy a sandwich from your main street deli than you did to make a purchase at the Wal-Mart 10 miles outside town? “BerkShares,” the local paper currency of Berkshire County in Massachusetts, lets you do that. The popularity of BerkShares has ebbed and flowed, but with about $130,000 worth of notes currently in circulation, the number of businesses accepting the currency has jumped to about 400 from the 100 that initially participated in 2006.

    https://www.pbs.org/newshour/economy/how-to-print-dollars-in-your-own-backyard-and-keep-them-away-from-wal-mart

    May be time for a union backed currency.
    • Michael P 15.1

      22 December 2023 at 7:30 am

      Some good ideas in there.

      The biggest game changer would be to make banks publicly owned and not for profit institutions. If a bank only has to make enough money to cover it's costs it leaves a huge amount of room to benefit the people. Banks should be there to facilitate transactions and help people and the community in general manage their money / get ahead, not to make vast profits benefitting a small number of wealthy people.

      An example and / or test case (obviously much simplified) could be Auckland council starting an Auckland bank. They would have a massive guaranteed deposit base of billions (rates) which would enable them to utilize the fractional reserve system to generate 'loans' (eg for businesses to expand or a mortgage for first home buyers) These could be at very, very low (sometimes even 0%) interest rates if the objective is the less tangible but far higher benefits to businesses, people and the economy rather than just profit for private foreign shareholders.

      It's the sort of thing that could be done, it just needs the person / people with enough political will and vision to do it.

      I've not met anyone who has been able to convince me that a bank can't be non profit. Obviously it would have to be publicly owned with the public being the investors to get it started and also being the long term beneficiaries.

      We currently allow (for some reason) privately owned, for profit banks to create the vast majority of our money out of thin air and make massive profits off charging us for the privilege. I see no reason why we can’t create all of that money ourselves (via a publicly owned bank) and have all of the benefits come to people, businesses and the community.

      If Kiwibank were to be made non profit, The potential benefits to the people would far outweigh whatever income it currently generates for us.
16. Powerman 16

    21 December 2023 at 6:52 am

    Nicotina Willis resembles Liz Truss–self-assured, smug, crafty and hopefully doomed to fail. Lets hope that she is gone before she does too much damage.
    • Anne 16.1

      21 December 2023 at 2:24 pm

      My thoughts too Powerman. She even talks like Truss but with a Kiwi twang.
      • Incognito 16.1.1

        21 December 2023 at 3:32 pm

        Obviously, Willis has been heavily influenced if not indoctrinated by Truss and co. It’s becoming more common for RW politicians and their shills across the globe to copy their playbooks and parrot each other in style, mostly, and, less so, in substance. It’s a form of social mimicry and it works for social influencers, which spin doctors and style coaches (and advertisers) use to their advantage.

        Often, this shows as a (striking) resemblance in appearance and mannerisms.

        
        • Anne 16.1.1.1

          21 December 2023 at 4:37 pm

          Yep. She copies Truss alright. She even tries to dress in a similar fashion. I also saw her in an outfit the other day which reminded me of a modern day version of Boadicea. 😮

          It beggars belief she is copying her when you look at what happened to Truss.
17. georgecom 17

    21 December 2023 at 8:11 am

    my overall impression everything can be sacrificed for tax cuts. every bit of funding allocated to tax cuts, nothing left for anything else. not a budget based on commonsense and reality, but rather one fixated on a tax cut
    • bwaghorn 17.1

      21 December 2023 at 9:33 am

      A tax cut that will either be so small it'll be of little use, or inflationary
18. dv 18

    21 December 2023 at 9:55 am

    But with Natz tax cut calc you can SEE EXACTLY HOW MUCH BETTER OFF you will be.

    https://www.national.org.nz/national_launches_new_tax_calculator

    New Zealanders can now see exactly how much better off they would be under a National Government and how much they are putting at risk with a Labour one, National’s Finance spokesperson Nicola Willis says.

    ITS still up.
19. adam 19

    21 December 2023 at 10:53 am

    So the people who paid national and it's coalition partners to win, get the big return for their fiscal rewards.

    Funny how people just swallow this shit.
20. Ad 20

    21 December 2023 at 10:57 am

    Willis said during the election that the tax cuts would cost about $15billion.

    She's announced savings of about $7.5b

    She needs to find cuts of another $7.5b by March to get into the budget.

    What areas will she target?
    • Robert Guyton 20.1

      21 December 2023 at 11:03 am

      None from her own sphere.
    • David 20.2

      21 December 2023 at 12:07 pm

      "She needs to find cuts of another $7.5b by March to get into the budget."

      Or new revenue sources?
      • Nic the NZer 20.2.1

        21 December 2023 at 12:55 pm

        Or none of the above.

        If the budget turned out to be off by $10 billion she could credibly attribute that to treasury forecast error. It's been revised by $2 billion since September for example.

        In fact the forecast is quite bullish as it stands, expecting the economy to hold up while the government is openly engaging in an austerity drive. If that mentality takes hold then in the order of $10 billion of lower tax take is more than plausible, while if a significant tax windfall (which was not offset by cuts) ended up getting largely spent this could easily lead to a much higher than expected tax take effectively offsetting it.

        In fact its very likely that a weak form of "Ricardian Equivalence" is built into the treasury forecast. This is the idea that the publics reaction to govt austerity will be increased spending and conversely that larger govt deficits will decrease public spending.

        https://www.investopedia.com/terms/r/ricardianequivalence.asp

        If this isn't a factual description of economic behavior you can see how just going with the tax cut unfunded could result in a sooner and more sustained budget surplus (compared to offsetting your tax cuts), and this fact being totally lost on treasury (despite clearly having happened very recently during 2020).
        • David 20.2.1.1

          21 December 2023 at 1:29 pm

          One factor mitigating against the ricardian equivalence (in the absence of tax cuts) is high interest rates. Current interest rates are high by (recent) historical standards, which reduces disposable income for home-owners with a mortgage, and for tenants (where landlords seek to pass those increased costs on).

          Even if tax cuts are delivered (which appears inevitable), tax payers may still not have much (or any) disposable income to apply to discretionary spending.

          On the positive side (if you are a borrower) at least one major bank (Mortgage rate pain: We're 90% of the way there | Stuff.co.nz) are expecting mortgage rates to begin to drop mid 2024.
          • Nic the NZer 20.2.1.1.1

            21 December 2023 at 1:44 pm

            The factor mitigating against Ricardian equivalence is nobody has ever demonstrated its a realistic description of peoples economic behavior.

            If it was realistic then higher interest rates aside the governments austerity drive should be encouraging the country into investment. In reverse the previous governments spending on public services should have been discouraging investment. Quite the opposite of this was the behavior we observed in practice of course.
        • Michael P 20.2.1.2

          22 December 2023 at 7:44 am

          Government shouldn't be making "sustained budget surpluses". If they are then there should be tax cuts because they are collecting too much income tax hence having more than they are spending.
          • Nic the NZer 20.2.1.2.1

            22 December 2023 at 10:56 am

            There is not a general rule about that. Probably it depends on the balance of trade of the country what is appropriate at the time. I agree that with NZ often running a small trade deficit probably the government budget should also be slightly in deficit (as otherwise our NZ income falls or becomes more [housing] debt reliant).

            But the point I was making is that the easiest way to maintain a stable budget position is to keep employment high rather than cutting spending and then discovering your tax take falls by a more than you cut (which is very common).
      • Incognito 20.2.2

        21 December 2023 at 1:12 pm

        Sure.

        Increase taxing of paper boys/girls, raise GST, sell assets, special tax on alcohol-free beer, introduce special permits and a walking tax for walking school buses, introduce tolls on pedestrian crossings and cycle ways, and increase the prescription fees for contraceptives.
    • Ghostwhowalks 20.3

      21 December 2023 at 2:55 pm

      “Willis said during the election that the tax cuts would cost about $15billion.

      She’s announced savings of about $7.5b

      She needs to find cuts of another $7.5b by March to get into the budget.”

      Thats over 4 years , a common timespan used to make spending or cuts look bigger than they are
      • Incognito 20.3.1

        21 December 2023 at 3:01 pm

        Willis has no idea about anything and it’s all smoke & mirrors.

        National’s election policy predicts changes to tax thresholds will cost just under $9 billion, over four years.

        But, given the final makeup of the government’s tax package is still unclear, so, too, is the final cost.

        https://www.rnz.co.nz/news/political/505235/how-will-the-tax-cuts-be-paid-for
        • Thinker 20.3.1.1

          21 December 2023 at 6:29 pm

          They're getting extra tax revenue from the smokes.

          Maybe they'll tax mirrors?
        • Mike the Lefty 20.3.1.2

          21 December 2023 at 8:35 pm

          Over FOUR years?!

          That is actually comparatively long term for National.

          They can't usually look ahead further than the next election.

          But it makes little difference.

          This micro budget is solely for the purpose of setting themselves up for later failure by convincing New Zealanders that whatever horrible things happen in the future it is all Labour's fault.
          • Incognito 20.3.1.2.1

            21 December 2023 at 9:16 pm

            All they had to do, in the end, was to get this nano-Budget out of the way, just before the break over summer, without too much egg on their faces. They successfully downplayed the whole thing and almost nobody blinked or batted an eyelid when it turned into a mega-non-event. Only a couple of MSM people cared enough to pay attention to the shambles, e.g., https://www.stuff.co.nz/national/politics/301030420/the-sausages-messes-and-holes-of-nationals-minibudget and https://newsroom.co.nz/2023/12/20/no-smoking-gun-for-willis-but-struggling-economy-will-do/ together with some decent reporting over at RNZ [I haven’t checked NZH].
    • adam 20.4

      21 December 2023 at 7:03 pm

      The poor.

      It's a Tory thing.
      • Thinker 20.4.1

        22 December 2023 at 7:11 am

        For the rich, Fiscal Cliff-views over all they survey.

        For the poor, Fiscal Biffs from the rich.

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