December 21, 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
Sound Engineer/Producer: Richard Martin
Producer: Ethan Sills
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:19):
Kyota at Chelsea Daniels here, host of the Front Page.
We're taking awek breakover summer, but to help build the gap,
we're re issuing some of our most significant episodes of
twenty twenty five on behalf of the Front Page team.
Thanks for listening and we look forward to being back
with you on January twelfth, twenty twenty six. Kyota, I'm
(00:44):
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 equity scheme.
(01:08):
There are changes to keyw saver 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.
Speaker 2 (01:28):
To break down what all.
Speaker 1 (01:29):
Of this means for you today on the Front Page,
we're joined by Enzid 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
(01:50):
you go with?
Speaker 3 (01:50):
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
(02:11):
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
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
(02:31):
a substantial amount of money for them. So it's an
incentive to upgrade all the equipment earlier, you know, and
make themselves more efficient and drive some productivity, which we're
always talking about. So 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
(02:52):
will benefit because of that.
Speaker 1 (02:54):
The key we saver changes are one of the big
changes here. Hey, tax payers 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
(03:15):
three years. What sort of impact could that change have.
Speaker 3 (03:19):
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 potentially taking you know, twenty thousand or whatever out
(03:40):
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. It's 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 (04:01):
For thirteen Now, yeah, man, and.
Speaker 3 (04:03):
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 tessman and say, why are they richer than us? Well,
it was because they've saved the money and they've they've
got all this money.
Speaker 1 (04:22):
This is not austerity.
Speaker 4 (04:25):
In fact, it is what you do to avoid austerity
because getting the books in shape ensures New Zealand has
financial security and choices.
Speaker 1 (04:39):
Into the future.
Speaker 4 (04:41):
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 and education, law and order and
rebuilding our defense force.
Speaker 1 (04:55):
Yeah. Well, New Zealanders are notoriously bad savers and kei
we savor for a lot of us is our main investments.
So is this government telling people to pull their bootstraps
up and put some more effid in.
Speaker 3 (05:11):
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 nature to
Wellington Business editor said it called it the true blue budget.
Is 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. If
(05:32):
you can't get a job, you've got to be studying
otherwise you're in You're still responsibility of their parents to
pay for That was quite a big change.
Speaker 1 (05:39):
If I 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 (05:50):
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.
Speaker 1 (05:59):
To do that.
Speaker 3 (05:59):
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 and look after themselves. But it could be quite
a shock in the short term for some people.
Speaker 1 (06:16):
The investment boost tax is a 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 big
(06:39):
of a deal is this change, given how long term
those benefits are.
Speaker 3 (06:45):
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,
(07:05):
and there are many reasons, but one of the reasons
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
(07:28):
incentivize them perhaps to take a risk, expand a bit more.
That's what they want, that's what they talk about when
they say going for growth. It will be interesting to
see because that 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
(07:50):
going to be you're going to get that twenty percent
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 1 (08:07):
Well, basically the people who are holding off buying that
forklift now have an incentive to do so more so
than before.
Speaker 3 (08:13):
Yeah, and the true blue bit, the sort of the
right leaning bit is saying, well, the stimulatory part, the
bit where we 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
(08:34):
of the economy the business world, you know, that's a
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 5 (09:04):
So.
Speaker 1 (09:04):
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 (09:25):
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 here 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 (09:44):
Rich people like getting more money, though.
Speaker 3 (09:47):
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?
Speaker 6 (09:57):
Well?
Speaker 3 (09:57):
Maybe maybe you know that 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. You could
be means tested, and that's considered quite difficult to do well.
Perhaps if for governments 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
(10:18):
mean test already for student allowances and things like that,
So I guess there is mechanisms in place.
Speaker 6 (10:24):
Yeah.
Speaker 3 (10:25):
I mean it's all about clawing back a little bit
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 reversal,
and then they're clrawing back bits and pieces everywhere else
to get a few billion here and a few billion.
Speaker 1 (10:42):
There seventy nine thousand dollars a year for a family.
Though that's quite low, isn't it.
Speaker 6 (10:47):
It is?
Speaker 3 (10:47):
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 1 (10:57):
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? Or have we moved
on from that buzz term Now there's support for working
for families and supercar holders, but it doesn't feel like
a massive support budget.
Speaker 3 (11:16):
No, this is not a support budget. And I don't
know you'd call it austerity or not. It's probably depends
on your political colors, but it's it's certainly from 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 and
I don't want to kickstart 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
(11:39):
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
(12:02):
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 economy, because of higher unemployment,
wages coming off, it's expected to stay pretty subdued. So
(12:24):
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 1 (12:38):
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. So the average
person on the street, that's a pretty big number to
attach a saving.
Speaker 3 (12:55):
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 that.
Speaker 1 (13:06):
Brook van Velden saved the budget.
Speaker 3 (13:08):
Yeah, well it kind of has.
Speaker 1 (13:10):
Right.
Speaker 3 (13:10):
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
(13:31):
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
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 all
(13:51):
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 5 (14:00):
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 Nichola Willis's pre
budget's been got at half right. This was a scramble
without the lollies. A budget that has scrambled the government's finances,
(14:23):
tried a whole lot of smoke and mirrors to hide
where their cuts are being made, and to try and
confuse New Zealanders with the idea that they'll be better
off when for a lot of key we families, this
budget is nothing but bad news.
Speaker 1 (14:42):
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
(15:06):
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.
Speaker 2 (15:17):
So if we're saving thirty billion dollars, shouldn't we be
getting something a bit more out of it? Yeah, 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, 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
(15:37):
is still going to be an incredibly tight budget for
health and education regardless. So this is where the government
is caught on the spending front. 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
(15:58):
is saying, well, we could afford to borrow more, and
depends who you talk to, you know we could, but
that might be taking a higher level of risk, and
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
(16:20):
after what we've been through with all the borrowing and
spending to get through COVID, but then all all sorts
of other stuff that was planned on the infrastructure front
and hasn't happened, people are skeptical about 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.
Speaker 3 (16:37):
You know, New Zealand is a country that has to
be ready for the next earthquake, or the next major
natural disaster, or the next big international shock. So I'm
kind of pleased to see Nicola willis being prudent there
and hopefully, you know, building for the future. I'm not
as gloomy as as some other commentators. If you've talked
to Matthew Hooton or someone like that, they think.
Speaker 1 (16:56):
It's pretty gloomy there all day livestream.
Speaker 6 (16:59):
Yeah, until the government is prepared to cut superannuation and
tertiary healthcare, basically this country is heading towards bankruptcy. None
of this stakes into account the problems that we've known
about for thirty or forty years, that Kicken from twenty thirty,
we're going to start that period about fifty percent of
GDP work than we expected at the end of the
(17:22):
era of reform under the Bulger, Shipley and Clark governments.
Speaker 3 (17:27):
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. And 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
(17:49):
that need to happen.
Speaker 1 (17:50):
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 (17:55):
Yeah, it it could be a difficult cell. But it
is the middle budget, you know, so that the first
budget in power in the 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 Nicholas said,
(18:18):
no lolly scramble is I'm not sure that budgets are
meant to be a lolly scramble, but a lolly or two.
Speaker 6 (18:23):
Yeah.
Speaker 3 (18:23):
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 a
tough sell.
Speaker 1 (18:38):
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 enzidherld dot co
dot MZ.
Speaker 2 (18:54):
The Front Page is produced by Ethan.
Speaker 1 (18:56):
Sells and Richard Martin, who is also our sound engineer.
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.
Kyota at Chelsea Daniels here, host of the Front Page.
We're taking awek breakover summer, but to help build the gap,
we're re issuing some of our most significant episodes of
twenty twenty five on behalf of the Front Page team.
Thanks for listening and we look forward to being back
with you on January twelfth, twenty twenty six. Kyota, I'm
(00:44):
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 equity scheme.
(01:08):
There are changes to keyw saver 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.
Speaker 2 (01:28):
To break down what all.
Speaker 1 (01:29):
Of this means for you today on the Front Page,
we're joined by Enzid 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
(01:50):
you go with?
Speaker 3 (01:50):
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
(02:11):
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
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
(02:31):
a substantial amount of money for them. So it's an
incentive to upgrade all the equipment earlier, you know, and
make themselves more efficient and drive some productivity, which we're
always talking about. So 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
(02:52):
will benefit because of that.
Speaker 1 (02:54):
The key we saver changes are one of the big
changes here. Hey, tax payers 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
(03:15):
three years. What sort of impact could that change have.
Speaker 3 (03:19):
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 potentially taking you know, twenty thousand or whatever out
(03:40):
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. It's 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 (04:01):
For thirteen Now, yeah, man, and.
Speaker 3 (04:03):
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 tessman and say, why are they richer than us? Well,
it was because they've saved the money and they've they've
got all this money.
Speaker 1 (04:22):
This is not austerity.
Speaker 4 (04:25):
In fact, it is what you do to avoid austerity
because getting the books in shape ensures New Zealand has
financial security and choices.
Speaker 1 (04:39):
Into the future.
Speaker 4 (04:41):
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 and education, law and order and
rebuilding our defense force.
Speaker 1 (04:55):
Yeah. Well, New Zealanders are notoriously bad savers and kei
we savor for a lot of us is our main investments.
So is this government telling people to pull their bootstraps
up and put some more effid in.
Speaker 3 (05:11):
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 nature to
Wellington Business editor said it called it the true blue budget.
Is 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. If
(05:32):
you can't get a job, you've got to be studying
otherwise you're in You're still responsibility of their parents to
pay for That was quite a big change.
Speaker 1 (05:39):
If I 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 (05:50):
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.
Speaker 1 (05:59):
To do that.
Speaker 3 (05:59):
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 and look after themselves. But it could be quite
a shock in the short term for some people.
Speaker 1 (06:16):
The investment boost tax is a 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 big
(06:39):
of a deal is this change, given how long term
those benefits are.
Speaker 3 (06:45):
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,
(07:05):
and there are many reasons, but one of the reasons
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
(07:28):
incentivize them perhaps to take a risk, expand a bit more.
That's what they want, that's what they talk about when
they say going for growth. It will be interesting to
see because that 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
(07:50):
going to be you're going to get that twenty percent
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 1 (08:07):
Well, basically the people who are holding off buying that
forklift now have an incentive to do so more so
than before.
Speaker 3 (08:13):
Yeah, and the true blue bit, the sort of the
right leaning bit is saying, well, the stimulatory part, the
bit where we 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
(08:34):
of the economy the business world, you know, that's a
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 5 (09:04):
So.
Speaker 1 (09:04):
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 (09:25):
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 here 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 (09:44):
Rich people like getting more money, though.
Speaker 3 (09:47):
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?
Speaker 6 (09:57):
Well?
Speaker 3 (09:57):
Maybe maybe you know that 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. You could
be means tested, and that's considered quite difficult to do well.
Perhaps if for governments 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
(10:18):
mean test already for student allowances and things like that,
So I guess there is mechanisms in place.
Speaker 6 (10:24):
Yeah.
Speaker 3 (10:25):
I mean it's all about clawing back a little bit
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 reversal,
and then they're clrawing back bits and pieces everywhere else
to get a few billion here and a few billion.
Speaker 1 (10:42):
There seventy nine thousand dollars a year for a family.
Though that's quite low, isn't it.
Speaker 6 (10:47):
It is?
Speaker 3 (10:47):
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 1 (10:57):
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? Or have we moved
on from that buzz term Now there's support for working
for families and supercar holders, but it doesn't feel like
a massive support budget.
Speaker 3 (11:16):
No, this is not a support budget. And I don't
know you'd call it austerity or not. It's probably depends
on your political colors, but it's it's certainly from 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 and
I don't want to kickstart 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
(11:39):
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
(12:02):
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 economy, because of higher unemployment,
wages coming off, it's expected to stay pretty subdued. So
(12:24):
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 1 (12:38):
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. So the average
person on the street, that's a pretty big number to
attach a saving.
Speaker 3 (12:55):
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 that.
Speaker 1 (13:06):
Brook van Velden saved the budget.
Speaker 3 (13:08):
Yeah, well it kind of has.
Speaker 1 (13:10):
Right.
Speaker 3 (13:10):
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
(13:31):
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
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 all
(13:51):
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 5 (14:00):
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 Nichola Willis's pre
budget's been got at half right. This was a scramble
without the lollies. A budget that has scrambled the government's finances,
(14:23):
tried a whole lot of smoke and mirrors to hide
where their cuts are being made, and to try and
confuse New Zealanders with the idea that they'll be better
off when for a lot of key we families, this
budget is nothing but bad news.
Speaker 1 (14:42):
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
(15:06):
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.
Speaker 2 (15:17):
So if we're saving thirty billion dollars, shouldn't we be
getting something a bit more out of it? Yeah, 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, 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
(15:37):
is still going to be an incredibly tight budget for
health and education regardless. So this is where the government
is caught on the spending front. 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
(15:58):
is saying, well, we could afford to borrow more, and
depends who you talk to, you know we could, but
that might be taking a higher level of risk, and
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
(16:20):
after what we've been through with all the borrowing and
spending to get through COVID, but then all all sorts
of other stuff that was planned on the infrastructure front
and hasn't happened, people are skeptical about 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.
Speaker 3 (16:37):
You know, New Zealand is a country that has to
be ready for the next earthquake, or the next major
natural disaster, or the next big international shock. So I'm
kind of pleased to see Nicola willis being prudent there
and hopefully, you know, building for the future. I'm not
as gloomy as as some other commentators. If you've talked
to Matthew Hooton or someone like that, they think.
Speaker 1 (16:56):
It's pretty gloomy there all day livestream.
Speaker 6 (16:59):
Yeah, until the government is prepared to cut superannuation and
tertiary healthcare, basically this country is heading towards bankruptcy. None
of this stakes into account the problems that we've known
about for thirty or forty years, that Kicken from twenty thirty,
we're going to start that period about fifty percent of
GDP work than we expected at the end of the
(17:22):
era of reform under the Bulger, Shipley and Clark governments.
Speaker 3 (17:27):
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. And 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
(17:49):
that need to happen.
Speaker 1 (17:50):
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 (17:55):
Yeah, it it could be a difficult cell. But it
is the middle budget, you know, so that the first
budget in power in the 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 Nicholas said,
(18:18):
no lolly scramble is I'm not sure that budgets are
meant to be a lolly scramble, but a lolly or two.
Speaker 6 (18:23):
Yeah.
Speaker 3 (18:23):
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 a
tough sell.
Speaker 1 (18:38):
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 enzidherld dot co
dot MZ.
Speaker 2 (18:54):
The Front Page is produced by Ethan.
Speaker 1 (18:56):
Sells and Richard Martin, who is also our sound engineer.
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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