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The BulletinMay 31, 2024

Budget 2024 in 10 crucial reads

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In today’s extract from The Bulletin, a bumper budget reading list*. To receive The Bulletin in full each weekday, sign up here.

 

The top lines

We made it. After weeks of anticipation, we finally learned the details of the coalition government’s first budget. There were the anticipated tax cuts, confirmation of the government’s spending allowance and a sign of our fiscal future. Let’s start with a broad overview of Budget 2024. The Spinoff’s Joel MacManus was in the budget lockup at parliament and filed this report with all the key details. If you’re less familiar with the lingo, I also suggest you check out our “budget for dummies” guide by Shanti Mathias and Gabi Lardies, for those who “don’t do numbers”.

The hot takes

Our traditional Spinoff roundtable provided all the hot takes you could ever want, including commentary on the question of whether the tax cuts were “really fully funded” (more on that below). According to tax advisor Geof Nightingale, they might not be: “Despite the careful accounting to try and show that the tax changes are fully funded, the government is still budgeting for an overall deficit in 2025 of $7.1bn – which will be funded by borrowing,” he said. That seems to be a general theme in the commentary, though it’s an argument the government has roundly rejected. See also: Andrea Vance in The Post.

Meanwhile, the battle for the catchiest budget name saw Stuff’s Tova O’Brien label it the “beige budget” and Newshub’s Jenna Lynch call it the “as advertised” budget. Nicola Willis finally said, speaking to O’Brien, she’d call it the “Goldilocks budget”. Let me know in the comments what you’d call it, there’s a virtual chocolate fish for the catchiest moniker.

The analysis

Over on the Herald, Jenée Tibshraeny explained that the “thorn” in finance minister Nicola Willis’s side is that the economy is underperforming. She used a helpful analogy in explaining why the government will have to borrow more money than previously expected despite pledging to lower debt. “The situation is a bit like someone taking out an overdraft to cover their living costs, because they’ve taken a pay cut, and then stopping their Netflix subscription to pay for a new couch.” Writing for The Spinoff, Max Rashbrooke argues that the government’s short-term focus could risk long-term damage, and breaks down some of the spending decisions.

Tax, tax, tax 

If we’re being honest, the tax question was what made this year’s budget so interesting. It had been foreshadowed for a long time – well before last year’s election – but the government had remained coy on how exactly it was going to pay for its promise, and whether or not it would match the pre-election pledge. As Interest’s Dan Brunskill wrote, the budget tax plan was largely in line with National’s election promise. That means about $16 a week for the average working New Zealander, with more for households with children. While National can proudly say it kept its word, it also means Labour can attack the government for not doing enough – though that’s a slightly hard argument to justify when it has also criticised the concept of tax cuts in general. Economist Terry Baucher has some more in-depth analysis of the tax plan, also for Interest. If you just came here to find out how much you might save come July 31: the official Treasury tax calculator is here. Meanwhile, Stuff’s Tova O’Brien reports this morning on the number of households set to get the full benefit of the tax cuts – and it might be fewer than you expected.

Cuts, cuts, cuts

Joel MacManus described it as “hundreds of little cuts” – and he’s not wrong. There are 240 of them. Newsroom’s Emma Hatton broke down the “savings initiatives” in the public sector that allowed the government to follow through with its more costly promises, such as the tax package and the return of interest deductibility for landlords. “Some of those savings are small, others are bigger, some reduce the amount of funding for an activity, others stop an activity altogether. It all adds up,” Willis said. Some of the initiatives on the fiscal bonfire include a rejig of the fees-free scheme for tertiary students, with the final year of study now funded, and the return of $5 prescriptions. There’s also $17m from the Kermadec ocean sanctuary, $8m from contaminated sites and $20m from youth transitional housing.

Barbara Edmonds and Nicola Willis (Image: Tina Tiller)

The protests

Budget day was held against the backdrop of protests up and down the country, backed by Te Pāti Māori. Stuff’s Glenn McConnell reports this morning on what unfolded yesterday, including Te Pāti Māori’s call to form a separate parliament. Te Ao Māori News has more on budget cuts, noting there were just two recipients of money in the Māori affairs sector: Te Matatini and Whānau Ora.

What happened to those 13 new cancer drugs?

Willis said she “regretted” not being able to follow through on her election year promise of funding 13 new cancer drugs. They were meant to have been funded through the return of the $5 prescription fee, which is still being followed through on. Newshub’s Jenna Lynch spoke to some of those who will now be forced to keep paying thousands for their life-preserving treatments, and it makes for grim watching. RNZ’s Rowan Quinn has a similar report here. Willis said she remained committed to the policy, but won’t be drawn on when or how.

If you’re into graphs

If words are boring, here are some excellent data visualisations of Budget 2024, courtesy of RNZ and the Herald.

If you’re into podcasts

If words AND graphs are boring and you prefer learning about politics via the medium of audio, the annual crossover of Gone By Lunchtime and When the Facts Change is here to save the day. Listen as Toby Manhire and Bernard Hickey join forces to break down the budget.

The political aftermath

Part of the budget day theatre is the (very) lengthy debate, where political leaders from across the spectrum get the chance to dissect the budget – often with an added dose of personal insult. Joel MacManus sat through all three-plus hours of it, and appeared to lose his mind. I don’t envy him, but it’s a good read.

*I realise this was more than ten individual stories, but it’s more like ten themes…

Keep going!