Jenee Tibshraeny: NZ Herald Wellington business editor ahead of the release of Budget 2025

Budget 2025 is set to be revealed to the nation tomorrow - and Finance Minister Nicola Willis has promised it will be a “No BS Budget” with “some surprises”.

Willis will take a step towards unwinding the expansion of Government that accompanied (and followed) the pandemic - while growing the economy.

NZ Herald Wellington business editor Jenee Tibshraeny outlines some questions she hopes to see resolved.

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Episode Transcript

Speaker 1 (00:00):
Nikola Willis has said she's going to deliver a no
BS budget tomorrow. So janatib Shaney has five questions she
wants answers to. She's with us now, how you and
a Hey, Heather. First question is how much they save
on pay equity A.

Speaker 2 (00:13):
Yeah, that's the big question. Look, that was the thing
that sort of shocked us all. The government came out
without any warning and changed that change that rule. You know,
that could save billions of dollars at the expense of
people who work in jobs dominated by women. Their pay
rises won't be as large as might otherwise be the case.

(00:34):
So question one is how much will a tightening of
the pay equity regime save.

Speaker 1 (00:40):
Let's see, I think ten billion plus by the way,
but as more than ten billion, but not as much
as seventeen billion as estimated.

Speaker 2 (00:49):
Yeah, yeah, look possibly, and that would be over the
four year period.

Speaker 1 (00:54):
Okay, So obviously it's been pretty well signaled that there's
going to be changes to key we save. I imagine
you're going to look at that. But the other one
will be there is some indication there will be tax changes.
What are you expecting?

Speaker 2 (01:04):
Yeah, Look, the thing is the government has said that
it wants to support economic growth, and it's also said
it wants businesses to invest more in technology, tools machinery
to support productivity. So one way of doing that is
that it could allow businesses to write off more depreciation
on some of their tools and equipment and so on.

(01:25):
That would lower their tax bills and encourage them to
invest more in these things. The questions will be, does
the government say, okay, you can write off, you know,
write off more depreciation on any type of asset, or
does it narrow it to save money and say only
certain types of assets, or does it say only certain

(01:47):
types of sectors can can get this type of tax relief.
That so, if it does go down that track, which
which some people think it will, that that is specifically
what I'll be looking for. Surplus, that's the big one.
So people who listen to Nicola Willis will hear that
she's talking about a return to surplus within the four

(02:08):
year forecast period. But the surplus that Nicola Willis is
referring to is not the traditional measure. It's the one
that excludes the impact of acc So I think what
we will be doing is keeping focused on the original
measure of the surplus. That's called the obergal, not the
ober gal X. And at the end of last year

(02:30):
the Treasury didn't see a return to surplus within the
forecast period. So yeah, what.

Speaker 1 (02:37):
About Treasury's forecasts? What are you looking for there?

Speaker 2 (02:41):
Well, you know, I think I'm going to be quite
interested to see that they do this. I mean, outside
of the normal stuff. I'm interested in some of the
sensitivity analysis they do. So every year they say, well,
if GDP growth is fast or slower, you know, bigger
or smaller, or interest rates are higher or lower, whatever
than we expected, this could be the impact on the

(03:02):
government's books. Now this year, I think that test will
be particularly interesting because the world is so uncertain, the
chances of Treasuries forecast being wrong is pretty high. You know,
Donald Trump is doing all sorts of things, So you know,
I'd be quite keen to look at that because you know,
that sort of thing can make quite a big difference

(03:24):
on the books. And the one that I've looked at
in the past is just that global, globally, bond yields
are higher than what was expected in December, and this
is pushing up the cost of the government's debt servicing costs.
So because of what's happening in the US, because of
the amount of government debt we have, it's costing the
government more than expected to service its debt, you know,

(03:46):
more than expected just in December. So you know, that
has an impact on the finances and on the return
to surplus. So, you know, the those scenarios I think
will be particularly interesting year because of all the uncertainty.

Speaker 1 (04:02):
Look forward to seeing you there, Jeanne. Jeanne Tostrainiy, the
Herald's business reporter.

Speaker 2 (04:07):
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