Geof Nightingale: independent tax expert on National's budget responsibility rules

National's push for tighter control of the books is being welcomed - but questions are being raised over what's actually new.

Finance spokesperson Nicola Willis yesterday unveiled National's fiscal strategy - promising a surplus by 2028/29 and Government spending below 30 percent of GDP. 

But independent tax expert Geof Nightingale told Ryan Bridge National has made these same commitments before.

He says the three 'budget responsibility' rules are already in the fiscal strategy report, which the Government has to release for each budget.

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Episode Transcript

Speaker 1 (00:00):
Nationals said no new taxes on working people? What about
the others restated its budget responsibility rules, So surplus by
twenty eight twenty nine debt level below forty percent of GDP,
government spinning back towards thirty percent of GDP. Here's Nichola Willis.

Speaker 2 (00:14):
It went out more than twenty percent of GDP in
just under sixty years under the previous government.

Speaker 1 (00:21):
Labor, the Greens to Party, Mari and Top will tell
you that they can spend more, tax more, borrow more,
and then it will all work out. To the independent
tax expert Jeff Nightingale with me the Smaller Chief.

Speaker 2 (00:31):
Good morning, Good morning, Ryan.

Speaker 1 (00:33):
So what are you when they say no new taxes
on working people? What you what taxes do you reckon?
They're going to increase?

Speaker 2 (00:39):
Yeah, it's left it open there, but didn't it. I
think the way I'd interpret that is that they're not
going to change the income tax rates and they're not
going to change the business tax rates, small business tax rates.
So I think you know that really if they stick

(00:59):
to that, that really only leaves open things like levees
and fees and other small charges and maybe some tweaks
to some of the rules. Around the productibility of certain items.
But they seem to be ruling out to border tax rises.

Speaker 1 (01:15):
Yeah, I reckon they'll go with a campaign on a
bed tax that sort of thing. Anyway, let's talk about
the actual rules. Well, they're not even rules, aren't they
they're just guidelines and goals what they've stated because they've
stated them before and we haven't stuck to them.

Speaker 2 (01:30):
Yeah, that's right. So they're basically a restatement. Each year,
when the government puts together it's budget, it has to
buy law by the Public Finance Act, release a fiscal
strategy report. And these three rules that yesterday they call
them budget responsibility rules, they are already in the fiscal
strategy report despite that we haven't run a surplus since

(01:52):
twenty and nineteen. So if we've been in deficits now
for seven years and we're forecast to stay and deficits
for another three, it will be a decade of deficits.
Having said that, they are the right rules and it's
good to see them recommitting to them.

Speaker 1 (02:08):
What about net coll Crown debt expected to be what
almost forty six percent of GDP at the end of
this financial year, and they Treasury when they last looked
at this said fifty percent was okay, and national saying
actually needs to be under forty. Why the divergence.

Speaker 2 (02:25):
I think that the thing about debt is that by
world standards, we've got relatively low government debt to GDP.
But we shouldn't be comfortable with that because we are
a small, global exposed economy and we need a lot
of balance sheet capacity, debt capacity to respond to shops

(02:45):
and so we've used debt to respond to the Christ
to Jurith quakes, have used it to respond to COVID,
and that's good. We need to hold that capacity to
do that, but in the good years we need to
reduce that debt so we have the capacity. So forty
seems a sense of target. Of course, if you go
back a decade, the target was twenty percent of GDP,
so as forty percent is still a big increase.

Speaker 1 (03:07):
Jeff Nightingew Independent Tax Sexpert. For more from early edition
with Ryan Bridge, listen live to News Talks it'd be
from five am weekdays, or follow the podcast on iHeartRadio.