Mon. Jul 22nd, 2024

Tax cuts delivered results, but for some ‘barely a living’

By Vaseline May30,2024
Tax cuts delivered results, but for some ‘barely a living’

National has delivered on its promises of tax cuts in Budget 2024, but for some it will barely pay for a loaf of bread, the 1News team says.

As expected, Finance Minister Nicola Willis announced changes to tax brackets, which include a reduction in personal income tax for the first time since 2010.

Willis said the tax cuts were fully funded by savings and revenue initiatives and would not add to inflationary pressures.

1News political editor Maiki Sherman said National has delivered on its promises on tax cuts.

‘$102 per fortnight for a middle income household, if you couple that with the FamilyBoost, which National previously announced of $75 per week, that’s $150 per fortnight, that’s $250 (total), that’s what National promised. Nicola Willis has made that happen,” she said.

“However, those who don’t get as much are the minimum wage workers – and even less so: retirees and retirees. A (retired) couple only gets $9 a fortnight in tax cuts – that’s $4.50 a week, barely a loaf of bread.”

1News business correspondent Katie Bradford agreed Willis had done what she said she would do, but it meant some areas would be missed.

“She has to go through those departments line by line; there are so many programs that have been cut there,” she said.

“There are also a number of ministries there that receive no funding at all; they made those cuts and there is no funding for them in the budget. We are talking about the Ministry of Peoples of the Pacific, agriculture, there is a long road list.”

A tourist tax was increased, the fee waiver for first-year tertiary students was abolished in favor of final-year students, and for those going abroad with a student loan waiting at home, interest rates went up by about 1%.

Sherman said there was around $17 billion available for the healthcare portfolio – with Health Minister Dr Shane Reti announcing the next two healthcare budgets – so around $5.5 billion per budget.

There was also a lot of money for education and public order.

“I think that new construction in terms of classrooms, in terms of schools, was put on the back burner when the government first came in,” Sherman said.

“Hopefully there are some answers now for those directors and those families. And the public order budget will help pay for those 500 new frontline police officers.”

Gloomy economic forecasts

Bradford pointed out that overall, current economic information “paints a worse economic picture than we expected.”

There would be a surplus again in 2027/2028 and there would be less expenditure in the coming years.

All this comes with the condition that there are no more economic shocks, i.e. natural disasters or global economic turmoil.

Sherman said the coalition government’s first budget was largely as it was previously marketed: “no frills.”

Related Post