Budget 2026 has been unveiled, and Finance Minister Nicola Willis has confirmed this is a 'careful' Budget with an eye to the future.
Healthcare, education, and infrastructure are the top priorities, and the Government's forecasting an earlier than expected return to surplus.
There's also a new levy on banks and other financial market participants from mid-2027.
Infometrics Chief Executive Brad Olsen says it illustrates a targeted approach.
"There is a much greater focus on user pays, so instead of just general taxes paying for stuff, if you're using a service, if you're getting a benefit - you're paying for a whole lot more as well."
Newstalk ZB senior political correspondent Barry Soper says Labour's been waiting to see how much money's in the kete - before announcing its election policies.
He says there's clearly not much.
"I think this Government's resisted, probably against a number of odds, of maybe offering a few tantalising pieces, to go towards the election."
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Speaker 1 (00:09):
You're listening to a podcast from Newstalks be follow this
and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
A very good afternoon, cheer, Welcome in.
Speaker 3 (00:19):
It is seven past two and the budget has been
revealed for twenty twenty six. Exciting, exciting, So here's a
couple of top lines for you. Joining us very shortly
as Brad olsoon at a couple of top lines. There
are no specific cost of living payments in this budget
or sugar hits, as Finance Minister and Niicola Willis did indicate,
but there is certainly a few surprises in there. Box
(00:41):
are set to return to surplus earlier than expected. The
budget is supporting record health funding of thirty four on
z point two billion dollars, and there is some changes
to bol Kanser screenings as well as investment in education
trades and a lot more to breakdown over the next hour.
To help us do that, we are joined right now
by Inframetrics chief executive and principal economist Brad Olson, who's
(01:03):
been in the lockup and is just out.
Speaker 4 (01:05):
Brad, afternoon to you, Hello, team, how's it going very good?
Speaker 5 (01:09):
Thanks now, Brad, I've just written some potential names for
the budget. So as I go through, just say yes
or no. If they count the bread and butter budget, Yeah, yeah,
maybe the brutal bureaucrat bashing budget.
Speaker 4 (01:23):
Oh it's a bit too harsh.
Speaker 5 (01:25):
Okay, that's what about the tough love budget. Yeah, that's
more on the no solutions just trade Off's budget, a
bit long, the stash the cash budget.
Speaker 6 (01:38):
Yeah, getting there, okay, okay, all right, see this is
why you get paid the big Bucks brand.
Speaker 2 (01:43):
You've got a critical little guys.
Speaker 6 (01:44):
I've called it the little Bee budget. Yeah, there's no big,
one massive thing usually having a budget that's you know,
the centerpieces everyone's talking about. There's lots of little things,
very little for an individual household, but lots of other
structural changes. I think the government's trying to fund. So
an unusual budget, a little bit for election, yet certainly
no sugar hits.
Speaker 2 (02:03):
Yeah, so the little Bee budget. All right, that's a
good name.
Speaker 3 (02:06):
So let's kick into the surplus now that is expected
to be a little bit earlier, from twenty twenty nine
to twenty thirty, depending on how the measure is used,
of course, Brad, how significant was that in terms of
what Nikola Willis had to do to try and get
that surplus a little bit earlier than expected.
Speaker 6 (02:22):
Well, there's been a huge amount of heavy lifting to
get that suitflus back on the cards over the next
sort of five or six years. The Treasury is now
expecting an extra ten point eight billion dollars worth of
revenue taxes collected and similar compared to what they would
have thought back in December, so a huge amount more
on the revenue front. On the spending side, the government's
had to be very very limited. They've got to fund
(02:44):
a huge amount more healthcare, they've got to fund more
in the way of superannuation. But through all of that,
they're only spending a net seven hundred and seventy million
dollars more over that forecast period. So they've had to
find a lot of savings, a lot of cutbacks in
other areas to pay for it. Now Treasury has also
said this return to surplus in twenty nine or thirty,
depending on the measure. They're putting sort of a fifty
(03:07):
to sixty percent chance on things. There's a lot of
volatility out there. No one's particularly certain about what economic
conditions will be like even in the next six minutes
rather than next sort of you know, six years, so
big question marks still, but yes, a big change coming
because the government has been trying to get to this
position for a while.
Speaker 3 (03:24):
Were there any indications on where extra savings came from
within this a budget? Rather, we've already been told that
it's going to come through some cutbacks in the public service,
obviously the removal of that funding for the fees free
last year. Were there any other cuts that were revealed
in this budget?
Speaker 6 (03:42):
Those were most of them coming through one of the
other switch arounds though that you did see, and probably
the biggest sort of single piece of the budget, although
it's still not worth a huge amount, was some extra
funding that the government is bringing through from adding a
prudential levy basically a bank tax on the bank so
that they have to pay for their own regulation. So
like when we look through some of the figures, that
(04:02):
did seem to be an area where there was a
little bit more revenue showing through from this bank levy,
a bit more as well from fuel excise charges at duties,
your road user charges going up in the.
Speaker 4 (04:12):
Future, so some of it.
Speaker 6 (04:14):
A lot of this in my mind is user pays,
so it's not so much that. I mean, government's found
a lot of savings. Yes, they've also tried to change
this revenue piece around. I think though that there is
a much greater focus on user pays so instead of
just general taxes paying for stuff, if you're using a service,
if you're getting a benefit, you're paying for it a
whole lot more as well.
Speaker 5 (04:32):
So how do we do we know how that Levey
is going to work on the banks?
Speaker 6 (04:35):
Well, the idea is that they'll pay something. I suspect
it will probably be some sort of proportion you know,
of profits or something. It's expected to raise two hundred
and nine million dollars over the next.
Speaker 4 (04:47):
Four years, so it's not huge.
Speaker 6 (04:48):
Let's be clear, it's just over fifty million year, and
it'll be paid through to the Reserve Bank because you know,
one of the regulators are there, and then the Reserve
Bank will then effectively pass that money back through for
central government through an increased dividend. Now, what was very
interesting though, is that, like, let's be clear, two hundred
and nine million is a huge amount of money for
you were right from a government point of view, it's
(05:10):
pretty limited. But during the press conference with the Finance minister.
She made it pretty clear that there was much stronger
talk of an even bigger levy, but she couldn't get
it across the line with cabinets. So it's not clear
if that was Act or New Zealand First who was
trying to hold things back, but there was clearly more
on the cards, but they just couldn't get it through.
Speaker 5 (05:28):
What growth is forecast for this to be pulled off?
And is that realistic do you think, brad Well?
Speaker 6 (05:35):
I mean, there's a bit more coming forward in the
short term, it's going to of course be a whole
lot more challenging. You know that this Iran war situation
is definitely going to sort of crimp matters going forward.
But if you look at that sort of growth heading
into the future, two point sorry, three point one percent
GENDP growth being inspected out in twenty twenty seven and
(05:56):
then sort of remaining at that level in twenty twenty eight,
so you know, that'd be the fastest in a couple
of years. Probably the big one as well. It's certainly
something the government's been focusing on is the fact that
employment growth is expected to sort of head above two
percent from twenty twenty seven for a couple of years,
so that growth in people getting jobs and seeing wages generally,
(06:16):
but also even wages on an inflation adjusted basis rising.
But you know, clearly there's a focus at the moment
on trying to get that growth as you're going, and
that higher economic growth is where you get that sort
of higher revenue for government if you know there's better
economic activity. There's clearly more profits from businesses, there's more
spending by households, there's more people in work paying income tax,
(06:37):
so all of that growth sort of adding to the
tax base over time.
Speaker 4 (06:40):
So a real reversal.
Speaker 6 (06:41):
You'll probably remember a couple of years ago we seem
to just kick downgrading the government finances because times were
tough and all these difficulties were showing through. I feel
like we're now moving back to potentially having overdone how
bad things might get. We're now starting to look a
bit more optimistic, maybe over optimistic, but certainly looking greener.
Speaker 5 (07:00):
Oh that feels good. Can you explain to me why
ACC isn't being factored into reaching the service the siplus.
Speaker 6 (07:08):
Well effectively to make the numbers look a little bit better.
It would be the easiest way to say, I mean
a couple of years ago, the government came out We've
always used this thing called the obergal, the operating.
Speaker 4 (07:19):
Balance before gains and losses.
Speaker 6 (07:21):
Which tries to give us an idea of effectively when
it comes to sort of day to day spending, is
government spending more or less than its earning and obergaill
X is excluding the acc And that was because at
the time, acc didn't look like it was going to
be able to pay for it south sort of in
the short term.
Speaker 4 (07:37):
Over the long term it would.
Speaker 6 (07:38):
Fund it, but it was paying out more and more
for all of those injuries and accidents than it was
making back in terms of investment returns. So the government
decided to strip it out of the surplus figures to
try and give a They would call it a clearer
read of things, because acc should be self paying over time,
but maybe not in any one given year.
Speaker 4 (07:57):
You can sort of choose.
Speaker 6 (07:58):
I think the biggest one for me is that if
one of the figures, if the obergill X was sort
of looking really good.
Speaker 4 (08:03):
But your normal the og obergal wasn't, you'd.
Speaker 6 (08:07):
Been asking some They're both moving in the same direction,
though it's just a bit of a timing difference depending
on exactly which year you want to choose.
Speaker 2 (08:14):
That is good news, Brad.
Speaker 3 (08:15):
We're going to take a quick break, but when we
come back, let's dig into infrastructure. There's been a sizeable
boost in infrastructure spending, so we'll get to that next.
It is a quarter pass to if you've got a question.
By all means, nine two ninety two is the text number.
We are breaking down budget twenty twenty six and joining
us is in for Metrics Chief executive and principal economists
Brad Olson. Brad, let's break down the boost to rail.
(08:39):
Winston Peters is going to be very happy with this
amount of money going into rail over the next four years.
Speaker 6 (08:44):
Willy, what I mean the government's given one point zero
seven five billion. I hope that needs for points seventy
five billion is important, ah.
Speaker 4 (08:53):
An investment.
Speaker 6 (08:53):
I mean to be fair, that's over just four years,
so that's like two hundred and fifty milie Yeah, plus
some additional moneys. It's going into keeping our metrorail systems
going forward.
Speaker 4 (09:04):
I mean, look, there's clearly been.
Speaker 6 (09:05):
A lot of focus on rail over time as well
that you know, with the fuel crisis going on at
the moment, that keeping the traps going is an expensive issue,
so the more that we can think about that sort
of rail investment is important.
Speaker 4 (09:19):
A lot of this is sort of I'm not going
to say bau.
Speaker 6 (09:21):
It's just a continuation of further levels of investment you've
seen the last couple of years. You know, there's focuses
around trying to sort of, you know, put the right
investments in for the right tracks as well as you know,
having the right rail cars and all of that. I mean,
it's one of those things Winston Peters will be very happy.
It's probably one of those things. We almost hope that
(09:43):
the average ki we doesn't see that effect only because
stuff should just move through the night or you know,
not have as many traps on the roadways.
Speaker 5 (09:51):
Is this renewal or is this building new infrastructure in rail?
Speaker 4 (09:58):
There's elements of both looking through it.
Speaker 6 (10:00):
The government hasn't provided sort of heaps of detail because
it's sort of funding the investment program, but it does
look like there's sort of elements of I guess it
looks like more upgrades of some of the core stuff
that was already looking to go on. You know, they'll
put new tracks and sleepers and ballast and they need
to do some slope remediation and you know, effectively after
all this awful rain we seem to have had through
(10:22):
the first half a year and previously there's a number
of sort of sites. They're still operational, but clearly they
need a bit more resilience added in. They're also trying
to get through some of the backlog that they've created
over time on the rail front. I think one of
the big changes is that you've seen sort of a
bit of a funding shift over time, so there's actually
a bit more money coming from rail itself. You know,
it's a bit more commercially competitive now to use rail
(10:44):
and it's funding itself. So a bunch of renewals, a
bunch of new investment and getting stuff up to scratch
as well.
Speaker 5 (10:50):
And is it metropolitan or into city sort of rail situation.
Speaker 6 (10:56):
Some of it's going to be that sort of intercity
and more I guess around freight. But there are specific
investments and some of the backlogs of renewals across both
Auckland and Wellington's metro network. So you know they're trying
to get effectively that service reliable up and I mean,
you guys see this in Auckland ride. Every time that
something breaks down on the rail tracks, it brings everyone
to a literal standstill. Down here in Wellington we have
(11:16):
the same thing. No one wants to go and sit
on a bus when you thought you were taking a
nice fast train. So I think it's probably one of
those things. It's not like you'll necessarily see huge amounts
of new, shiny stuff.
Speaker 4 (11:26):
It's just trying to get the.
Speaker 6 (11:27):
Damn things working more consistently instead of the sort of
stop start progress we might have had before.
Speaker 3 (11:32):
That'll be music to the heads of a lot of
auckland Does and Walentonians for that matter.
Speaker 5 (11:36):
So Winston Peters says, New Zealand have invested sweat, blood
and tears to build the national rail network, but previous
governments led it rot. So is it safe to say
that that Winston has pushed hard on this one and
maybe the government it's not really the government's dream project,
the national government's.
Speaker 6 (11:56):
I think you've probably got a balance right. Yes, Winston
Peters has got a fair amount for rail. There's a
lot of other stuff too that the rest of government
will be happy with. Seven billion dollars total in terms
of an additional boost to capital spending, and I think
this is where you probably see it play out a
lot more across sort of government priorities. You've seen, you know,
a lot that's gone into other parts of the transport network.
(12:17):
So the government is specifically funding one point seven odd
billion for an extension to the Wycato Expressway between Cambridge
and Prairie. So that's been talked about for a while,
it's ready to go. It's got a good return, you know,
for every dollar invested, it should bring back sort of
nearly three dollars coming through.
Speaker 4 (12:35):
So that's important.
Speaker 6 (12:36):
And the other big one, especially again after all this
wild weather, is there's an extra four hundred million being
allocated for state highway resilience projects. So you know the
fact that the ywe could gorge through the Gisbane has
been out of commission, State Highway three Gorge, the Alaquino
Gorge through to New Plymouth. There's you know, State Higway
twenty five around Crominal. There's a huge number of these
things where every time we have some world where the
(12:58):
our communities get cut off.
Speaker 4 (13:00):
So that's important. The big one for me in the
real focus.
Speaker 6 (13:03):
I don't have any numbers because it's all commercially sensitive,
but government have committed to a new one hundred and
fifty eight bed tower block up in fanged A Hospital.
They are putting more money into getting new hospital developments
or redevelopments for Totong, Hawk's Bay and Parniston North hospitals.
There's more coming through for you know, schools and simmer
(13:24):
in Queenstown. So I think you're seeing a much greater
focus on some of that social infrastructure alongside resilience of
what our transport networks.
Speaker 2 (13:31):
Need, and just on hospitals as well.
Speaker 3 (13:33):
Brad, there is budget for a new hospital in South Auckland.
Speaker 6 (13:39):
Yeah, so they're looking to acquire some land down in
the south of Auckland. Again very sort of hush hush
as to exactly what it will what it will cost,
and where exactly it will be. But look, the focus
I think near as you're seeing that population growth continue
over time in South Auckland.
Speaker 4 (13:55):
There's a clear need for it.
Speaker 6 (13:57):
And again we know that you know that the more
money that goes into to how often you sort of
see that return if you can get people moving through
the house system quicker and more efficiently, so instead of
having to sort of have people that are moving out
or having to go to existing hospitals. This focus is
very much on those growing populations, not only in South
Auckland but also that sort of northern White Cuttle area.
(14:20):
It's a big sort of growth node for the country,
which is great, but if you don't have the services,
you create bottlenecks in other areas. So yeah, the big
thing here right, it's not going to be built tomorrow,
but by getting the land ahead of time before it
gets even more expensive, means that the sort of plan
is in motion to build that sooner rather than later.
Speaker 5 (14:36):
And a one hundred and fifty eight bed war to
tower at Funga A's Hospital. Was this something that was
muted in advance.
Speaker 6 (14:44):
Well, we've talked. I mean we've talked about it for
a long time. My hometown is fun today and I
can tell you having been, you know, having to visit
family members in the hospital when one of the windows
literally just fell out of it's fixing and fell to
the ground. I mean the place is not a bit
old and busted. That's pretty old inmbusted that there needs.
Speaker 4 (15:00):
A bit more work.
Speaker 6 (15:01):
And again the north is growing and fung Day based
hospital is a big part of you know, the health
infrastructure of North and so yeah, it was a little
bit foreshadoed. You've seen a bit of that in terms
of more money for the road for or courthouse. There's
a few more police stations as well being built. One
in the West Coast, I think a bit of remediation
in the Greymouth police station I think it was so yeah, Look,
(15:21):
there is a big focus on trying to get some
of that sort of social structure going so that we've
got the right services around the country.
Speaker 5 (15:27):
And also looking at a temporary ICU at Palmston North
Hospital and a fit out of an impatient unit at
Total Hospital. So quite a bit of health stuff in there.
Speaker 2 (15:36):
Yeah, that's going to be very popular.
Speaker 3 (15:37):
You would say, Brad, there's a Texas come through and
there's a few in this regard as well, but here's
the one I've picked out. Get a guys and brads.
Is there anything special for small business? Do they still
have tax and centers for purchasing new capital etc. That's
from Shane.
Speaker 4 (15:55):
Yeah.
Speaker 6 (15:55):
Look, the investment boosts from last budget, it hasn't gone anywhere.
It's still there, so you can sort of write stuff
off a little bit quicker with that effective advanced appreciation.
There's other sort of a few other changes coming through
as well that helpful. Again, probably nothing major for a
lot of businesses they're.
Speaker 5 (16:16):
Or might it just last you, Brad, I think we
lost about fifteen We lost about twenty seconds of what
you were saying.
Speaker 4 (16:22):
So if you can jump the best stuff, you sounded.
Speaker 5 (16:26):
Like you're about to lean into something really good and
then you just appear it disappeared, So we've got to
hear it.
Speaker 4 (16:30):
Sorry about that.
Speaker 6 (16:32):
What we have seen in this budget, alongside investment boost
from last budget continuing is a bit more of a
sort of simplification and some easing in the research and
development text credit. Probably not necessarily focused as much on
real small businesses given that they've reduced the non administrative
internal software cap from twenty five to three mil, but
(16:54):
basically what they're trying to do is get people investing
a bit more in software and technology. That's good. Also
a bit of a shift in the fringe benefit tax
around how much admin you might have to do as
a small business owner around using your own private vehicle.
So there's some useful things in there. Probably the big
one though, that's coming through potentially for sort of investment
and people thinking about their investments overseas. Is the fact
(17:16):
that the sort of overseas investment taxes that the threshold
used to be that you had to pay tax if
you had any holdings over fifty k, that's being doubled
to one hundred k.
Speaker 4 (17:26):
So a whole lot of.
Speaker 6 (17:27):
Small investors are probably going to have slightly easier tax
treatment the next year or two.
Speaker 5 (17:31):
Right, So that's sort of the chass type people.
Speaker 6 (17:35):
Yeah, yeah, that's exactly exactly right. So just a bit
easier to sort of do some of the ADMIN. I mean,
that's sort of a centerpiece of this budget. Is nothing
too big and flashy. You're not getting anything really on
that investment side being taken away from last year, so
that continues in as good. But just trying to make
the ADMIN burden a bit easier for small business at
the moment.
Speaker 2 (17:52):
Makes a lot of sense.
Speaker 3 (17:53):
And there's a lot of teachts coming through about anythink
in regards to the price of fuel and the government
is going to be setting aside a fair chunk of funding.
Speaker 2 (18:00):
Tell us about that.
Speaker 6 (18:02):
Yeah, So the government has set aside four hundred and
fifty million dollars in a reserve for additional temporary and
targeted support if conditions worsen on the fuel front. Now,
let's be clear, I don't think that's going to mean
that there's any funding for making fuel cheaper. It's just
more that, look, if things kick off again the Middle East,
if there's major concerns again around you know, certain groups
(18:24):
who are going to be facing those higher, higher prices,
Government's got a left itself a little bit of a
kitting to provide some support. One though that again government's
talking a lot about at the moment, and we're still
trying to get a bit of clarity on is At
the minute. Government has legislated increases to your fuel excise
duty and your road user charges from the first of
January next year. The Finance Minister made it very clear
(18:47):
at the press conference today that if fuel prices were
where they are today, she will not be doing that,
which I thought was a pretty big call, because if
they don't increase those fuel excise duties and similar it's
three hundred million dollars every six months they've got to
find to keep funding all of our road infrastructure, hotholes,
all that sort of stuff. Though effectively, I think what
(19:07):
you're seeing is maybe not any relief at the pump
directly from government, but they are sort of very much
looking at how much it might cost them to not
increase things even further if fuel prices stay where they are.
Speaker 5 (19:18):
To tell you, a lot of people are texting through
Brad and they're from the South Island saying, after listening
to Brad, is there anything for the South Island? This
person says, come on, guys, the North Island gets the
treats from one end to the other and South Island
gets nothing, not even a police station in Greymouth, great
another hospital in South Orpelnd, while Central Otago generates the
GSD clip to pay for it and yet again fails
(19:41):
to get a hospital or expanded services. So this so far,
what we're getting on the text machine is the South
Island feeling neglected.
Speaker 2 (19:49):
Is not heavy?
Speaker 5 (19:50):
Is that a fair?
Speaker 4 (19:51):
No, that's that's potentially fair.
Speaker 6 (19:53):
Although there was some time that you should seem I
set up at the moment, I've got papers.
Speaker 4 (19:57):
Glor every week one.
Speaker 6 (19:59):
So everywhere there was a there was a big investment
for health infrastructure coming through in Central Ittaga that was
announced I think a couple of a week or so back.
I'm just trying desperately to find the right part of it,
because look, you're right, I mean especially right with population
growth showing through around the likes of Central Otago, Queenstown,
(20:20):
but also you know through parts of Greater Canterbury there's
a lot that's been happening there as well. I cannot
find it for the life for me in front of me,
but I do know there was funding that was coming
through full health infrastructure in that area. So part of it,
I think is also that you know that that announcement
came out pre budget because of how much focus there
has been in recent times.
Speaker 4 (20:39):
But you go through queen ctenter. Someone send to me
the other day.
Speaker 6 (20:41):
If they don't put investments into Queenstown transport in the
near term, you know there'll be congestioned in fifteen years.
I don't think the guy's ever been there. Queenstown is
congested enough. Pressure is very random.
Speaker 3 (20:52):
Yeah, absolutely, they are breaking down Nikola Willis's twenty twenty
six a budget and we are joined by Informetric's chief
executive and principal economists Brad Olson. So Brad, let's have
a chat about this particular announcement within the budget. It's
very interesting donation rules are going to be changing quite significantly.
Speaker 6 (21:11):
Yeah, so the government's are now so at the moment, right,
you can get a tax credit if you go and donate,
and at the moment that's effectively uncapped. And so the
government is now going to make it so that you
are kept at donating one.
Speaker 4 (21:23):
Hundred thousand dollars a year.
Speaker 6 (21:25):
I mean again, my current donation scheme is not quite
that high.
Speaker 4 (21:29):
And so you can only get the tax cuted up
to one hundred k. Though.
Speaker 6 (21:32):
What's really interesting is why this is happening, and it's
because there are some people out there to effectively donate
every year to their own charitable enterprise business, you know,
we charitable service. They do so much that it all
becomes a very big text writer for them. So they
can sort of, you know, they can move it from
their personal money or business money through to.
Speaker 4 (21:53):
The charitable arm and then do a bunch of charitable stuff.
Speaker 6 (21:55):
That's all good and well, but it's sort of not
designed that you know, you can do that. It's more
so that you and me, when we go and donate,
there's a reason to. And so the government's sort of
said that's their focus. They are going to sort of
provide that support, particularly around sort of nonprofit organization. So
they want to enable, yes, people to still do it,
but not for people to sort of wrought it too much.
Speaker 2 (22:15):
Yeah, very good.
Speaker 3 (22:16):
Right, it's time to welcome in new stalks there b
s INIR political correspondent Barry Soaper, Barry, thank you very
much for joining us.
Speaker 7 (22:23):
Good afternoon, gentlemen.
Speaker 5 (22:24):
So Brad, he's called it the little bee budget.
Speaker 8 (22:27):
You've got a name for it, Barry, Well, I call
it the bread and margarine budget, with the butter belonging
to Winston Peters, because.
Speaker 7 (22:36):
He's wallowing in the vat now.
Speaker 8 (22:38):
Because if her name's Winston Peters and you're in charge
of the ministry, your ministry is pretty.
Speaker 7 (22:44):
Well looked after him.
Speaker 8 (22:45):
And you look at foreign affairs for example, And I
remember a time, and Brad, you'll remember this when Winston
I think he got half a billion dollars for foreign
affairs out of one of the budgets. And now, of
course he's got more money one hundred and forty five
million dollars for diplomatic the diplomatic network overseas.
Speaker 7 (23:05):
He's got more for the.
Speaker 8 (23:06):
Pacific twenty million bucks for the Pacific Islands. Forum here
next year, which he's got to get anyway. But then
the big one, and this is capital expenditure, and that's
where you know a lot of not surprised, but big
money went and it was expected to and just over
a billion dollars has been committed to Kiwi Rowl's plan
(23:27):
network to be implemented next year between next year in
twenty thirty. The other thing about this budget is that
Nikola Willis has kept an eye on those credit rating
agencies because they are very important. And that's why the
surplus that she is announced today is extraordinarily important because
the rating agencies look at that, look at the intent
(23:51):
of this government. Not a big social spend here, which
I think is the way it should be given the
tight physical circumstances that we're facing. But I think you look,
it's bread margarine because there's really not a lot there
for the social s. But for Winston Peters it's certainly better.
Speaker 5 (24:11):
So what about the other coalition partner if they don't
have to make agg happy.
Speaker 8 (24:15):
Well, not as much as are Winston Peters. And we
know that Winston is a pretty hard bargainer, and you
know he there's aspects of it there that Act will
be happy with and you know, I don't think they
will come away unhappy. The factor is that the coalition
partners all appearing together this week out at the budget
(24:39):
printing press was important because normally it's just the Finance
Minst goes there, but so clearly all the parties are
signed up to it.
Speaker 7 (24:49):
Yeah.
Speaker 5 (24:49):
Well, David Seymour said his fingers were all over it
to me at one point, so yeah.
Speaker 7 (24:52):
They would be claiming all the good bits, I'm sure.
Speaker 5 (24:54):
So is this a win for the government politically? Does
it help their reelection chances? Do you think, Barry?
Speaker 8 (24:58):
Well, look the thing that wins elections and Muldoon said this,
dere I say it way back, he said, put more
money in the voter's hit pockets and you'll win the
treasury benches.
Speaker 7 (25:12):
Well, there's not a lot of.
Speaker 8 (25:13):
More money going in the hip pockets out of this budget,
and neither there should be because there are so many
unknowns now between now and the election.
Speaker 7 (25:24):
We don't know what the hell is going on with
the war in Iran.
Speaker 8 (25:27):
That could get worse. And I see there's been a
bit of a flare up in the straits of Hall
Miss today. So you know who knows, and this is
a government I think bringing out a fiscal document that
really it has to look over its shoulder all the
time because it can't be absolute about the figures that
it's talking about today.
Speaker 2 (25:48):
Brad, would you concur with that?
Speaker 3 (25:49):
What are the optics of this budget when it comes
to the public perception and the election ahead?
Speaker 4 (25:55):
Yeah, I mean, look, I think a smart policy move.
Speaker 6 (25:58):
There's a lot of good things coming through in this budget,
sort of bitsy pieces across the board. It's not great
probably from a retail politic point of view, because hows
won't probably notice a whole lot of themselves. But I
think look equally, I feel like people are probably okay
with it.
Speaker 4 (26:15):
They realize you.
Speaker 6 (26:15):
Can't just keep spending money hand over fist, you know,
and expect it to be magiced out of thin air.
So that level of consolidation that the biggest bit, I
think is the focus that government's had on. Look, we're
not going to give money back to households directly, that
that is challenging for people, but we are going to
make sure that we're more resilient. There's more money going
into defense, there's more money going into infrastructure, so that
when bad times hit and they will. We're sort of
(26:38):
a little bit easier to go through it rather than
sort of being going through.
Speaker 4 (26:41):
The world all the time.
Speaker 3 (26:42):
We are breaking down the budget twenty twenty six and
we are joined by Brad Olsen and BARRYE.
Speaker 2 (26:47):
Soper.
Speaker 5 (26:48):
Now, Barry, what will Labor the Greens push back on?
The Greens will be celebrating the rail investment, surely they'll
be jumping up and down and affording that. But what
will they push back on.
Speaker 8 (26:57):
They should be popping the Fijoa fizzy corks tonight, because
you know, the rail thing is very good. The Greens
have banged on about a bit of rail network. Well,
certainly the money has been put aside for that in
the spend outside of the social spend.
Speaker 7 (27:16):
So that's not a bad thing.
Speaker 8 (27:18):
The Labor Party will they will certainly knock the fact
that there's not the spend on those who are struggling
to make ends meet. I mean, there is stuff in there,
but it's not going to impact them the way that
the Labor Party would have hoped should have been impacted.
But you know, you're always going to get winges and
(27:39):
when you're putting out a budget at this time of
severe fiscal restraint. I think they shouldn't have too much
to complain about it in this government in the way
that Nikola Willis and the other two coalition partners have
sat down and come to a pretty good agreement on this.
Speaker 5 (27:59):
Brad the bell screening age being load of fifty six.
There's a bit of stuff in the bit of expenditure
and the health outside of the infrastructure expenditure.
Speaker 4 (28:09):
Yes, I mean the government's announced that.
Speaker 6 (28:10):
I mean that the current rollouts, which is getting down
to fifty eight to start with, is going pretty well.
They reckon that sort of you know, getting feeling fairly close.
But then there's an extra what is it forty five
point five million or so to support the expansion down
from fifty eight through to fifty six that's sort of
coming through that's over sort of the next four years.
(28:32):
Is that there's a bunch of money for just delivering
that program in general, and then also a bit more
money for the infrastructure and the various equipment that they
need for all of those colonoscopies and similar What this
is effectively meaning the government's provided a few more breakdowns
of numbers, more than two hundred thousand additional people will
be become eligible for bow screening, and again the sort
(28:53):
of diagnosis you're talking about, they expect on their modeling
that they will save, you know, five hundred or so
lives over the next twenty five years because of those investments.
So a big thing just trying to get it sort
of vased in over time. And I think it's interesting
looking through how the government's trying to do this that
are clearly they want to achieve it, but they don't
just want to sort of expand the eligibility and then
have huge wait times for people, so they are trying
(29:14):
to sort of manage it through the other one that's
really interesting though, particularly given all of that manage my
health cyber risk earlier this year is there's a bit
more money coming for some upgrades for our health data,
which you know is good.
Speaker 4 (29:28):
That stuff's got to be protected. It's very very personal.
Speaker 6 (29:31):
The government is putting in one hundred and fifty three
odd million dollars into Health end Z for upgrading the
sort of cyber monitoring, getting some better expertise, just basically
making so it's not quite as shonky as it was before,
which I think is a necessary upgrade.
Speaker 5 (29:47):
Berry does This put the Labor Party in kind of
an interesting position here because what they announced they'll do
different or what they would spend, will they have to
then now say what they would cut or or how
much they would borrow a.
Speaker 8 (30:00):
Coveryes it go to be we're awaiting, so they've always said,
and the lead up to this, we're waiting to wait
to see what the budget unveils. In terms of money
in the kitty, Well, no surprise, there's not a lot
of money in the kitty, so there's not a hell
of a lot they can do in terms of big
spending policies.
Speaker 7 (30:20):
But you know, it is election year. I think this.
Speaker 8 (30:23):
Government's resisted, probably against a number of odds of maybe
offering a few tantalizing pieces to going towards the election.
But Labour can't do much more either. It does it's
not being not being terribly honest with the people.
Speaker 5 (30:40):
You'll be surprised here that Chloe has been publicly moaning
about the budget, but she hasn't been hasn't mentioned the
trains or celebrated the trains publicly.
Speaker 2 (30:49):
Yeah, funny, I was wrong.
Speaker 5 (30:51):
I thought they'd be jumping up and down celebrating the trains.
Speaker 3 (30:53):
We're breaking down the budget with Infometrics Chief executive and
principal economist Brad Olsoen and our senior political correspondent Bowry
Soper rights rapid fire for the closing moments.
Speaker 5 (31:04):
Yeah, earlier today I wrote down what I thought that
their budget needed to simultaneously do for New Zealand. So
I'll throw some questions back and forth.
Speaker 2 (31:11):
Barry.
Speaker 5 (31:11):
Does it slow debt growth?
Speaker 8 (31:13):
No, it slows it a bit, but not appreciably, so
they've still got to borrow, Brad.
Speaker 5 (31:18):
Does it keep borrowing markets comfortable?
Speaker 6 (31:22):
Comfortable enough for the moment? And again, like Barry said,
it's down a bit, but it's not down enough.
Speaker 5 (31:26):
Yet, Barry. Does it maintain public services?
Speaker 8 (31:30):
Yes, except for some of the public services in terms
of those that.
Speaker 7 (31:34):
Are being all about to be merged.
Speaker 8 (31:36):
And we saw the Environment Ministry yesterday's scrap, so I
expect more of that, Brad.
Speaker 5 (31:40):
Does it stimulate growth.
Speaker 6 (31:43):
It does a little bit in the short term with
that infrastructure, but sort of further out you go, the
less important the government becomes in the economy, and that's
probably a good thing.
Speaker 5 (31:52):
Barry. Does it invest in infrastructure? It does in some
doesn't it It.
Speaker 8 (31:55):
Does and we expected a fairly significant capital spend and
that's what this government is delivered in that. But you know,
capital spends on infrastructure do not win elections.
Speaker 5 (32:07):
And what about the recessionary pressure, Brad? Is anything to
avoid recessionary pressure.
Speaker 6 (32:14):
Sort of limited from the government in the short term,
But I think you've got better conditions shown through longer term.
Speaker 4 (32:20):
So that's where the government will be looking at. Is
that that future piece?
Speaker 5 (32:23):
And finally, Barry, is it going to win them the election?
Speaker 8 (32:28):
Well that's more than a sixty four thousand dollars question,
a lot more money than that here, But look, I
don't think this will win or lose a government an election.
It's to me, like Nichola will have said. And the
opening words of her speech is that it's a responsible budget.
Speaker 3 (32:47):
And just finally for both of you. Actually, so if
you had to give this budget a score out of ten, barrye.
Speaker 2 (32:54):
What would you go for?
Speaker 7 (32:55):
I'd give it about a seven?
Speaker 2 (32:56):
Okay, seven is not bad? And bread yeah.
Speaker 4 (32:58):
Seven point five?
Speaker 2 (33:00):
Oh you're a brag you are, Brad, I had to go.
Speaker 5 (33:04):
You want to go eight? Can we get an eight
from Barry?
Speaker 4 (33:07):
Oh?
Speaker 8 (33:07):
Seven point super part?
Speaker 2 (33:09):
Okay, there we go very good.
Speaker 4 (33:11):
I'm sticking at super point five.
Speaker 3 (33:12):
Yeah, good man, good man, Hey, thank you very much
for coming into both of you really great to catch
up and appreciate your expertise.
Speaker 2 (33:19):
Pleasure that is. Yeah, thank you very much.
Speaker 3 (33:22):
That is Barry Soper, Senior political correspondent, Informetrics Chief executive
and principal economists Brad Olsen.
Speaker 1 (33:28):
For more from News Talks B listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on iHeartRadio
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Speaker 2 (00:16):
A very good afternoon, cheer, Welcome in.
Speaker 3 (00:19):
It is seven past two and the budget has been
revealed for twenty twenty six. Exciting, exciting, So here's a
couple of top lines for you. Joining us very shortly
as Brad olsoon at a couple of top lines. There
are no specific cost of living payments in this budget
or sugar hits, as Finance Minister and Niicola Willis did indicate,
but there is certainly a few surprises in there. Box
(00:41):
are set to return to surplus earlier than expected. The
budget is supporting record health funding of thirty four on
z point two billion dollars, and there is some changes
to bol Kanser screenings as well as investment in education
trades and a lot more to breakdown over the next hour.
To help us do that, we are joined right now
by Inframetrics chief executive and principal economist Brad Olson, who's
(01:03):
been in the lockup and is just out.
Speaker 4 (01:05):
Brad, afternoon to you, Hello, team, how's it going very good?
Speaker 5 (01:09):
Thanks now, Brad, I've just written some potential names for
the budget. So as I go through, just say yes
or no. If they count the bread and butter budget, Yeah, yeah,
maybe the brutal bureaucrat bashing budget.
Speaker 4 (01:23):
Oh it's a bit too harsh.
Speaker 5 (01:25):
Okay, that's what about the tough love budget. Yeah, that's
more on the no solutions just trade Off's budget, a
bit long, the stash the cash budget.
Speaker 6 (01:38):
Yeah, getting there, okay, okay, all right, see this is
why you get paid the big Bucks brand.
Speaker 2 (01:43):
You've got a critical little guys.
Speaker 6 (01:44):
I've called it the little Bee budget. Yeah, there's no big,
one massive thing usually having a budget that's you know,
the centerpieces everyone's talking about. There's lots of little things,
very little for an individual household, but lots of other
structural changes. I think the government's trying to fund. So
an unusual budget, a little bit for election, yet certainly
no sugar hits.
Speaker 2 (02:03):
Yeah, so the little Bee budget. All right, that's a
good name.
Speaker 3 (02:06):
So let's kick into the surplus now that is expected
to be a little bit earlier, from twenty twenty nine
to twenty thirty, depending on how the measure is used,
of course, Brad, how significant was that in terms of
what Nikola Willis had to do to try and get
that surplus a little bit earlier than expected.
Speaker 6 (02:22):
Well, there's been a huge amount of heavy lifting to
get that suitflus back on the cards over the next
sort of five or six years. The Treasury is now
expecting an extra ten point eight billion dollars worth of
revenue taxes collected and similar compared to what they would
have thought back in December, so a huge amount more
on the revenue front. On the spending side, the government's
had to be very very limited. They've got to fund
(02:44):
a huge amount more healthcare, they've got to fund more
in the way of superannuation. But through all of that,
they're only spending a net seven hundred and seventy million
dollars more over that forecast period. So they've had to
find a lot of savings, a lot of cutbacks in
other areas to pay for it. Now Treasury has also
said this return to surplus in twenty nine or thirty,
depending on the measure. They're putting sort of a fifty
(03:07):
to sixty percent chance on things. There's a lot of
volatility out there. No one's particularly certain about what economic
conditions will be like even in the next six minutes
rather than next sort of you know, six years, so
big question marks still, but yes, a big change coming
because the government has been trying to get to this
position for a while.
Speaker 3 (03:24):
Were there any indications on where extra savings came from
within this a budget? Rather, we've already been told that
it's going to come through some cutbacks in the public service,
obviously the removal of that funding for the fees free
last year. Were there any other cuts that were revealed
in this budget?
Speaker 6 (03:42):
Those were most of them coming through one of the
other switch arounds though that you did see, and probably
the biggest sort of single piece of the budget, although
it's still not worth a huge amount, was some extra
funding that the government is bringing through from adding a
prudential levy basically a bank tax on the bank so
that they have to pay for their own regulation. So
like when we look through some of the figures, that
(04:02):
did seem to be an area where there was a
little bit more revenue showing through from this bank levy,
a bit more as well from fuel excise charges at duties,
your road user charges going up in the.
Speaker 4 (04:12):
Future, so some of it.
Speaker 6 (04:14):
A lot of this in my mind is user pays,
so it's not so much that. I mean, government's found
a lot of savings. Yes, they've also tried to change
this revenue piece around. I think though that there is
a much greater focus on user pays so instead of
just general taxes paying for stuff, if you're using a service,
if you're getting a benefit, you're paying for it a
whole lot more as well.
Speaker 5 (04:32):
So how do we do we know how that Levey
is going to work on the banks?
Speaker 6 (04:35):
Well, the idea is that they'll pay something. I suspect
it will probably be some sort of proportion you know,
of profits or something. It's expected to raise two hundred
and nine million dollars over the next.
Speaker 4 (04:47):
Four years, so it's not huge.
Speaker 6 (04:48):
Let's be clear, it's just over fifty million year, and
it'll be paid through to the Reserve Bank because you know,
one of the regulators are there, and then the Reserve
Bank will then effectively pass that money back through for
central government through an increased dividend. Now, what was very
interesting though, is that, like, let's be clear, two hundred
and nine million is a huge amount of money for
you were right from a government point of view, it's
(05:10):
pretty limited. But during the press conference with the Finance minister.
She made it pretty clear that there was much stronger
talk of an even bigger levy, but she couldn't get
it across the line with cabinets. So it's not clear
if that was Act or New Zealand First who was
trying to hold things back, but there was clearly more
on the cards, but they just couldn't get it through.
Speaker 5 (05:28):
What growth is forecast for this to be pulled off?
And is that realistic do you think, brad Well?
Speaker 6 (05:35):
I mean, there's a bit more coming forward in the
short term, it's going to of course be a whole
lot more challenging. You know that this Iran war situation
is definitely going to sort of crimp matters going forward.
But if you look at that sort of growth heading
into the future, two point sorry, three point one percent
GENDP growth being inspected out in twenty twenty seven and
(05:56):
then sort of remaining at that level in twenty twenty eight,
so you know, that'd be the fastest in a couple
of years. Probably the big one as well. It's certainly
something the government's been focusing on is the fact that
employment growth is expected to sort of head above two
percent from twenty twenty seven for a couple of years,
so that growth in people getting jobs and seeing wages generally,
(06:16):
but also even wages on an inflation adjusted basis rising.
But you know, clearly there's a focus at the moment
on trying to get that growth as you're going, and
that higher economic growth is where you get that sort
of higher revenue for government if you know there's better
economic activity. There's clearly more profits from businesses, there's more
spending by households, there's more people in work paying income tax,
(06:37):
so all of that growth sort of adding to the
tax base over time.
Speaker 4 (06:40):
So a real reversal.
Speaker 6 (06:41):
You'll probably remember a couple of years ago we seem
to just kick downgrading the government finances because times were
tough and all these difficulties were showing through. I feel
like we're now moving back to potentially having overdone how
bad things might get. We're now starting to look a
bit more optimistic, maybe over optimistic, but certainly looking greener.
Speaker 5 (07:00):
Oh that feels good. Can you explain to me why
ACC isn't being factored into reaching the service the siplus.
Speaker 6 (07:08):
Well effectively to make the numbers look a little bit better.
It would be the easiest way to say, I mean
a couple of years ago, the government came out We've
always used this thing called the obergal, the operating.
Speaker 4 (07:19):
Balance before gains and losses.
Speaker 6 (07:21):
Which tries to give us an idea of effectively when
it comes to sort of day to day spending, is
government spending more or less than its earning and obergaill
X is excluding the acc And that was because at
the time, acc didn't look like it was going to
be able to pay for it south sort of in
the short term.
Speaker 4 (07:37):
Over the long term it would.
Speaker 6 (07:38):
Fund it, but it was paying out more and more
for all of those injuries and accidents than it was
making back in terms of investment returns. So the government
decided to strip it out of the surplus figures to
try and give a They would call it a clearer
read of things, because acc should be self paying over time,
but maybe not in any one given year.
Speaker 4 (07:57):
You can sort of choose.
Speaker 6 (07:58):
I think the biggest one for me is that if
one of the figures, if the obergill X was sort
of looking really good.
Speaker 4 (08:03):
But your normal the og obergal wasn't, you'd.
Speaker 6 (08:07):
Been asking some They're both moving in the same direction,
though it's just a bit of a timing difference depending
on exactly which year you want to choose.
Speaker 2 (08:14):
That is good news, Brad.
Speaker 3 (08:15):
We're going to take a quick break, but when we
come back, let's dig into infrastructure. There's been a sizeable
boost in infrastructure spending, so we'll get to that next.
It is a quarter pass to if you've got a question.
By all means, nine two ninety two is the text number.
We are breaking down budget twenty twenty six and joining
us is in for Metrics Chief executive and principal economists
Brad Olson. Brad, let's break down the boost to rail.
(08:39):
Winston Peters is going to be very happy with this
amount of money going into rail over the next four years.
Speaker 6 (08:44):
Willy, what I mean the government's given one point zero
seven five billion. I hope that needs for points seventy
five billion is important, ah.
Speaker 4 (08:53):
An investment.
Speaker 6 (08:53):
I mean to be fair, that's over just four years,
so that's like two hundred and fifty milie Yeah, plus
some additional moneys. It's going into keeping our metrorail systems
going forward.
Speaker 4 (09:04):
I mean, look, there's clearly been.
Speaker 6 (09:05):
A lot of focus on rail over time as well
that you know, with the fuel crisis going on at
the moment, that keeping the traps going is an expensive issue,
so the more that we can think about that sort
of rail investment is important.
Speaker 4 (09:19):
A lot of this is sort of I'm not going
to say bau.
Speaker 6 (09:21):
It's just a continuation of further levels of investment you've
seen the last couple of years. You know, there's focuses
around trying to sort of, you know, put the right
investments in for the right tracks as well as you know,
having the right rail cars and all of that. I mean,
it's one of those things Winston Peters will be very happy.
It's probably one of those things. We almost hope that
(09:43):
the average ki we doesn't see that effect only because
stuff should just move through the night or you know,
not have as many traps on the roadways.
Speaker 5 (09:51):
Is this renewal or is this building new infrastructure in rail?
Speaker 4 (09:58):
There's elements of both looking through it.
Speaker 6 (10:00):
The government hasn't provided sort of heaps of detail because
it's sort of funding the investment program, but it does
look like there's sort of elements of I guess it
looks like more upgrades of some of the core stuff
that was already looking to go on. You know, they'll
put new tracks and sleepers and ballast and they need
to do some slope remediation and you know, effectively after
all this awful rain we seem to have had through
(10:22):
the first half a year and previously there's a number
of sort of sites. They're still operational, but clearly they
need a bit more resilience added in. They're also trying
to get through some of the backlog that they've created
over time on the rail front. I think one of
the big changes is that you've seen sort of a
bit of a funding shift over time, so there's actually
a bit more money coming from rail itself. You know,
it's a bit more commercially competitive now to use rail
(10:44):
and it's funding itself. So a bunch of renewals, a
bunch of new investment and getting stuff up to scratch
as well.
Speaker 5 (10:50):
And is it metropolitan or into city sort of rail situation.
Speaker 6 (10:56):
Some of it's going to be that sort of intercity
and more I guess around freight. But there are specific
investments and some of the backlogs of renewals across both
Auckland and Wellington's metro network. So you know they're trying
to get effectively that service reliable up and I mean,
you guys see this in Auckland ride. Every time that
something breaks down on the rail tracks, it brings everyone
to a literal standstill. Down here in Wellington we have
(11:16):
the same thing. No one wants to go and sit
on a bus when you thought you were taking a
nice fast train. So I think it's probably one of
those things. It's not like you'll necessarily see huge amounts
of new, shiny stuff.
Speaker 4 (11:26):
It's just trying to get the.
Speaker 6 (11:27):
Damn things working more consistently instead of the sort of
stop start progress we might have had before.
Speaker 3 (11:32):
That'll be music to the heads of a lot of
auckland Does and Walentonians for that matter.
Speaker 5 (11:36):
So Winston Peters says, New Zealand have invested sweat, blood
and tears to build the national rail network, but previous
governments led it rot. So is it safe to say
that that Winston has pushed hard on this one and
maybe the government it's not really the government's dream project,
the national government's.
Speaker 6 (11:56):
I think you've probably got a balance right. Yes, Winston
Peters has got a fair amount for rail. There's a
lot of other stuff too that the rest of government
will be happy with. Seven billion dollars total in terms
of an additional boost to capital spending, and I think
this is where you probably see it play out a
lot more across sort of government priorities. You've seen, you know,
a lot that's gone into other parts of the transport network.
(12:17):
So the government is specifically funding one point seven odd
billion for an extension to the Wycato Expressway between Cambridge
and Prairie. So that's been talked about for a while,
it's ready to go. It's got a good return, you know,
for every dollar invested, it should bring back sort of
nearly three dollars coming through.
Speaker 4 (12:35):
So that's important.
Speaker 6 (12:36):
And the other big one, especially again after all this
wild weather, is there's an extra four hundred million being
allocated for state highway resilience projects. So you know the
fact that the ywe could gorge through the Gisbane has
been out of commission, State Highway three Gorge, the Alaquino
Gorge through to New Plymouth. There's you know, State Higway
twenty five around Crominal. There's a huge number of these
things where every time we have some world where the
(12:58):
our communities get cut off.
Speaker 4 (13:00):
So that's important. The big one for me in the
real focus.
Speaker 6 (13:03):
I don't have any numbers because it's all commercially sensitive,
but government have committed to a new one hundred and
fifty eight bed tower block up in fanged A Hospital.
They are putting more money into getting new hospital developments
or redevelopments for Totong, Hawk's Bay and Parniston North hospitals.
There's more coming through for you know, schools and simmer
(13:24):
in Queenstown. So I think you're seeing a much greater
focus on some of that social infrastructure alongside resilience of
what our transport networks.
Speaker 2 (13:31):
Need, and just on hospitals as well.
Speaker 3 (13:33):
Brad, there is budget for a new hospital in South Auckland.
Speaker 6 (13:39):
Yeah, so they're looking to acquire some land down in
the south of Auckland. Again very sort of hush hush
as to exactly what it will what it will cost,
and where exactly it will be. But look, the focus
I think near as you're seeing that population growth continue
over time in South Auckland.
Speaker 4 (13:55):
There's a clear need for it.
Speaker 6 (13:57):
And again we know that you know that the more
money that goes into to how often you sort of
see that return if you can get people moving through
the house system quicker and more efficiently, so instead of
having to sort of have people that are moving out
or having to go to existing hospitals. This focus is
very much on those growing populations, not only in South
Auckland but also that sort of northern White Cuttle area.
(14:20):
It's a big sort of growth node for the country,
which is great, but if you don't have the services,
you create bottlenecks in other areas. So yeah, the big
thing here right, it's not going to be built tomorrow,
but by getting the land ahead of time before it
gets even more expensive, means that the sort of plan
is in motion to build that sooner rather than later.
Speaker 5 (14:36):
And a one hundred and fifty eight bed war to
tower at Funga A's Hospital. Was this something that was
muted in advance.
Speaker 6 (14:44):
Well, we've talked. I mean we've talked about it for
a long time. My hometown is fun today and I
can tell you having been, you know, having to visit
family members in the hospital when one of the windows
literally just fell out of it's fixing and fell to
the ground. I mean the place is not a bit
old and busted. That's pretty old inmbusted that there needs.
Speaker 4 (15:00):
A bit more work.
Speaker 6 (15:01):
And again the north is growing and fung Day based
hospital is a big part of you know, the health
infrastructure of North and so yeah, it was a little
bit foreshadoed. You've seen a bit of that in terms
of more money for the road for or courthouse. There's
a few more police stations as well being built. One
in the West Coast, I think a bit of remediation
in the Greymouth police station I think it was so yeah, Look,
(15:21):
there is a big focus on trying to get some
of that sort of social structure going so that we've
got the right services around the country.
Speaker 5 (15:27):
And also looking at a temporary ICU at Palmston North
Hospital and a fit out of an impatient unit at
Total Hospital. So quite a bit of health stuff in there.
Speaker 2 (15:36):
Yeah, that's going to be very popular.
Speaker 3 (15:37):
You would say, Brad, there's a Texas come through and
there's a few in this regard as well, but here's
the one I've picked out. Get a guys and brads.
Is there anything special for small business? Do they still
have tax and centers for purchasing new capital etc. That's
from Shane.
Speaker 4 (15:55):
Yeah.
Speaker 6 (15:55):
Look, the investment boosts from last budget, it hasn't gone anywhere.
It's still there, so you can sort of write stuff
off a little bit quicker with that effective advanced appreciation.
There's other sort of a few other changes coming through
as well that helpful. Again, probably nothing major for a
lot of businesses they're.
Speaker 5 (16:16):
Or might it just last you, Brad, I think we
lost about fifteen We lost about twenty seconds of what
you were saying.
Speaker 4 (16:22):
So if you can jump the best stuff, you sounded.
Speaker 5 (16:26):
Like you're about to lean into something really good and
then you just appear it disappeared, So we've got to
hear it.
Speaker 4 (16:30):
Sorry about that.
Speaker 6 (16:32):
What we have seen in this budget, alongside investment boost
from last budget continuing is a bit more of a
sort of simplification and some easing in the research and
development text credit. Probably not necessarily focused as much on
real small businesses given that they've reduced the non administrative
internal software cap from twenty five to three mil, but
(16:54):
basically what they're trying to do is get people investing
a bit more in software and technology. That's good. Also
a bit of a shift in the fringe benefit tax
around how much admin you might have to do as
a small business owner around using your own private vehicle.
So there's some useful things in there. Probably the big
one though, that's coming through potentially for sort of investment
and people thinking about their investments overseas. Is the fact
(17:16):
that the sort of overseas investment taxes that the threshold
used to be that you had to pay tax if
you had any holdings over fifty k, that's being doubled
to one hundred k.
Speaker 4 (17:26):
So a whole lot of.
Speaker 6 (17:27):
Small investors are probably going to have slightly easier tax
treatment the next year or two.
Speaker 5 (17:31):
Right, So that's sort of the chass type people.
Speaker 6 (17:35):
Yeah, yeah, that's exactly exactly right. So just a bit
easier to sort of do some of the ADMIN. I mean,
that's sort of a centerpiece of this budget. Is nothing
too big and flashy. You're not getting anything really on
that investment side being taken away from last year, so
that continues in as good. But just trying to make
the ADMIN burden a bit easier for small business at
the moment.
Speaker 2 (17:52):
Makes a lot of sense.
Speaker 3 (17:53):
And there's a lot of teachts coming through about anythink
in regards to the price of fuel and the government
is going to be setting aside a fair chunk of funding.
Speaker 2 (18:00):
Tell us about that.
Speaker 6 (18:02):
Yeah, So the government has set aside four hundred and
fifty million dollars in a reserve for additional temporary and
targeted support if conditions worsen on the fuel front. Now,
let's be clear, I don't think that's going to mean
that there's any funding for making fuel cheaper. It's just
more that, look, if things kick off again the Middle East,
if there's major concerns again around you know, certain groups
(18:24):
who are going to be facing those higher, higher prices,
Government's got a left itself a little bit of a
kitting to provide some support. One though that again government's
talking a lot about at the moment, and we're still
trying to get a bit of clarity on is At
the minute. Government has legislated increases to your fuel excise
duty and your road user charges from the first of
January next year. The Finance Minister made it very clear
(18:47):
at the press conference today that if fuel prices were
where they are today, she will not be doing that,
which I thought was a pretty big call, because if
they don't increase those fuel excise duties and similar it's
three hundred million dollars every six months they've got to
find to keep funding all of our road infrastructure, hotholes,
all that sort of stuff. Though effectively, I think what
(19:07):
you're seeing is maybe not any relief at the pump
directly from government, but they are sort of very much
looking at how much it might cost them to not
increase things even further if fuel prices stay where they are.
Speaker 5 (19:18):
To tell you, a lot of people are texting through
Brad and they're from the South Island saying, after listening
to Brad, is there anything for the South Island? This
person says, come on, guys, the North Island gets the
treats from one end to the other and South Island
gets nothing, not even a police station in Greymouth, great
another hospital in South Orpelnd, while Central Otago generates the
GSD clip to pay for it and yet again fails
(19:41):
to get a hospital or expanded services. So this so far,
what we're getting on the text machine is the South
Island feeling neglected.
Speaker 2 (19:49):
Is not heavy?
Speaker 5 (19:50):
Is that a fair?
Speaker 4 (19:51):
No, that's that's potentially fair.
Speaker 6 (19:53):
Although there was some time that you should seem I
set up at the moment, I've got papers.
Speaker 4 (19:57):
Glor every week one.
Speaker 6 (19:59):
So everywhere there was a there was a big investment
for health infrastructure coming through in Central Ittaga that was
announced I think a couple of a week or so back.
I'm just trying desperately to find the right part of it,
because look, you're right, I mean especially right with population
growth showing through around the likes of Central Otago, Queenstown,
(20:20):
but also you know through parts of Greater Canterbury there's
a lot that's been happening there as well. I cannot
find it for the life for me in front of me,
but I do know there was funding that was coming
through full health infrastructure in that area. So part of it,
I think is also that you know that that announcement
came out pre budget because of how much focus there
has been in recent times.
Speaker 4 (20:39):
But you go through queen ctenter. Someone send to me
the other day.
Speaker 6 (20:41):
If they don't put investments into Queenstown transport in the
near term, you know there'll be congestioned in fifteen years.
I don't think the guy's ever been there. Queenstown is
congested enough. Pressure is very random.
Speaker 3 (20:52):
Yeah, absolutely, they are breaking down Nikola Willis's twenty twenty
six a budget and we are joined by Informetric's chief
executive and principal economists Brad Olson. So Brad, let's have
a chat about this particular announcement within the budget. It's
very interesting donation rules are going to be changing quite significantly.
Speaker 6 (21:11):
Yeah, so the government's are now so at the moment, right,
you can get a tax credit if you go and donate,
and at the moment that's effectively uncapped. And so the
government is now going to make it so that you
are kept at donating one.
Speaker 4 (21:23):
Hundred thousand dollars a year.
Speaker 6 (21:25):
I mean again, my current donation scheme is not quite
that high.
Speaker 4 (21:29):
And so you can only get the tax cuted up
to one hundred k. Though.
Speaker 6 (21:32):
What's really interesting is why this is happening, and it's
because there are some people out there to effectively donate
every year to their own charitable enterprise business, you know,
we charitable service. They do so much that it all
becomes a very big text writer for them. So they
can sort of, you know, they can move it from
their personal money or business money through to.
Speaker 4 (21:53):
The charitable arm and then do a bunch of charitable stuff.
Speaker 6 (21:55):
That's all good and well, but it's sort of not
designed that you know, you can do that. It's more
so that you and me, when we go and donate,
there's a reason to. And so the government's sort of
said that's their focus. They are going to sort of
provide that support, particularly around sort of nonprofit organization. So
they want to enable, yes, people to still do it,
but not for people to sort of wrought it too much.
Speaker 2 (22:15):
Yeah, very good.
Speaker 3 (22:16):
Right, it's time to welcome in new stalks there b
s INIR political correspondent Barry Soaper, Barry, thank you very
much for joining us.
Speaker 7 (22:23):
Good afternoon, gentlemen.
Speaker 5 (22:24):
So Brad, he's called it the little bee budget.
Speaker 8 (22:27):
You've got a name for it, Barry, Well, I call
it the bread and margarine budget, with the butter belonging
to Winston Peters, because.
Speaker 7 (22:36):
He's wallowing in the vat now.
Speaker 8 (22:38):
Because if her name's Winston Peters and you're in charge
of the ministry, your ministry is pretty.
Speaker 7 (22:44):
Well looked after him.
Speaker 8 (22:45):
And you look at foreign affairs for example, And I
remember a time, and Brad, you'll remember this when Winston
I think he got half a billion dollars for foreign
affairs out of one of the budgets. And now, of
course he's got more money one hundred and forty five
million dollars for diplomatic the diplomatic network overseas.
Speaker 7 (23:05):
He's got more for the.
Speaker 8 (23:06):
Pacific twenty million bucks for the Pacific Islands. Forum here
next year, which he's got to get anyway. But then
the big one, and this is capital expenditure, and that's
where you know a lot of not surprised, but big
money went and it was expected to and just over
a billion dollars has been committed to Kiwi Rowl's plan
(23:27):
network to be implemented next year between next year in
twenty thirty. The other thing about this budget is that
Nikola Willis has kept an eye on those credit rating
agencies because they are very important. And that's why the
surplus that she is announced today is extraordinarily important because
the rating agencies look at that, look at the intent
(23:51):
of this government. Not a big social spend here, which
I think is the way it should be given the
tight physical circumstances that we're facing. But I think you look,
it's bread margarine because there's really not a lot there
for the social s. But for Winston Peters it's certainly better.
Speaker 5 (24:11):
So what about the other coalition partner if they don't
have to make agg happy.
Speaker 8 (24:15):
Well, not as much as are Winston Peters. And we
know that Winston is a pretty hard bargainer, and you
know he there's aspects of it there that Act will
be happy with and you know, I don't think they
will come away unhappy. The factor is that the coalition
partners all appearing together this week out at the budget
(24:39):
printing press was important because normally it's just the Finance
Minst goes there, but so clearly all the parties are
signed up to it.
Speaker 7 (24:49):
Yeah.
Speaker 5 (24:49):
Well, David Seymour said his fingers were all over it
to me at one point, so yeah.
Speaker 7 (24:52):
They would be claiming all the good bits, I'm sure.
Speaker 5 (24:54):
So is this a win for the government politically? Does
it help their reelection chances? Do you think, Barry?
Speaker 8 (24:58):
Well, look the thing that wins elections and Muldoon said this,
dere I say it way back, he said, put more
money in the voter's hit pockets and you'll win the
treasury benches.
Speaker 7 (25:12):
Well, there's not a lot of.
Speaker 8 (25:13):
More money going in the hip pockets out of this budget,
and neither there should be because there are so many
unknowns now between now and the election.
Speaker 7 (25:24):
We don't know what the hell is going on with
the war in Iran.
Speaker 8 (25:27):
That could get worse. And I see there's been a
bit of a flare up in the straits of Hall
Miss today. So you know who knows, and this is
a government I think bringing out a fiscal document that
really it has to look over its shoulder all the
time because it can't be absolute about the figures that
it's talking about today.
Speaker 2 (25:48):
Brad, would you concur with that?
Speaker 3 (25:49):
What are the optics of this budget when it comes
to the public perception and the election ahead?
Speaker 4 (25:55):
Yeah, I mean, look, I think a smart policy move.
Speaker 6 (25:58):
There's a lot of good things coming through in this budget,
sort of bitsy pieces across the board. It's not great
probably from a retail politic point of view, because hows
won't probably notice a whole lot of themselves. But I
think look equally, I feel like people are probably okay
with it.
Speaker 4 (26:15):
They realize you.
Speaker 6 (26:15):
Can't just keep spending money hand over fist, you know,
and expect it to be magiced out of thin air.
So that level of consolidation that the biggest bit, I
think is the focus that government's had on. Look, we're
not going to give money back to households directly, that
that is challenging for people, but we are going to
make sure that we're more resilient. There's more money going
into defense, there's more money going into infrastructure, so that
when bad times hit and they will. We're sort of
(26:38):
a little bit easier to go through it rather than
sort of being going through.
Speaker 4 (26:41):
The world all the time.
Speaker 3 (26:42):
We are breaking down the budget twenty twenty six and
we are joined by Brad Olsen and BARRYE.
Speaker 2 (26:47):
Soper.
Speaker 5 (26:48):
Now, Barry, what will Labor the Greens push back on?
The Greens will be celebrating the rail investment, surely they'll
be jumping up and down and affording that. But what
will they push back on.
Speaker 8 (26:57):
They should be popping the Fijoa fizzy corks tonight, because
you know, the rail thing is very good. The Greens
have banged on about a bit of rail network. Well,
certainly the money has been put aside for that in
the spend outside of the social spend.
Speaker 7 (27:16):
So that's not a bad thing.
Speaker 8 (27:18):
The Labor Party will they will certainly knock the fact
that there's not the spend on those who are struggling
to make ends meet. I mean, there is stuff in there,
but it's not going to impact them the way that
the Labor Party would have hoped should have been impacted.
But you know, you're always going to get winges and
(27:39):
when you're putting out a budget at this time of
severe fiscal restraint. I think they shouldn't have too much
to complain about it in this government in the way
that Nikola Willis and the other two coalition partners have
sat down and come to a pretty good agreement on this.
Speaker 5 (27:59):
Brad the bell screening age being load of fifty six.
There's a bit of stuff in the bit of expenditure
and the health outside of the infrastructure expenditure.
Speaker 4 (28:09):
Yes, I mean the government's announced that.
Speaker 6 (28:10):
I mean that the current rollouts, which is getting down
to fifty eight to start with, is going pretty well.
They reckon that sort of you know, getting feeling fairly close.
But then there's an extra what is it forty five
point five million or so to support the expansion down
from fifty eight through to fifty six that's sort of
coming through that's over sort of the next four years.
(28:32):
Is that there's a bunch of money for just delivering
that program in general, and then also a bit more
money for the infrastructure and the various equipment that they
need for all of those colonoscopies and similar What this
is effectively meaning the government's provided a few more breakdowns
of numbers, more than two hundred thousand additional people will
be become eligible for bow screening, and again the sort
(28:53):
of diagnosis you're talking about, they expect on their modeling
that they will save, you know, five hundred or so
lives over the next twenty five years because of those investments.
So a big thing just trying to get it sort
of vased in over time. And I think it's interesting
looking through how the government's trying to do this that
are clearly they want to achieve it, but they don't
just want to sort of expand the eligibility and then
have huge wait times for people, so they are trying
(29:14):
to sort of manage it through the other one that's
really interesting though, particularly given all of that manage my
health cyber risk earlier this year is there's a bit
more money coming for some upgrades for our health data,
which you know is good.
Speaker 4 (29:28):
That stuff's got to be protected. It's very very personal.
Speaker 6 (29:31):
The government is putting in one hundred and fifty three
odd million dollars into Health end Z for upgrading the
sort of cyber monitoring, getting some better expertise, just basically
making so it's not quite as shonky as it was before,
which I think is a necessary upgrade.
Speaker 5 (29:47):
Berry does This put the Labor Party in kind of
an interesting position here because what they announced they'll do
different or what they would spend, will they have to
then now say what they would cut or or how
much they would borrow a.
Speaker 8 (30:00):
Coveryes it go to be we're awaiting, so they've always said,
and the lead up to this, we're waiting to wait
to see what the budget unveils. In terms of money
in the kitty, Well, no surprise, there's not a lot
of money in the kitty, so there's not a hell
of a lot they can do in terms of big
spending policies.
Speaker 7 (30:20):
But you know, it is election year. I think this.
Speaker 8 (30:23):
Government's resisted, probably against a number of odds of maybe
offering a few tantalizing pieces to going towards the election.
But Labour can't do much more either. It does it's
not being not being terribly honest with the people.
Speaker 5 (30:40):
You'll be surprised here that Chloe has been publicly moaning
about the budget, but she hasn't been hasn't mentioned the
trains or celebrated the trains publicly.
Speaker 2 (30:49):
Yeah, funny, I was wrong.
Speaker 5 (30:51):
I thought they'd be jumping up and down celebrating the trains.
Speaker 3 (30:53):
We're breaking down the budget with Infometrics Chief executive and
principal economist Brad Olsoen and our senior political correspondent Bowry
Soper rights rapid fire for the closing moments.
Speaker 5 (31:04):
Yeah, earlier today I wrote down what I thought that
their budget needed to simultaneously do for New Zealand. So
I'll throw some questions back and forth.
Speaker 2 (31:11):
Barry.
Speaker 5 (31:11):
Does it slow debt growth?
Speaker 8 (31:13):
No, it slows it a bit, but not appreciably, so
they've still got to borrow, Brad.
Speaker 5 (31:18):
Does it keep borrowing markets comfortable?
Speaker 6 (31:22):
Comfortable enough for the moment? And again, like Barry said,
it's down a bit, but it's not down enough.
Speaker 5 (31:26):
Yet, Barry. Does it maintain public services?
Speaker 8 (31:30):
Yes, except for some of the public services in terms
of those that.
Speaker 7 (31:34):
Are being all about to be merged.
Speaker 8 (31:36):
And we saw the Environment Ministry yesterday's scrap, so I
expect more of that, Brad.
Speaker 5 (31:40):
Does it stimulate growth.
Speaker 6 (31:43):
It does a little bit in the short term with
that infrastructure, but sort of further out you go, the
less important the government becomes in the economy, and that's
probably a good thing.
Speaker 5 (31:52):
Barry. Does it invest in infrastructure? It does in some
doesn't it It.
Speaker 8 (31:55):
Does and we expected a fairly significant capital spend and
that's what this government is delivered in that. But you know,
capital spends on infrastructure do not win elections.
Speaker 5 (32:07):
And what about the recessionary pressure, Brad? Is anything to
avoid recessionary pressure.
Speaker 6 (32:14):
Sort of limited from the government in the short term,
But I think you've got better conditions shown through longer term.
Speaker 4 (32:20):
So that's where the government will be looking at. Is
that that future piece?
Speaker 5 (32:23):
And finally, Barry, is it going to win them the election?
Speaker 8 (32:28):
Well that's more than a sixty four thousand dollars question,
a lot more money than that here, But look, I
don't think this will win or lose a government an election.
It's to me, like Nichola will have said. And the
opening words of her speech is that it's a responsible budget.
Speaker 3 (32:47):
And just finally for both of you. Actually, so if
you had to give this budget a score out of ten, barrye.
Speaker 2 (32:54):
What would you go for?
Speaker 7 (32:55):
I'd give it about a seven?
Speaker 2 (32:56):
Okay, seven is not bad? And bread yeah.
Speaker 4 (32:58):
Seven point five?
Speaker 2 (33:00):
Oh you're a brag you are, Brad, I had to go.
Speaker 5 (33:04):
You want to go eight? Can we get an eight
from Barry?
Speaker 4 (33:07):
Oh?
Speaker 8 (33:07):
Seven point super part?
Speaker 2 (33:09):
Okay, there we go very good.
Speaker 4 (33:11):
I'm sticking at super point five.
Speaker 3 (33:12):
Yeah, good man, good man, Hey, thank you very much
for coming into both of you really great to catch
up and appreciate your expertise.
Speaker 2 (33:19):
Pleasure that is. Yeah, thank you very much.
Speaker 3 (33:22):
That is Barry Soper, Senior political correspondent, Informetrics Chief executive
and principal economists Brad Olsen.
Speaker 1 (33:28):
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