May 22, 2025 • 18 mins
The coalition Government has unveiled its second Budget.
Over 20 billion dollars in savings has been found over the next four years, more than half from controversial changes to our pay equity scheme.
There are changes to KiwiSaver contributions, means testing for support for parents, and a major new tax incentive for businesses.
Finance Minister Nicola Willis said that it is a “responsible budget”, while Labour has called it an ‘austerity budget’ that leaves women out and is stealing from our kids.
To break down what this all means for you, today on The Front Page, we’re joined by NZ Herald business editor at large, Liam Dann.
Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.
Host: Chelsea Daniels
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Producer: Ethan Sills
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Kiota.
Speaker 2 (00:06):
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald. The Coalition
government has unveiled its second budget. Over twenty billion dollars
in savings has been found over the next four years,
more than half from the controversial changes to our pay
(00:29):
equity scheme. There are changes to key we save a
contributions means testing for support for parents, and a major
new tax incentive for businesses. Finance Minister Nikola Willis has
said that it is a responsible budget, while Labor has
called it an austerity budget that leaves women out and
is stealing from our kids. To break down what all
(00:51):
of this means for you today on the Front Page,
we're joined by Enzit Herald Business Editor at Large Liam
dan So. Nikola Willis has called this a growth budget.
Labour's gone with austerity. If you had to pick a pithy,
one word descriptive of this budget, Liam, what would you
(01:12):
go with?
Speaker 3 (01:12):
Oh, good question, sort of a tightrope balancing act, something
like that. It's a little bit of austerity and a
little bit of growth, some big cuts to some things
and there's a big roll of the dice for example,
in terms of hoping that business is going to really
grab this tax cut and invest for growth. So that's
probably it's probably where they really rolled the dice big
on that one. You know, I was wondering, where's the
(01:33):
growth coming from. They still had growth budget at the
top of all the press releases, but you know, six
six billion, six point four billion over four years. It's
a significant break, especially if you think of a small
business someone who's having to upgrade all their tools and
you know, their transport and all that sort of stuff
every five years or so. To get a twenty percent
break when they do that, it could be quite a
(01:54):
substantial amount of money for them. So it's an incentive
to upgrade all the equipment earlier, you know, and make
themselves more a fit and drive some productivity, which we're
always talking about. So that's the that's the idea. The
theory is that that will mean the businesses will invest
more in up to date technology, latest equipment, and they'll
be more efficient and workers will be more productive and
the economy will benefit because of that.
Speaker 2 (02:16):
The key we saver changes are one of the big
changes here. Hey, taxpayers will now get two hundred and
sixty dollars and seventy two cents from the government, down
from five hundred and twenty one. In return, employees and
employers default contribution will rise to four percent from three percent,
which is being phased in over the next three years.
(02:38):
What sort of impact could that change have.
Speaker 3 (02:41):
Yeah, so the net outcome is that people would save
more over the period of time. I mean the risk
with cutting that tax break is so it's been cut
by half, so you know, it was five hundred dollars
a year. You can say, well, you've lost two hundred
dollars a year, but you compound that over twenty years
and you can do some maths and say that that's
actually potential taking you know, twenty thousand or whatever out
(03:02):
of people's long term retirement savings. But that is more
than compensated for by the increase to the contributions, which
will come out of the employee's pocket and the employer's pocket.
But hopefully, you know, half a percent at a time
won't be too onerous. So sort of a step in
the right direction in terms of lifting those investment rates.
In Australia, they're up to twelve percent or something.
Speaker 1 (03:23):
Well or thirteen now, Yeah.
Speaker 3 (03:25):
And obviously that would sound horrendous to suddenly take an
extra nine or ten percent out of your pay and
for employers to have to pay that. But if you
if you step your way there, gradually you know they've
got four trillion dollars in their superannuation scheme. And we
look across the Tasman and say why are they richer
than us? Well, it's because they've saved the money and
they've got all this money.
Speaker 1 (03:44):
This is not authterity.
Speaker 4 (03:47):
In fact, it is what you do to avoid austerity
because getting the books in shape ensures New Zealand has
financial security and choices into the future. That's right, And
as I am about to set out, savings in this
budget have allowed us to make much needed investments in health, any, education,
(04:14):
law and order and rebuilding our defense force.
Speaker 2 (04:17):
Yeah. Well New Zealanders are notoriously bad savers, and key
we saver for a lot of us is our main investments.
So is this government telling people to pull their bootstraps
up and put some more evident in.
Speaker 3 (04:33):
Yeah, I guess a little bit. You know, it's it's
a bit of that. I mean, there's there's a bit
of that all through this budget. It's definitely to nature,
to any Wellington Business editor said it called it the
true blue budget. It is very much some ideological or
political decisions. They are like no more dolls for the
eighteen to nineteen year olds. Parents have to look after
them or they have to have to go back to study.
(04:54):
If you can't get a job, you've got to be studying,
otherwise you're in the You're still responsibility of their parents
to pay for It was quite a big change.
Speaker 2 (05:01):
If it was short sighted as well, because I mean
going to UNI for some people immediately out of school
that it isn't an option for some people, or in
some people's minds it isn't.
Speaker 3 (05:12):
No I guess you know, there are other things you
could be looking for apprenticeships or looking for more vocational
training and things, but you know they have to make
sure the pathways are there to do that. My concern
would be for some of those communities where unemployment is
endemic and mum and dad are unemployed. But I can
see you know that that true blue bit is that
I guess that from the right wing political perspective, it's
to try and push people to get motivated and go
(05:34):
and look after themselves. But it could be quite a
shock in the short term for some people.
Speaker 2 (05:38):
The investment boost tax is a big one as well.
You mentioned it before. Business is allowed to deduct twenty
percent of the cost of new assets immediately from their
tax will income on top of normal depreciation. Essentially, this
means a lower tax bill and it's believed that over
twenty years this could increase the level of GDP by
one percent and wages by one point five percent. How
(06:01):
big of a deal is this change, given how long
term those benefits are.
Speaker 3 (06:07):
I was just talking with an economist, Christina Long from
enzi Are, and she wasn't that impressed with it, like
in terms of the overall transformative nature of it, But
I think it is. It's sort of a move in
the right direction to try and lift the productivity of
New Zealand. So we have this reputation for being having
a low productivity rate in the country, in this country,
and there are many reasons, but one of the reasons
(06:30):
that it has been identified is that we just don't
invest to the same level in the latest technology, new equipment,
the stuff that makes each worker be able to generate
more output. You know, if you go to Germany then
it's all robotic factories and all that sort of stuff,
and so anything that incentivizes businesses to invest, it should
incentivize them perhaps to take a risk, expand a bit more.
(06:53):
That's what they want, That's what they talk about when
they say going for growth. It will be interesting to
see because the you know, Employees and Manufacturers Association, Business
end Z, they've been lobbying for this for a long time.
They've finally got it. I think businesses will kind of
have to put their money where their mouth is now
and get out there and do it. You'd hope, and
you'd hope that it has some payoff it. It's also
going to be you're going to get that twenty percent
(07:14):
break on your new buying a new forklift anyway, where
you get a twenty percent break on it, that is
kind of a stimulus. So that's where people say this
is an austerity budget or not arguing that that this
is a little bit of stimulus into the economy. So
you know, one point whatever billion a year over four years.
Speaker 2 (07:29):
Well, basically the people who are holding off buying that
forklift now have an incentive to do so more so
than before.
Speaker 3 (07:35):
Yeah, and the true blue bit, the sort of the
right leaning bit is saying, well, the stimulatory part, the
bit where we're putting a bit a bit cash back
into the economy. You could put it in the pockets
of consumers. Consumers might go out and just spend a
little bit, They might drink and eat a little bit more,
which is, you know, maybe good for the short term
health of the economy and hospitality. But if you give
it to the businesses and they invest in the machinery
(07:56):
of the economy the business world, you know, that's positive
long term. That means that they ultimately should be able
to grow bigger, make more money, employ more people. You've
got to believe, I mean, I'm trying to be a
political here. You've got to believe that business and capitalism
is going to do the job for you to back this,
and obviously this government very clearly does.
Speaker 4 (08:26):
So.
Speaker 2 (08:26):
I reckon means testing is one of the themes of
this budget. Hey, government, can we save a Contributions are
now going to stop if you earn one hundred and
eighty thousand dollars a year or more and for the
best start tax credits that will become income tested. So
starting at families on seventy nine thousand dollars a year.
Is that a smart move from the government.
Speaker 3 (08:47):
Well, I mean, some people argue that it's difficult and complex.
You know, you're adding another layer of complexity to have
to means test everything. I guess it seems like a
really a fairly generous bar one hundred and eighty thousand
when you're talking about five hundred dollars or there. You know,
I think if you could afford to top up your
own key, we savior to some extent of it. That's
the case.
Speaker 2 (09:06):
Rich people like getting more money, though.
Speaker 3 (09:09):
Everyone likes getting more money. Yeah, I wonder. I mean,
it's interesting because they might get a bit better at
you know, the machinery of means testing, and you know
where does that lead. Well, maybe you know, they've talked
about whether we should be means testing superannuation, so that
if you're actually still learning while you're getting the retirement pension,
(09:29):
you could be means tested, and that's considered quite difficult
to do. Well, perhaps if for government's some getting better
at means testing because they're doing it for some other things,
it becomes part and parcel of what they do. But yeah,
they means test already for student allowances and things like that.
So I guess. I guess there is mechanisms in place. Yeah,
I mean it's all about plowing back a little bit
(09:50):
of money here and there, isn't it. I mean that's
what the finance ministers had to do. They've clawed back
a large chunk from the pay equity sort of reverse all,
and then they're crawing back bits and pieces everywhere else
to get a few billion here and a few billion there.
Speaker 1 (10:05):
Seventy nine thousand dollars a year for a family. Though
that's quite low, isn't it.
Speaker 5 (10:09):
It is?
Speaker 3 (10:09):
The argument is with a real right when government would
even want that benefit there in the first place. So
they've put a means test in so it's really just
the poorest people I guess that are going to get it.
Speaker 2 (10:19):
So last year's budget was all about putting more money
into our wallets with tax cuts and other savings. Is
there anything in this budget that looks like it will
help ease the cost of living?
Speaker 1 (10:30):
Or have we moved on from that buzz term?
Speaker 2 (10:32):
Now there's support for working for families and supercar holders,
but it doesn't feel like a massive support budget.
Speaker 3 (10:38):
No, this is not a support budget, and I don't
know whether you'd call it austerity or not. It's probably
depends on your political colors, but it's certainly from that
point of view. You know, it was just that tax
break for business, which may be a little bit stimulatory,
but for ordinary consumers there isn't any stimulus and they
don't want to kick start the inflation again. They don't
want to get back growing the economy just by putting
money into it, is what they're saying. Well, that's what
(11:01):
the last government did. We're not doing that. We need
it to come from the ground up, needs to come
from business and export earnings and all that sort of stuff.
So yeah, I don't think we expected much support for people.
I'm sure the government would argue that inflation is more
or less under control. I know right now everyone's panicking
about the price of butter and there's some cheese. Yeah, yeah,
don't forget cheese. But basically, you know, weirdly, when dairy
(11:24):
products are going through the roof like that, that's good
news for New Zealand. I mean, there's money coming into
the countries and economists think that overall inflation will stay
relatively subdued. A few of those key commodity products that
are accepted, you know that are having a bit of
a moment, but the core inflation in the economy because
of higher unemployment wages coming off, it's expected to stay
(11:45):
pretty subdued. So nobody's ever going to say, hey, the
cost of living is great, but it shouldn't be the
same sort of issue that it was. And I don't
think national would ideologically support the kind of just payments
to people to cope with it anyway, because they would
argue that that would just exacerbate the inflation.
Speaker 2 (12:00):
Well, you mentioned the pay equity changes that's dominated the
political discourse for a few weeks. Now, now that we've
learned that nearly thirteen billion over four years has been saved,
is it a win for the government to the average
person on the street, that's a pretty big number to
attach a saving.
Speaker 3 (12:18):
Two Yeah, Well, I mean, I guess you know, it
has kind of opened up the budget for the government
to do the things they wanted to do, So, you know,
I think didn't David Seymour get in trouble for saying.
Speaker 1 (12:28):
That Brook van Velden saved the budget. Yeah, well, it
kind of has.
Speaker 5 (12:32):
Right.
Speaker 3 (12:32):
Whether it's a win for the government, well, we'll have
to wait and see, because I think it's going to
be a hot topic for a while to come, because
you know, just just at a superficial level politically, money
for businesses, and it's coming out of the potential wage
increases that could have gone to some of the poorest workers,
female workers and female industries and often caring for the
(12:53):
most vulnerable people in society. So you've got a pretty
stark contrast there, and that's something for the opposition to
work with and say, hey, you know, why are we
giving this money to businesses. They're going to have to
really sell this kind of productivity argument, and it's not
not necessarily a simple simple sales job. So I think
the government will still be up against it politically for
a few more weeks. I think they're hoping that it'll
(13:13):
all just roll on and that maybe by the time
we get to an election, but I've spoken to a
few women who think it might not.
Speaker 6 (13:22):
This House has no confidence in the government because it
has chosen to pay for its budget by cutting the
future wages of working women. Mister Speaker Niicola Willis's pre
budget's been got it half right. This was a scramble
without the lollies.
Speaker 1 (13:41):
A budget that has scrambled.
Speaker 6 (13:43):
The government's finances, tried a whole lot of smoke and
mirrors to hide where their cuts are being made, and
to try and confuse Use Islanders with the idea that
they'll be better off when for a lot of key
we families, this budget is nothing but bad use.
Speaker 2 (14:05):
Well, in terms of infrastructure, we've had some investments in
rail military equipment, and billion dollars on hospitals upgrades and maintenance,
just under a billion dollars of capital and operating spending
on new classrooms, two hundred and nineteen million on recovery
work on cyclone damaged roads. Does this feel like a
good infrastructure spend? I ask this only because the Herald
(14:28):
editorial on budget Day said that it is unacceptable for
some of us to have seen our quality of life
fall because of a lack of basic infrastructure. So if
we're saving thirteen billion dollars, shouldn't we be getting something
a bit more out of it?
Speaker 5 (14:45):
Yeah?
Speaker 3 (14:45):
I mean this is the spending is fairly basic. It's
the kind of keeping things running, coping with the higher population,
more people living in certain areas, needing the schools, making
sure that the hospitals can cope, and I imagine it's
still going to be plenty of people saying that this
is still going to be an incredibly tight budget for
health and education regardless. So this is where the government
(15:05):
is caught on the spending front. They and the argument
would come back to debt and borrowing because the tax
takes down issues about how quickly it's going to come
back and start putting more money into the government coffers
they're up against it, and so what are the options, Well,
you cut or you borrow, And of course the opposition
is saying, well, we could afford to borrow more, and
depends who you talk to, you know we could, but
(15:26):
that might be taking a higher level of risk than
some people feel like taking. At the moment, we could
probably technically afford to borrow more. But I think one
of the issues that politically holds this government back and
a lot of people who voted for them, is the
sense that governments can actually spend that money. Well, so
after what we've been through with all the borrowing and
spending to get through COVID, but then all sorts of
(15:47):
other stuff that was planned on the infrastructure front and
hasn't happened, people are skeptical about the the ability of
governments to deliver if they borrow more money. So I
think that's a big part of the debate around borrowing
more you know, New Zealanders country that has to be
ready for the next earthquake or the next major natural disaster,
or the next big international shocks. So I'm kind of
(16:07):
pleased to see Nikola Willis being prudent there and hopefully,
you know, building for the future. I'm not as gloomy
as some other commentators. If you've talked to Matthew Hooton
or someone like that, they.
Speaker 1 (16:18):
Think it's pretty gloomy. They're all dar livestream.
Speaker 5 (16:21):
Yeah, until the government is prepared to cut superannuation and
tertiary healthcare, basically this country is heading towards bankruptcy. None
of this takes into account the problems that we've known
about for thirty or forty years that chicken from twenty thirty.
We're going to start that period about fifty percent of
GDP worse than we expected at the end of the
(16:44):
era of reform under the Bulger, Shipley and Clark governments.
Speaker 3 (16:49):
He would argue that we're in real trouble, say in
the next ten years, if we don't take some really
radical action and cut back even harder. So the alternative
is to bet on the growth. So I think the
government is rolling the dice, betting on business to grow
this economy and betting, I guess, or hoping that you
know that the boom and the primary sector keeps going,
they can get tourism back. Yeah, those are the things
(17:11):
that need to happen.
Speaker 2 (17:12):
Well, ultimately, Liam, do you think this budget is going
to be a winner with voters or is it a
bit too middle of the road.
Speaker 3 (17:17):
Yeah, it could, It could be a difficult cell. But
it is the middle budget, you know, so that the
first budget in power in a three year term. You've
kind of got to deliver all these promises that you made,
so that's pretty costly. Second budget is the one that
might as well be the most unpopular budget, and it's
the one that people might forget because you've got another
one coming up in election year where you can maybe
put something a little bit more like whatever. For Nicholais
(17:40):
said no lolly scramble this year. I'm not sure that
budgets are meant to be a lolly scramble, but a
lolly or two. Yeah, I think I think this budget
probably is quite a hard sell. I mean, the business
community will be quite happy and they'll be excited about it,
and there'll be lots of discussion about growth and maybe
maybe it's you know, from a confidence point of view,
that will be quite good. But for the wider public,
I think it's probably tough.
Speaker 2 (18:00):
Sel Thanks for joining us, Liam, cheers. That's it for
this episode of the Front Page. You can read more
about today's stories and extensive news coverage at enzdherld dot
co dot MZ. The Front Page is produced by Ethan
Sills and Richard Martin, who is also our sound engineer.
(18:22):
I'm Chelsea Daniels. Subscribe to The Front Page on iHeartRadio
or wherever you get your podcasts, and tune in on
Monday for another look behind the headlines.
Kiota.
Speaker 2 (00:06):
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald. The Coalition
government has unveiled its second budget. Over twenty billion dollars
in savings has been found over the next four years,
more than half from the controversial changes to our pay
(00:29):
equity scheme. There are changes to key we save a
contributions means testing for support for parents, and a major
new tax incentive for businesses. Finance Minister Nikola Willis has
said that it is a responsible budget, while Labor has
called it an austerity budget that leaves women out and
is stealing from our kids. To break down what all
(00:51):
of this means for you today on the Front Page,
we're joined by Enzit Herald Business Editor at Large Liam
dan So. Nikola Willis has called this a growth budget.
Labour's gone with austerity. If you had to pick a pithy,
one word descriptive of this budget, Liam, what would you
(01:12):
go with?
Speaker 3 (01:12):
Oh, good question, sort of a tightrope balancing act, something
like that. It's a little bit of austerity and a
little bit of growth, some big cuts to some things
and there's a big roll of the dice for example,
in terms of hoping that business is going to really
grab this tax cut and invest for growth. So that's
probably it's probably where they really rolled the dice big
on that one. You know, I was wondering, where's the
(01:33):
growth coming from. They still had growth budget at the
top of all the press releases, but you know, six
six billion, six point four billion over four years. It's
a significant break, especially if you think of a small
business someone who's having to upgrade all their tools and
you know, their transport and all that sort of stuff
every five years or so. To get a twenty percent
break when they do that, it could be quite a
(01:54):
substantial amount of money for them. So it's an incentive
to upgrade all the equipment earlier, you know, and make
themselves more a fit and drive some productivity, which we're
always talking about. So that's the that's the idea. The
theory is that that will mean the businesses will invest
more in up to date technology, latest equipment, and they'll
be more efficient and workers will be more productive and
the economy will benefit because of that.
Speaker 2 (02:16):
The key we saver changes are one of the big
changes here. Hey, taxpayers will now get two hundred and
sixty dollars and seventy two cents from the government, down
from five hundred and twenty one. In return, employees and
employers default contribution will rise to four percent from three percent,
which is being phased in over the next three years.
(02:38):
What sort of impact could that change have.
Speaker 3 (02:41):
Yeah, so the net outcome is that people would save
more over the period of time. I mean the risk
with cutting that tax break is so it's been cut
by half, so you know, it was five hundred dollars
a year. You can say, well, you've lost two hundred
dollars a year, but you compound that over twenty years
and you can do some maths and say that that's
actually potential taking you know, twenty thousand or whatever out
(03:02):
of people's long term retirement savings. But that is more
than compensated for by the increase to the contributions, which
will come out of the employee's pocket and the employer's pocket.
But hopefully, you know, half a percent at a time
won't be too onerous. So sort of a step in
the right direction in terms of lifting those investment rates.
In Australia, they're up to twelve percent or something.
Speaker 1 (03:23):
Well or thirteen now, Yeah.
Speaker 3 (03:25):
And obviously that would sound horrendous to suddenly take an
extra nine or ten percent out of your pay and
for employers to have to pay that. But if you
if you step your way there, gradually you know they've
got four trillion dollars in their superannuation scheme. And we
look across the Tasman and say why are they richer
than us? Well, it's because they've saved the money and
they've got all this money.
Speaker 1 (03:44):
This is not authterity.
Speaker 4 (03:47):
In fact, it is what you do to avoid austerity
because getting the books in shape ensures New Zealand has
financial security and choices into the future. That's right, And
as I am about to set out, savings in this
budget have allowed us to make much needed investments in health, any, education,
(04:14):
law and order and rebuilding our defense force.
Speaker 2 (04:17):
Yeah. Well New Zealanders are notoriously bad savers, and key
we saver for a lot of us is our main investments.
So is this government telling people to pull their bootstraps
up and put some more evident in.
Speaker 3 (04:33):
Yeah, I guess a little bit. You know, it's it's
a bit of that. I mean, there's there's a bit
of that all through this budget. It's definitely to nature,
to any Wellington Business editor said it called it the
true blue budget. It is very much some ideological or
political decisions. They are like no more dolls for the
eighteen to nineteen year olds. Parents have to look after
them or they have to have to go back to study.
(04:54):
If you can't get a job, you've got to be studying,
otherwise you're in the You're still responsibility of their parents
to pay for It was quite a big change.
Speaker 2 (05:01):
If it was short sighted as well, because I mean
going to UNI for some people immediately out of school
that it isn't an option for some people, or in
some people's minds it isn't.
Speaker 3 (05:12):
No I guess you know, there are other things you
could be looking for apprenticeships or looking for more vocational
training and things, but you know they have to make
sure the pathways are there to do that. My concern
would be for some of those communities where unemployment is
endemic and mum and dad are unemployed. But I can
see you know that that true blue bit is that
I guess that from the right wing political perspective, it's
to try and push people to get motivated and go
(05:34):
and look after themselves. But it could be quite a
shock in the short term for some people.
Speaker 2 (05:38):
The investment boost tax is a big one as well.
You mentioned it before. Business is allowed to deduct twenty
percent of the cost of new assets immediately from their
tax will income on top of normal depreciation. Essentially, this
means a lower tax bill and it's believed that over
twenty years this could increase the level of GDP by
one percent and wages by one point five percent. How
(06:01):
big of a deal is this change, given how long
term those benefits are.
Speaker 3 (06:07):
I was just talking with an economist, Christina Long from
enzi Are, and she wasn't that impressed with it, like
in terms of the overall transformative nature of it, But
I think it is. It's sort of a move in
the right direction to try and lift the productivity of
New Zealand. So we have this reputation for being having
a low productivity rate in the country, in this country,
and there are many reasons, but one of the reasons
(06:30):
that it has been identified is that we just don't
invest to the same level in the latest technology, new equipment,
the stuff that makes each worker be able to generate
more output. You know, if you go to Germany then
it's all robotic factories and all that sort of stuff,
and so anything that incentivizes businesses to invest, it should
incentivize them perhaps to take a risk, expand a bit more.
(06:53):
That's what they want, That's what they talk about when
they say going for growth. It will be interesting to
see because the you know, Employees and Manufacturers Association, Business
end Z, they've been lobbying for this for a long time.
They've finally got it. I think businesses will kind of
have to put their money where their mouth is now
and get out there and do it. You'd hope, and
you'd hope that it has some payoff it. It's also
going to be you're going to get that twenty percent
(07:14):
break on your new buying a new forklift anyway, where
you get a twenty percent break on it, that is
kind of a stimulus. So that's where people say this
is an austerity budget or not arguing that that this
is a little bit of stimulus into the economy. So
you know, one point whatever billion a year over four years.
Speaker 2 (07:29):
Well, basically the people who are holding off buying that
forklift now have an incentive to do so more so
than before.
Speaker 3 (07:35):
Yeah, and the true blue bit, the sort of the
right leaning bit is saying, well, the stimulatory part, the
bit where we're putting a bit a bit cash back
into the economy. You could put it in the pockets
of consumers. Consumers might go out and just spend a
little bit, They might drink and eat a little bit more,
which is, you know, maybe good for the short term
health of the economy and hospitality. But if you give
it to the businesses and they invest in the machinery
(07:56):
of the economy the business world, you know, that's positive
long term. That means that they ultimately should be able
to grow bigger, make more money, employ more people. You've
got to believe, I mean, I'm trying to be a
political here. You've got to believe that business and capitalism
is going to do the job for you to back this,
and obviously this government very clearly does.
Speaker 4 (08:26):
So.
Speaker 2 (08:26):
I reckon means testing is one of the themes of
this budget. Hey, government, can we save a Contributions are
now going to stop if you earn one hundred and
eighty thousand dollars a year or more and for the
best start tax credits that will become income tested. So
starting at families on seventy nine thousand dollars a year.
Is that a smart move from the government.
Speaker 3 (08:47):
Well, I mean, some people argue that it's difficult and complex.
You know, you're adding another layer of complexity to have
to means test everything. I guess it seems like a
really a fairly generous bar one hundred and eighty thousand
when you're talking about five hundred dollars or there. You know,
I think if you could afford to top up your
own key, we savior to some extent of it. That's
the case.
Speaker 2 (09:06):
Rich people like getting more money, though.
Speaker 3 (09:09):
Everyone likes getting more money. Yeah, I wonder. I mean,
it's interesting because they might get a bit better at
you know, the machinery of means testing, and you know
where does that lead. Well, maybe you know, they've talked
about whether we should be means testing superannuation, so that
if you're actually still learning while you're getting the retirement pension,
(09:29):
you could be means tested, and that's considered quite difficult
to do. Well, perhaps if for government's some getting better
at means testing because they're doing it for some other things,
it becomes part and parcel of what they do. But yeah,
they means test already for student allowances and things like that.
So I guess. I guess there is mechanisms in place. Yeah,
I mean it's all about plowing back a little bit
(09:50):
of money here and there, isn't it. I mean that's
what the finance ministers had to do. They've clawed back
a large chunk from the pay equity sort of reverse all,
and then they're crawing back bits and pieces everywhere else
to get a few billion here and a few billion there.
Speaker 1 (10:05):
Seventy nine thousand dollars a year for a family. Though
that's quite low, isn't it.
Speaker 5 (10:09):
It is?
Speaker 3 (10:09):
The argument is with a real right when government would
even want that benefit there in the first place. So
they've put a means test in so it's really just
the poorest people I guess that are going to get it.
Speaker 2 (10:19):
So last year's budget was all about putting more money
into our wallets with tax cuts and other savings. Is
there anything in this budget that looks like it will
help ease the cost of living?
Speaker 1 (10:30):
Or have we moved on from that buzz term?
Speaker 2 (10:32):
Now there's support for working for families and supercar holders,
but it doesn't feel like a massive support budget.
Speaker 3 (10:38):
No, this is not a support budget, and I don't
know whether you'd call it austerity or not. It's probably
depends on your political colors, but it's certainly from that
point of view. You know, it was just that tax
break for business, which may be a little bit stimulatory,
but for ordinary consumers there isn't any stimulus and they
don't want to kick start the inflation again. They don't
want to get back growing the economy just by putting
money into it, is what they're saying. Well, that's what
(11:01):
the last government did. We're not doing that. We need
it to come from the ground up, needs to come
from business and export earnings and all that sort of stuff.
So yeah, I don't think we expected much support for people.
I'm sure the government would argue that inflation is more
or less under control. I know right now everyone's panicking
about the price of butter and there's some cheese. Yeah, yeah,
don't forget cheese. But basically, you know, weirdly, when dairy
(11:24):
products are going through the roof like that, that's good
news for New Zealand. I mean, there's money coming into
the countries and economists think that overall inflation will stay
relatively subdued. A few of those key commodity products that
are accepted, you know that are having a bit of
a moment, but the core inflation in the economy because
of higher unemployment wages coming off, it's expected to stay
(11:45):
pretty subdued. So nobody's ever going to say, hey, the
cost of living is great, but it shouldn't be the
same sort of issue that it was. And I don't
think national would ideologically support the kind of just payments
to people to cope with it anyway, because they would
argue that that would just exacerbate the inflation.
Speaker 2 (12:00):
Well, you mentioned the pay equity changes that's dominated the
political discourse for a few weeks. Now, now that we've
learned that nearly thirteen billion over four years has been saved,
is it a win for the government to the average
person on the street, that's a pretty big number to
attach a saving.
Speaker 3 (12:18):
Two Yeah, Well, I mean, I guess you know, it
has kind of opened up the budget for the government
to do the things they wanted to do, So, you know,
I think didn't David Seymour get in trouble for saying.
Speaker 1 (12:28):
That Brook van Velden saved the budget. Yeah, well, it
kind of has.
Speaker 5 (12:32):
Right.
Speaker 3 (12:32):
Whether it's a win for the government, well, we'll have
to wait and see, because I think it's going to
be a hot topic for a while to come, because
you know, just just at a superficial level politically, money
for businesses, and it's coming out of the potential wage
increases that could have gone to some of the poorest workers,
female workers and female industries and often caring for the
(12:53):
most vulnerable people in society. So you've got a pretty
stark contrast there, and that's something for the opposition to
work with and say, hey, you know, why are we
giving this money to businesses. They're going to have to
really sell this kind of productivity argument, and it's not
not necessarily a simple simple sales job. So I think
the government will still be up against it politically for
a few more weeks. I think they're hoping that it'll
(13:13):
all just roll on and that maybe by the time
we get to an election, but I've spoken to a
few women who think it might not.
Speaker 6 (13:22):
This House has no confidence in the government because it
has chosen to pay for its budget by cutting the
future wages of working women. Mister Speaker Niicola Willis's pre
budget's been got it half right. This was a scramble
without the lollies.
Speaker 1 (13:41):
A budget that has scrambled.
Speaker 6 (13:43):
The government's finances, tried a whole lot of smoke and
mirrors to hide where their cuts are being made, and
to try and confuse Use Islanders with the idea that
they'll be better off when for a lot of key
we families, this budget is nothing but bad use.
Speaker 2 (14:05):
Well, in terms of infrastructure, we've had some investments in
rail military equipment, and billion dollars on hospitals upgrades and maintenance,
just under a billion dollars of capital and operating spending
on new classrooms, two hundred and nineteen million on recovery
work on cyclone damaged roads. Does this feel like a
good infrastructure spend? I ask this only because the Herald
(14:28):
editorial on budget Day said that it is unacceptable for
some of us to have seen our quality of life
fall because of a lack of basic infrastructure. So if
we're saving thirteen billion dollars, shouldn't we be getting something
a bit more out of it?
Speaker 5 (14:45):
Yeah?
Speaker 3 (14:45):
I mean this is the spending is fairly basic. It's
the kind of keeping things running, coping with the higher population,
more people living in certain areas, needing the schools, making
sure that the hospitals can cope, and I imagine it's
still going to be plenty of people saying that this
is still going to be an incredibly tight budget for
health and education regardless. So this is where the government
(15:05):
is caught on the spending front. They and the argument
would come back to debt and borrowing because the tax
takes down issues about how quickly it's going to come
back and start putting more money into the government coffers
they're up against it, and so what are the options, Well,
you cut or you borrow, And of course the opposition
is saying, well, we could afford to borrow more, and
depends who you talk to, you know we could, but
(15:26):
that might be taking a higher level of risk than
some people feel like taking. At the moment, we could
probably technically afford to borrow more. But I think one
of the issues that politically holds this government back and
a lot of people who voted for them, is the
sense that governments can actually spend that money. Well, so
after what we've been through with all the borrowing and
spending to get through COVID, but then all sorts of
(15:47):
other stuff that was planned on the infrastructure front and
hasn't happened, people are skeptical about the the ability of
governments to deliver if they borrow more money. So I
think that's a big part of the debate around borrowing
more you know, New Zealanders country that has to be
ready for the next earthquake or the next major natural disaster,
or the next big international shocks. So I'm kind of
(16:07):
pleased to see Nikola Willis being prudent there and hopefully,
you know, building for the future. I'm not as gloomy
as some other commentators. If you've talked to Matthew Hooton
or someone like that, they.
Speaker 1 (16:18):
Think it's pretty gloomy. They're all dar livestream.
Speaker 5 (16:21):
Yeah, until the government is prepared to cut superannuation and
tertiary healthcare, basically this country is heading towards bankruptcy. None
of this takes into account the problems that we've known
about for thirty or forty years that chicken from twenty thirty.
We're going to start that period about fifty percent of
GDP worse than we expected at the end of the
(16:44):
era of reform under the Bulger, Shipley and Clark governments.
Speaker 3 (16:49):
He would argue that we're in real trouble, say in
the next ten years, if we don't take some really
radical action and cut back even harder. So the alternative
is to bet on the growth. So I think the
government is rolling the dice, betting on business to grow
this economy and betting, I guess, or hoping that you
know that the boom and the primary sector keeps going,
they can get tourism back. Yeah, those are the things
(17:11):
that need to happen.
Speaker 2 (17:12):
Well, ultimately, Liam, do you think this budget is going
to be a winner with voters or is it a
bit too middle of the road.
Speaker 3 (17:17):
Yeah, it could, It could be a difficult cell. But
it is the middle budget, you know, so that the
first budget in power in a three year term. You've
kind of got to deliver all these promises that you made,
so that's pretty costly. Second budget is the one that
might as well be the most unpopular budget, and it's
the one that people might forget because you've got another
one coming up in election year where you can maybe
put something a little bit more like whatever. For Nicholais
(17:40):
said no lolly scramble this year. I'm not sure that
budgets are meant to be a lolly scramble, but a
lolly or two. Yeah, I think I think this budget
probably is quite a hard sell. I mean, the business
community will be quite happy and they'll be excited about it,
and there'll be lots of discussion about growth and maybe
maybe it's you know, from a confidence point of view,
that will be quite good. But for the wider public,
I think it's probably tough.
Speaker 2 (18:00):
Sel Thanks for joining us, Liam, cheers. That's it for
this episode of the Front Page. You can read more
about today's stories and extensive news coverage at enzdherld dot
co dot MZ. The Front Page is produced by Ethan
Sills and Richard Martin, who is also our sound engineer.
(18:22):
I'm Chelsea Daniels. Subscribe to The Front Page on iHeartRadio
or wherever you get your podcasts, and tune in on
Monday for another look behind the headlines.
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