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Happy Friday, Friend.

Just one week until we see what the new Government is really made of – in the form of Nicola Willis' first budget.

While the media have been in a tailspin about a few bureaucrats being moved on, your humble Taxpayers' Union has been making the case for the Government to deliver on its pre-election promises to cut wasteful spending, balance the books, and deliver real tax relief to all New Zealanders.

Here's a roundup of what that's looked like:

To fulfil her promise for tax relief, Nicola Willis needs to deliver at least $49/week next week 💰

Yesterday, we launched a billboard blitz to raise awareness that unless Nicola Willis delivers $49 per week for the average worker at next week’s budget, she's not delivering tax relief, she's shortchanging New Zealanders.

Thanks to the failure to adjust tax brackets for inflation since 2010, Kiwis have been forced into higher and higher tax brackets – even when earnings haven't changed in "real" (inflation-adjusted) terms. This is called "bracket creep" and "fiscal drag".

It has meant, for the average Kiwi worker, they're paying $49 per week more in tax, despite being no better off.

Someone on the average income today is paying $2,548 more in tax each year than someone on the same real income when tax brackets were last set back in 2010. New Zealanders have had 14 years of stealth tax increases and these should stop.

You can see our billboards here.

Less than $49/week isn't tax relief, it's shortchanging Kiwis 🤔

Our billboards throw down the gauntlet for the Finance Minister to deliver real tax relief for working New Zealanders.

But we have to make sure this isn’t just a temporary reset while continuing stealth tax hikes into the future that put us back in the same position in just a few years.

"No Taxation without Indexation" 🪧📣

An overwhelming majority of New Zealanders agree that tax brackets should be automatically adjusted for inflation – just like welfare payments are.

Our recent Taxpayers' Union – Curia poll asked Kiwis about the issue, and a massive 74 percent of voters agree with us on income tax bracket indexation.

Time to end stealth tax hikes 💸

No matter how you analyse the responses. there is majority support for ending the stealth tax "bracket creep" across all party votes, geographic locations, ages and genders.

Even Christopher Luxon expressed his support in a major budget speech this week for making adjustments, saying it was “lazy” not to do so!

Luxon's comments, along with our polling and commentary were covered by Dan Brunskill from interest.co.nz here.

The poll and policy even received endorsement from former National Party Cabinet Minister Steven Joyce in his NZ Herald column.

Joyce is candid about the fact that while he was a Minister, we didn't always see eye to eye. 🤭

I’m no unalloyed fan of the Taxpayers’ Union. It used to take more than occasional potshots at me when I was a Cabinet minister, casting me as a spendthrift adrift on a sea of profligacy.

So despite our past ‘potshots’ criticising his $1,248 taxi ride and corporate welfare extravagance:

[The Taxpayers’ Union] does seem to have cottoned on to something which has eluded many people. And that is, members of the New Zealand public are roundly sick of being fleeced by their Government.

He sets out the case for why New Zealanders need tax relief now, and why we must ensure that stealth tax hikes are halted forever:

If we don’t give the people with get up and go more opportunity to get ahead here in New Zealand, they will get up and go to somewhere more welcoming, where they can get ahead.

So voters want it, the Prime Minister wants it, and former Ministers do too. Time for Nicola Willis to deliver!

Government debt out of control: We need to Stop the Clock! ⏰

On Sunday, we sounded the alarm as New Zealand's Government debt hit $90,000 per household for the first time.

Over on Kiwiblog, our policy man, James Ross, set out just how bad things now are.

The Government is borrowing $75 million a day to pay for all the extra public servants that were employed during Grant Robertson's tenure as Minister of Finance. 

The average household is now stumping up about $4,500 a year just paying the interest on the debt. That’s more than the cost of the defence force, police, corrections and customs combined.

Head over to the Official New Zealand Government Debt Clock to see the tens of thousands of dollars being racked up on your behalf in real time. 

A glimmer of hope on Government debt? 🫣

While the politicians don't seem to appreciate the scale of the problem, at least New Zealanders do! Another poll this week shows 64 percent of Kiwis think the level of Government debt is too high.

Things can’t continue down the path laid by Grant Robertson ↩️

Government debt will continue to grow bigger and bigger until Nicola Willis gets the budget back in the black to Stop the Clock. And that's going to require her to cut wasteful spending much further and faster than she has indicated to date.

Our Campaigns Manager, Connor Molloy, spoke to The Platform about what is needed.

How to pay for tax relief: Get serious on wasteful spending ✂️

The only real tax cut is a spending cut. Anything else requires more borrowing and just pushes higher taxes into the future.

That means the only way to get a grip of the debt situation and provide the tax relief that Kiwis need is by tackling the culture of waste across government.

We say Nicola Willis' budget needs to cut wasteful spending, not just trim the edges.

What the media continue to ignore is that since 2017, public spending has increased by 84 percent. That's driven inflation, the cost-of-living crisis, and public services have got worse, not better!

Writing in yesterday's NZ Herald, Thomas Coughlan covers the details of a Taxpayers' Union – Curia poll that shows a very strong majority of Kiwis think that any tax relief or new spending announcements made in the budget should be funded by spending cuts. Thomas writes:

The result was reflected across the country, including in public servant-dominated Wellington where 54 per cent wanted spending cuts to pay for new initiatives compared to 17 per cent who wanted more taxation and 12 per cent who wanted increased debt.

So for all the hysteria, even a majority of [checks notes] Wellingtonians agree it's time to get public spending in check. Perhaps that's because Wellingtonians know public servants better than most... 

Taxpayer Talk: Eric Crampton on the growth in Government and Structural Deficit 🎙️

This week on our podcast is a special Budget edition with The New Zealand Initiative's Chief Economist, Eric Crampton.

Eric provides a voice of reason to counter the economic illiteracy often espoused by politicians. Eric and Jordan discuss what they think Nicola Willis should focus on in the Budget and what needs to happen to wind back the spending that was ratcheted up though COVID and then locked in by Grant Robertson.

Listen to the episode on our website | Apple Podcasts, | Spotify | Google Podcasts | iHeart Radio

Have a great weekend.

Yours aye,

Callum Purves Head of Campaigns New Zealand Taxpayers’ Union

Media Mentions:

Kiwiblog The loss making Te Huia

NZ Herald Latest poll: Government steady, Labour up 4 per cent; Christopher Luxon’s favourability surges

The Post Latest poll delivers morale boost for National-coalition Government

Newshub Green Party scandals reflected in new poll as Government maintains grasp on power 

NewstalkZB Afternoon Edition: 10 May 2024 – Poll 

The Post Pensioner, 85, looking for flatmates as insurance and rates cut deep

Otago Daily Times Centre-right parties ahead in poll

NewstalkZB Jason Walls: It's another bad week for the Greens

RNZ Political commentators Dale Husband and Brigitte Morten (02:44)

The Post Will Nicola Willis deliver tax relief, or just short change?

The Coromandel Informer LTP futile without accountability

Hawke's Bay App Video: Central Hawke's Bay District Council's personnel costs increase by more than 70 per cent in five years

interest.co.nz Indexing tax brackets to inflation has enormous support among voters but Treasury warns fiscal drag has been crucial to funding successive governments

NZ Herald Steven Joyce: The case for tax cuts - let’s give Kiwis some hope

The Post When the real politics of the Budget begin

Kiwiblog Council tries to stop fiscally conservative Cr from participating

The Platform Connor Molloy on Government Debts & New Zealand's Economy

Kiwiblog Guest Post: $90k Debt Day: A Wake-Up Call for Nicola Willis

RNZ 30 with Guyon Espiner | Jordan Williams

Kiwiblog Joyce on tax cuts

NZ Herald Voters, including Wellingtonians and Labour and Green supporters, back spending cuts to fund tax plan

The Post Luxon and Willis sing the darkness before dawn in chorus

NewstalkZB  Steven Joyce: Former Finance Minister says there's unlikely to be complete satisfaction with the Budget