National Party leader Christopher Luxon is not impressed with Prime Minister Chris Hipkins' pre-Budget statements, and neither are ACT and the Greens.
Hipkins speech revealed little about what would be in this year's Budget, but was clear about what would not be included: Extra taxes.
The government was sticking to commitment to not introduce major new taxes in this term of Parliament: That meant no special levy to pay for Cyclone Gabrielle recovery, nor any new capital gains or wealth tax, Hipkins said.
Most of the cyclone and Auckland flooding recovery would be funded within Budget allowances with some borrowing making up the rest.
Hipkins said the Budget would be balanced with a focus on restraint while still delivering core services and investing in skills, science and infrastructure.
Luxon, speaking to reporters in Timaru after Hipkins' speech, categorised the focus on restraint as too slow and meagre.
"It's all a little too little, too late, frankly. This is a government that over the last five-and-a-half years has become the second-biggest-spending government in the developed world, it was the fourth-biggest government in printing cash, and it restricted and shut down our economy like nowhere else.
"Again, four months out from an election, Chris Hipkins has all of a sudden discovered that actually controlling and being disciplined spending of taxpayer money is actually important. Well, it's always been important."
He said he was sceptical about the government's speed in investing on the cyclone recovery, and an approach similar to that taken after the Kaikōura quake was needed.
Photo: RNZ / Nate McKinnon
"We had a set of money, we had clear outcomes, clear accountabilities and as a result ... actually it was delivered on time, in full and under budget."
The pre-Budget speech came a day after reports by Inland Revenue and Treasury found the country's wealthiest were paying tax at a much lower rate of their total income than most New Zealanders.
The median effective tax for those with a net worth of $50 million was calculated at 9.4 percent - well shy of the 20.2 percent paid by "middle wealth New Zealanders".
While Revenue Minister David Parker insisted the report was not an excuse to attack the rich, the reports prompted speculation Labour was preparing to revive a campaign to bring in a capital gains tax.
Luxon repeated earlier comments about it being a distraction from the necessary focus on the economy and cost of living for New Zealanders.
"It was horribly confusing. I mean you had David Parker come out yesterday and give a speech, and the two reports launched. He's had two years at it and spent $3.5 million and yet again it looked like the Labour Party and the Labour government were shaping for a capital gains tax, a wealth tax, an inheritance tax, a death tax, whatever.
"Then Chris Hipkins coming out this morning saying 'no, no it won't be happening' but then leaving it open for the next term of government ... that causes huge instability and uncertainty.
"It's a massive distraction because the real issue is the middle income people I'm talking with that actually are struggling to pay their mortgages, this doesn't help them one little bit.
"He should be like every other prime minister - including Jacinda Ardern - and said 'look, we're ruling it out while I'm prime minister', and that's what I haven't heard from him today. Let's be clear about why they are having to look at a bigger tax grab, they have to raise more taxes because they are spending like we have never spent in this country before."
'Not a single new idea' - ACT's David Seymour
ACT leader David Seymour was similarly critical of Hipkins leaving his options open on tax.
"The fact Chris Hipkins ruled out capital taxes for this term but did not rule out a capital gains tax during his time as prime minister as Jacinda Ardern before him did suggest this election will be a referendum on new taxes," he told RNZ.
"The ACT party says if you want more money in government, reprioritise what you've got now before you raid everyone else."
He said he was "astonished" to see Hipkins "use ACT's line that while everyone else is tightening their belts up and down the country the government must do the same".
ACT leader David Seymour Photo: RNZ / Samuel Rillstone
"The only issue is that even after the Covid bump in government spending this government will have increased expenditure by 54 percent in just five years ... the idea they would expand expenditure that much and then add new taxes as well, that would be truly extraordinary."
He said Hipkins' speech had not said much at all.
"You'd think that you'd start with something, a bit of a teaser for what's to come. I read the 3100 words in his speech, there's not a single new idea there. That doesn't augur well for New Zealand's future.
"No mention of crime, no new initiatives to deal with the costs of living, and as for our challneges around raising productivity and not losing people to Australia there is no serious initiative.
"This is all he can come up with? That tells us we need real change to take our economic challenges a bit more seriously."
National has long held a policy calling for income tax thresholds to be automatically adjusted for inflation. Hipkins also acknowledged after his speech the thresholds would need to change at some point.
Seymour however said inflation-adjusted thresholds were "fundamentally bad policy".
"It means that you have the same tax structure but you have less revenue from those early dollars, therefore you have to raise tax rates elsewhere on the income spectrum - and the bigger the gap between the bottom and top tax rate the more incentive there is to get involved in [tax] avoidance activities.
"It erodes the tax base and inevitably leads to higher tax rates higher on the income scale, and that makes the tax system more distortionary, it affects behaviour more because you want to declare income at lower levels some years and avoid paying higher taxes other years.
"So it's fundamentally bad policy to index tax brackets to inflation. In reality, people's taxes are too high and whole tax rates need to be reduced so people can get some relief."
'We're not holding our breath' - Greens' Marama Davidson
Green Party co-leader Marama Davidson also took a dim view of Hipkins' speech, focusing on the lack of changes to the tax system.
"If they have a majority now and they've still failed to actually make the changes to the tax system that will rebalance wealth in a way that is fair, then it really shows again that it is the Green MPs [who need to do that].
"We have already campaigned on this in successive elections and terms and we've made it a clear commitment for people to be able to choose us if these are the changes they really want."
Photo: RNZ / Samuel Rillstone
She said Wednesday's tax reports showed the super-wealthy were effectively paying a lower rate than nurses and teachers.
"Something is severely wrong there," she said. "People can see that it is unfair that accumulating massive unearned wealth is just padding the pockets of the super rich while eveyrone else is struggling."
"People who earn are paying tax. People who own unearned wealth are getting away with it. That's where the accumulation of unearned wealth is actually happening."
She was not optimistic about Labour championing that cause.
"We're not holding our breath for any other political party because we're already clear what needs to be done. We've already got those solutions."
