Liam Dann: NZ Herald business editor at large speculates about Budget 2025

We're two weeks away from Budget 2025, and the Government has been dropping hints about what we can expect.

Prime Minister Luxon recently confirmed the Government will increase total capital expenditure allocated in the upcoming Budget by $400 million.

NZ Herald business editor Liam Dann explains further.

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
There were two weeks away from the budget, so the

(00:01):
hints keep on dropping. The Prime Minister said the government
will increase total capital expenditure it's allocated in its upcoming
budget by four hundred million dollars. That money goes into
capital projects in health, education, defense, transport, portfolios and so on.
Liam dan Is, the Herald's Business editor at large, and
with us now, Hey.

Speaker 2 (00:17):
Liam, hi, here's it going.

Speaker 1 (00:19):
I'm very well, thank you. So why the significance of
the capital budget going up as what?

Speaker 2 (00:26):
Well, we had a little bit about we had from
Nikola Willis last week the operating budget and that was
a big cut to it, and that was that's the
money on hand to you know, basically pay wages and
keep the government functioning. And that that was pretty austere.
And so you know, Nicola Willis had called her speech
last week a growth budget and you're sort of scratching

(00:48):
her heads. Well, it doesn't look really gross orientated. So
the capital expenditure is a bit larger, but you know,
so that that's good, and there was talk about some
signific significant investment in infrastructure projects, which you know would
be great. I mean, that's the sort of money that
you can you can spend of course a few you've
got to make the projects happen, as we've found out

(01:10):
in the last few years. But you know, that's a
good thing. Just I just think we'd probably have to remember,
there's there's a big decisions that the government has to
make about how much of this bending on defense goes,
you know, in the next year or so and over
the next four years. So they've actually you know, said
they're going to up defense spending. I think it's something

(01:32):
like six point six point five billion or something like
that on top of what they're already doing. So that
would be from the capital allowance as well. So yeah,
there's there's you know, it's sort of like they're giving
us little clues as they go as to where this
budget's going. It's it's not going to be a big
key as well, we got this and that and this,

(01:54):
but it's you know, in terms of the jig saw
of how they navigate I guess this difficult fiscal period
and keep going for growth. It was a little bit
more detail and it's kind of interesting.

Speaker 1 (02:07):
Yeah, I suppose it is. I mean, so Chris Luckson's
done the speech today right where he's pumped up the
support for business. What are we expecting to see. Have
we got any idea at all what he's going to
do to make it easier for business to be able
to invest.

Speaker 2 (02:21):
Yeah, so he alluded to doing some some not not
huge things, but small things that would help businesses invest.
And I wonder whether it's the sort of the kind
of tax rebate on you know that allows you to
depreciate or you will take a tax to rebeat on
depreciation of assets, because I know that's one that say
the Employers and Manufacturer's Association has really lobbied hard for

(02:42):
over the years. It just means, you know, if to
encourage businesses to invest in new equipment and new technology, obviously,
you know, the minute you'd take it out of the shop,
it starts to depreciate. And every year it depreciates and
you can claim back some tax on the depreciation. Now
you can set there at different levels, so it may
not be a huge amount of money, but you know,

(03:04):
that's quite a positive thing because when we look at
New Zealand's productivity, we know that you know, the not
investing in the latest technology is one of the reasons
that we say that we're sort of behind on productivity.
If you look at countries like Germany so on, where
they use all the latest technology that helps drive productivity.
So that's the kind of thing the government could do

(03:25):
that would sort of pay a dividend in the end,
is you know, in terms of boosting the economy and
going for grass, which is their mantra obviously.

Speaker 1 (03:31):
Liam, it's always good to talk to you. Thank you mate.
That's Liam Dan, the Herald's Business editor at large.

Speaker 2 (03:37):
For more from Heather Duplessy Allen Drive, listen live to
news Talks. It'd be from four pm weekdays, or follow
the podcast on iHeartRadio.