20 Dec 2023

Finance Minister on 'mini-mini budget'

From Checkpoint, 5:12 pm on 20 December 2023
Finance Minister Nicola Willis announced the government's "mini-Budget" on 20 December 2023.

Photo: RNZ / Samuel Rillstone

The country could afford the government's planned tax cuts, Finance Minister Nicola Willis has told Checkpoint.

The government found almost $7.5 billion in savings, it revealed in today's 'mini-Budget'. This comes from stopping a range of work the Labour government had under way.

"New Zealand has been in a cost-of-living crisis for some time, bank accounts have been under pressure, and we want to restore the balance. so that the government's tightening its belt and New Zealanders can keep more of what they earn."

She said the government was confident about delivering tax relief because "in just three short weeks, we've already found $7.5 billion worth of savings".

"We now have under way a set of concerted actions to drive more savings including across the public service, and including new revenue measures as described earlier: audits at the IRD, cost recovery for immigration levies, our gambling tax regime - with all of these things taken together, we're confident we can responsibly fund income tax reduction next year."

On the topic of childcare costs, Willis said the government recognised the significant pressure it put on families.

"Our preferred way of supporting families with childcare costs is our family boost childcare subsidy. This is a subsidy that will ensure that people can get a tax refund for their childcare fees no matter what age their child is, whether they're a year old, whether they're two years old, three years old or four years old."

Labour says the government's "nothingburger" mini-Budget shows Willis' claims of self-funded tax cuts do not add up.

Its finance spokesperson Grant Robertson said in a statement the "so-called" mini-Budget was nothing more than "a litany of distractions, delays and diversions which leave the country without any certainty or coherent economic plan".

Willis hit back saying: "It's not nothing. It really matters. This is the stuff that strengthens the economy and ensures New Zealanders can get ahead."

She reiterated that beneficiaries would see benefits "rise faster than they may have under the old system".

As for bringing the bright-line time-period test for rental properties back to two years from 1 July 2024, she said it was a matter of "fairness".

She said people should be building more houses and renting them out "because one of the challenges New Zealand has faced in recent years is rapidly rising rents".