July 29, 2024 • 7 mins
The Finance Minister has promised relief is on the way for Kiwi households.
The Government's highly-anticipated tax changes officially take effect this coming Wednesday - meaning over three million people can expect a little more in their pay packets.
Finance Minister Nicola Willis says the Government has been working with payroll providers across the country to ensure these tax cuts go smoothly.
"From Wednesday, people will only pay the right amount of tax - and that's less tax than they had been paying."
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
So the latest US inflation data looks quite promising and
people are starting to talk about rate cuts by the Fed.
Will there or won't there be? Or talk to Shane
Soley from Harbor Asset Management about that and Fletchers in
just a few months time. But first we're joined by
Alfinance Minister Nicola with us. Hello Nikola, Kling Andrew, big
day for you, lots of announcements you and Christopher talking
(00:22):
about the tax cuts they come into effect on Wednesday,
with two hundred and fifty thousand employers across New Zealand
taking a little less money from their employees pay packets.
Speaker 2 (00:32):
Do you reckon?
Speaker 1 (00:32):
Those employers are ready for this.
Speaker 3 (00:36):
It's a big week for New Zealand workers. We have
been working with payroll providers across the country to make
sure they've changed their system so that from Wednesday people
will only pay the right amount of tax and that's
less tax than they have been paying. So for New
Zealanders this means relief is coming and it's on track
to Wednesday.
Speaker 1 (00:56):
And would you advise employees though to double check their
pace the just in case their employers have not quite
crossed all the t's and dotted the.
Speaker 3 (01:04):
Eyes yeah, look, I think that's a good idea. Can
spare your pacelets with what it was the fortnight before,
make sure that you are being charged at lower rate
of text. We've been advised by payroll providers that their
confidence are made for changes. If for any reason there
was a problem and the text changes didn't fly through
to you, you can still get it in areas, so
(01:26):
you will get what's o to you eventually. I have
no reason to think that you won't be getting it
from the time you do now.
Speaker 1 (01:33):
While the tax cuts obviously give you money back, and
I've got many texts people saying how lovely I get
my money back, You obviously get money back from a
tax cut's inherent in the name. The opposition, though, is
arguing you're also taking money though with some of your
other policies around user pays, local governance and all sorts
of things, and so the net cost of living remains high.
(01:54):
What would you say to that?
Speaker 3 (01:56):
I just stated that, oh, my goodness, that is the
government that, through fuel on the inflation fire, created the
cost of loving crisis, and we're content to keep wasting
billions of dollars on wasteful programs across government to have
cried about every reduction we've made, and public servants in Wellington,
every wasteful program we've stopped, they've said no. The truth
(02:19):
is the opposition would rather they had that money than
New Zealanders if they voted against tax relief. And our
government is determined that hard working people and a cost
of lowing crisis should get to keep more of what
they earn. We're delivering it and labor never would have
done it.
Speaker 1 (02:36):
Okay, So Health New Zealand, here's a budgetary thing for you.
And you should know this because you run your handover
all all the budgets. Health New Zealand has gone from
running a surplus to running a huge deficit pretty much
within a year. And the question that everyone is asking
is where did it all go wrong? And there's so
many different theories. Maggie Arthur as say we hired too
many nurses, Others that saying you haven't funded enough. Where
(02:59):
do you think it wrong?
Speaker 3 (03:02):
Well, I think this was a botched merger. You'll remember
that the government decided to throw all the bees together
in the immediate aftermath of a pandemic. There were many
frontline health workers who said, hey, am you sure it's
really a great year to be doing this massive restructure,
and we've just come through the last crisis. And then
(03:22):
we as a government came in and found that the
board was struggling to even get oversight of what was
happening with the financial performance of the health system because
all of the systems had been thrown up in the
year and then rearranged. So we've acted fast to make
sure we had capable Crown observer put in, to make
(03:43):
sure that we had people with financial capability on the board. Ultimately,
that wasn't enough to give us confidence that this system
could be well managed, and so we've sent a commissioner
in and look, I just say, Andrew, this is all
about making sure the dollars go where they can make
the biggest difference, which is to patience. And we didn't
have the confidence that we could see where the dollars
(04:04):
were going, and we need to have that confidence.
Speaker 1 (04:07):
With with one health authority, of course, the fear was
your empire building and bureaucratic expansion. But with four regional
health authorities, don't you have four opportunities for empire building
and rampant bureaucratic expansion.
Speaker 3 (04:21):
Well, the promise for the efficiency that was what the
reforms will need to be about, reducing the layers of
bureaucracy and administration. We simply haven't seen that yet and
that's what we are demanding because we want actually the
voice of the nurse, the voice of the doctor to
be listened to in the system and where things need
to change, that they can change quickly. As it is,
(04:43):
there are so many layers of management that the health
system can't be as responsive as it needs to be,
and our approach is all about making it easier for nurses,
doctors to give patients the cares that need.
Speaker 1 (04:56):
Apparently Labour would like you to open the health books
just to try and prove who's right in all this argument.
Are you happy with that? Would you do that?
Speaker 3 (05:03):
Well, look, we do want to be upfront and transparent
about what's going on, and the challenge that we have
had over the past few months is getting that information
out of Health New Zealand so haphazard with the systems
that the outgoing government left it with and it's monitoring
of those systems that we have found it challenging to
get basic financial information and we're now on that case
(05:27):
and I think being transparent about that improvement in the
funding position over time is going to be helpful for
building trust and confidence.
Speaker 1 (05:35):
Good. Yes, And as Stephen Joyce said over the weekend,
you know this is the biggest single merger in New
Zealand's business history, eighty thousand staff. You know it dwarf
on terror. So yeah, they a lot got dropped.
Speaker 2 (05:48):
So let's like listen my observation as Andrew, they designed
it on paper and it was all a big theory
that they had no real plan to operationalize it in
a practical, real world way.
Speaker 1 (05:59):
Right, Let's get to the big one, which I haven't
asked first because you can't actually influence them. Should the
Reserve Bank drop interest rates? Look, I'm seeing wholesale interest rates,
you know, dropping. I'm seeing the retail bank say you
could actually do it in August not November. I know
you're not supposed to be able to influence, but you know,
could they?
Speaker 2 (06:19):
Yeah?
Speaker 3 (06:19):
Look, I've seen all that commentary. There are many banks
picking a reduction in the official cash rates earlier than
they were previously forecasting. Certainly there are a lot of
New Zealanders who want to see that. I've got to
stick in my lane, and my lane is all about
ensuring we've put the conditions in place that the Reserve
Bank can cut interest rates, and we've done that. That's
(06:40):
why we've been so careful about our spending, because we
don't want to be putting pressure on inflation. We've done
everything we can and you've seen that inflation number is
coming down now down to three point three, so it's
dropped pretty quickly and that's exactly what the Reserve Bank
needs to see in order that they can make changes
to the interest rates.
Speaker 1 (07:00):
All right, nick, I thank you so very very much
for your time and thanking you so much so that
I didn't even ask you about the greens of Darling
townic because I frankly think we're all over it. So
that thank you very much. That is got bitter things
to think about. Thank you so much. Nikola Willis is
the Finance Minister.
Speaker 2 (07:18):
For more from Hither Duplessy Allen Drive.
Speaker 3 (07:20):
Listen live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio
So the latest US inflation data looks quite promising and
people are starting to talk about rate cuts by the Fed.
Will there or won't there be? Or talk to Shane
Soley from Harbor Asset Management about that and Fletchers in
just a few months time. But first we're joined by
Alfinance Minister Nicola with us. Hello Nikola, Kling Andrew, big
day for you, lots of announcements you and Christopher talking
(00:22):
about the tax cuts they come into effect on Wednesday,
with two hundred and fifty thousand employers across New Zealand
taking a little less money from their employees pay packets.
Speaker 2 (00:32):
Do you reckon?
Speaker 1 (00:32):
Those employers are ready for this.
Speaker 3 (00:36):
It's a big week for New Zealand workers. We have
been working with payroll providers across the country to make
sure they've changed their system so that from Wednesday people
will only pay the right amount of tax and that's
less tax than they have been paying. So for New
Zealanders this means relief is coming and it's on track
to Wednesday.
Speaker 1 (00:56):
And would you advise employees though to double check their
pace the just in case their employers have not quite
crossed all the t's and dotted the.
Speaker 3 (01:04):
Eyes yeah, look, I think that's a good idea. Can
spare your pacelets with what it was the fortnight before,
make sure that you are being charged at lower rate
of text. We've been advised by payroll providers that their
confidence are made for changes. If for any reason there
was a problem and the text changes didn't fly through
to you, you can still get it in areas, so
(01:26):
you will get what's o to you eventually. I have
no reason to think that you won't be getting it
from the time you do now.
Speaker 1 (01:33):
While the tax cuts obviously give you money back, and
I've got many texts people saying how lovely I get
my money back, You obviously get money back from a
tax cut's inherent in the name. The opposition, though, is
arguing you're also taking money though with some of your
other policies around user pays, local governance and all sorts
of things, and so the net cost of living remains high.
(01:54):
What would you say to that?
Speaker 3 (01:56):
I just stated that, oh, my goodness, that is the
government that, through fuel on the inflation fire, created the
cost of loving crisis, and we're content to keep wasting
billions of dollars on wasteful programs across government to have
cried about every reduction we've made, and public servants in Wellington,
every wasteful program we've stopped, they've said no. The truth
(02:19):
is the opposition would rather they had that money than
New Zealanders if they voted against tax relief. And our
government is determined that hard working people and a cost
of lowing crisis should get to keep more of what
they earn. We're delivering it and labor never would have
done it.
Speaker 1 (02:36):
Okay, So Health New Zealand, here's a budgetary thing for you.
And you should know this because you run your handover
all all the budgets. Health New Zealand has gone from
running a surplus to running a huge deficit pretty much
within a year. And the question that everyone is asking
is where did it all go wrong? And there's so
many different theories. Maggie Arthur as say we hired too
many nurses, Others that saying you haven't funded enough. Where
(02:59):
do you think it wrong?
Speaker 3 (03:02):
Well, I think this was a botched merger. You'll remember
that the government decided to throw all the bees together
in the immediate aftermath of a pandemic. There were many
frontline health workers who said, hey, am you sure it's
really a great year to be doing this massive restructure,
and we've just come through the last crisis. And then
(03:22):
we as a government came in and found that the
board was struggling to even get oversight of what was
happening with the financial performance of the health system because
all of the systems had been thrown up in the
year and then rearranged. So we've acted fast to make
sure we had capable Crown observer put in, to make
(03:43):
sure that we had people with financial capability on the board. Ultimately,
that wasn't enough to give us confidence that this system
could be well managed, and so we've sent a commissioner
in and look, I just say, Andrew, this is all
about making sure the dollars go where they can make
the biggest difference, which is to patience. And we didn't
have the confidence that we could see where the dollars
(04:04):
were going, and we need to have that confidence.
Speaker 1 (04:07):
With with one health authority, of course, the fear was
your empire building and bureaucratic expansion. But with four regional
health authorities, don't you have four opportunities for empire building
and rampant bureaucratic expansion.
Speaker 3 (04:21):
Well, the promise for the efficiency that was what the
reforms will need to be about, reducing the layers of
bureaucracy and administration. We simply haven't seen that yet and
that's what we are demanding because we want actually the
voice of the nurse, the voice of the doctor to
be listened to in the system and where things need
to change, that they can change quickly. As it is,
(04:43):
there are so many layers of management that the health
system can't be as responsive as it needs to be,
and our approach is all about making it easier for nurses,
doctors to give patients the cares that need.
Speaker 1 (04:56):
Apparently Labour would like you to open the health books
just to try and prove who's right in all this argument.
Are you happy with that? Would you do that?
Speaker 3 (05:03):
Well, look, we do want to be upfront and transparent
about what's going on, and the challenge that we have
had over the past few months is getting that information
out of Health New Zealand so haphazard with the systems
that the outgoing government left it with and it's monitoring
of those systems that we have found it challenging to
get basic financial information and we're now on that case
(05:27):
and I think being transparent about that improvement in the
funding position over time is going to be helpful for
building trust and confidence.
Speaker 1 (05:35):
Good. Yes, And as Stephen Joyce said over the weekend,
you know this is the biggest single merger in New
Zealand's business history, eighty thousand staff. You know it dwarf
on terror. So yeah, they a lot got dropped.
Speaker 2 (05:48):
So let's like listen my observation as Andrew, they designed
it on paper and it was all a big theory
that they had no real plan to operationalize it in
a practical, real world way.
Speaker 1 (05:59):
Right, Let's get to the big one, which I haven't
asked first because you can't actually influence them. Should the
Reserve Bank drop interest rates? Look, I'm seeing wholesale interest rates,
you know, dropping. I'm seeing the retail bank say you
could actually do it in August not November. I know
you're not supposed to be able to influence, but you know,
could they?
Speaker 2 (06:19):
Yeah?
Speaker 3 (06:19):
Look, I've seen all that commentary. There are many banks
picking a reduction in the official cash rates earlier than
they were previously forecasting. Certainly there are a lot of
New Zealanders who want to see that. I've got to
stick in my lane, and my lane is all about
ensuring we've put the conditions in place that the Reserve
Bank can cut interest rates, and we've done that. That's
(06:40):
why we've been so careful about our spending, because we
don't want to be putting pressure on inflation. We've done
everything we can and you've seen that inflation number is
coming down now down to three point three, so it's
dropped pretty quickly and that's exactly what the Reserve Bank
needs to see in order that they can make changes
to the interest rates.
Speaker 1 (07:00):
All right, nick, I thank you so very very much
for your time and thanking you so much so that
I didn't even ask you about the greens of Darling
townic because I frankly think we're all over it. So
that thank you very much. That is got bitter things
to think about. Thank you so much. Nikola Willis is
the Finance Minister.
Speaker 2 (07:18):
For more from Hither Duplessy Allen Drive.
Speaker 3 (07:20):
Listen live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio
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