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PoliticsMay 30, 2024

Five budget day takeaways from chats with Nicola Willis and Barbara Edmonds


Ahead of the budget being unveiled at 2pm, The Spinoff speaks to finance minister Nicola Willis and her Labour Party counterpart Barbara Edmonds.

This is an extended write-up from today’s edition of The Bulletin, The Spinoff’s daily morning news wrap. To receive The Bulletin in full each weekday, sign up here.

Budget day is finally upon us, a chance for the government to outline its spending commitments for the next four years and the opposition to roundly criticise it. It’s a landmark event in the political calendar, but for many reasons this year’s is even more critical. It’s the first budget of the coalition government, meaning we’ll finally learn what election pledges will be followed through on. It’s also the first budget delivered by Nicola Willis, and the first budget as finance spokesperson for Labour’s Barbara Edmonds. 

Ahead of the big reveal, The Spinoff spoke to both Willis and Edmonds to ask them some quick-fire budget questions. Here are five key takeaways.

On the budget’s name

The government has foregone giving the budget an official “name” this year, with Willis saying that will come from commentators. But, she said, “It’s a budget to set the foundation for growth, it’s a budget that will deliver for working New Zealand, it’s a budget that’s responsible and a budget for the frontline.” Edmonds, meanwhile, said “so many” names had been suggested to her and “we will name this baby” later on today.

Asked for three descriptors of the budget, Willis said: “Delivery, responsibility and relief”.

And Edmonds, going off the pre-budget announcements alone, said: “Irresponsible, choices, and broken promises.” Four words, but three points so we’ll allow it.

On tax cuts

Willis said that “demonstrably” they was necessary. “It’s been 14 years since an adjustment to tax brackets in New Zealand. If you look across the developed world many countries automatically adjust their tax brackets to compensate for the effects of inflation.” There was also a challenge from the finance minister to Labour: “are they going to make some policy commitments?” Willis said the opposition has both opposed the reprioritisation across the public sector, meaning the widespread job cuts, but also didn’t want to see borrowing. “I’m interested to see how they’ll square that circle”. 

According to Edmonds, any tax cut would be “sensible” only if it met four criteria outlined by the late Labour finance minister Michael Cullen: it shouldn’t add to public debt, service cuts, inflation pressure, or inequality. In the house yesterday, Willis gave a succinct “yes” when asked if she was confident the budget wouldn’t exacerbate inflation or unemployment. “The devil will be in the detail,” Edmonds told The Spinoff. 

On today’s Toitū Te Tiriti strikes

A series of rallies, backed by Te Pāti Māori, are expected to take place around the country today to coincide with the budget. Willis said the timing wasn’t especially relevant “because frankly no one in that protest knows what’s in the budget”.

She added: “If we’re all honest with ourselves, it’s a good day for a protest because everyone knows there will be lots of cameras at parliament.”

Edmonds was less dismissive. “It won’t just be Māori on the forecourt of parliament, it will also be other people who are frustrated with the government and people that support the Māori kaupapa… they’ve chose budget day because it’s around sending a strong message to the government that they’re not speaking for them and the policies they’re putting through, including what will be in the budget, does not reflect their priorities.”

On who the budget serves

The Spinoff asked Willis how she would describe the budget to people who do not support the coalition government. “This budget is for you too,” she said. “Every New Zealander has a stake in a well-managed economy.” Everyone has been “suffering” over the last few years with high inflation and a cost of living crisis, said Willis, and so “getting those fundamentals right matters to everyone”.

Edmonds, who said her focus will be holding the government to account, said the budget and the economy is “all about people”. She added: “Politics aside, it doesn’t matter – it’s a technical thing.” Edmonds gets an hour in the budget lockup before heading into the house to debate it, but said she’ll spend the next days and weeks going through the budget line by line.

On budget cuts and budget surprises

The demise of first home grants came as a shock to many. Willis wouldn’t rule out further surprises in the budget, but said “we have worked to be consistent with the things we campaigned on”. On the first home grants specifically, Willis acknowledged that decision was one many hadn’t anticipated. “But I stand firmly by the principled view that we are a government that’s committed to making housing more affordable for New Zealanders. I will never forget, and I hope young New Zealanders never forget, the year house prices went up by 30%… one of the things we as a government have to do is ensure housing becomes more affordable over time.”

Edmonds said she was concerned about the potential end of financial mentoring programmes – “we know there has been no new funding and demand has obviously increased” – and financial budgeting services. “The other one is food banks – we have heard from food banks that they have not received any top-up despite the demand exceeding what they were funded for.”

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