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Happy King's Birthday weekend, Friend!

For the team at the Taxpayers' Union, Budget week is always the busiest of the year. This week's Taxpayer Update wraps up our coverage, and (more importantly) asks you, what did you think of Budget 2024 <[link removed]>?

I've had thousands of responses to our initial reaction to Budget 2024 – I can't recall receiving so many emails in just a few days! So we thought we'd do a poll of our supporters: <[link removed]>did Nicola Willis nail it, or did she fall short? <[link removed]>

<[link removed]> <[link removed]>

>> Click here to give your score out of ten on Budget 2024 << <[link removed]>

Why this year's Budget was more important than most ⏰

A lot of National Party supporters are making the point that the last government got New Zealand into the financial doo-doo and that we should lay off our criticism of this year's Budget.

Friend, personally, I consider the last government the worst in my lifetime. I sweated blood to get rid of them last year; through the election campaign we chased Chris Hipkins and Grant Robertson around with the Debt Clock <[link removed]>, Debt Monster, <[link removed]> held them to account on Three Waters <[link removed]>, the outrageous "Central Planning Committee <[link removed]>" proposal to replace the RMA – heck, we even launched a tongue-in-cheek removal company "Robbo's Removals" to highlight to voters just how bad things had become because of Grant Robertson. <[link removed]>

But we didn't work so hard to expose the last Government to elect a new one that, in its first Budget, is increasing overall government spending, and borrowing at an even faster rate. From a personal perspective, that is what made Thursday working through the materials in the Beehive lock-up so disappointing: this budget effectively locks in Grant Robertson's post-COVID so-called 'ballooned' spending.

SNAP Budget Poll: Kiwis want Nicola Willis to go further, faster, harder ⏩ ⏩ ⏩

<[link removed]>This morning's Weekend Herald covers our snap post-budget poll. And while the Nats have suggested we have been a little hard on Nicola Willis, it seems the majority of Kiwi voters agree with our broad critiques of Budget 2024.

On tax cuts, Kiwis want Nicola Willis to go further. A majority of respondents (51%) think that the $25 a week less tax for the average earner doesn’t go far enough and want to see further tax reductions. That's compared to just 34% who are opposed.

And on public spending too, the public thinks the Government needs to do more to cut the waste. By a ratio of nearly 2 to 1, Kiwis think Nicola Willis should get public spending as a share of the whole economy back below the 30%. This was a target set by Labour and the Greens no less, but next year the Government will only get spending down to 33%.

When it comes to tackling the deficit left by Grant Robertson, there is no appetite for increasing taxes (-30% net support) or increasing borrowing (-39%). Kiwis want the Government to focus on driving higher economic growth (+78%) and by getting tougher on decreasing spending (+49%).

In the interests of transparency, we've made the full results and breakdowns available over on our website. <[link removed]>

<[link removed]>Nicola Willis said that she won’t be able to deliver further tax reductions until she gets the books back into surplus in 2027/28. But these results demonstrate that New Zealanders would back her to reduce wasteful spending by much more and much sooner so that she can get the books back into the black and alleviate the tax burden even further next year.

The Weekend Herald coverage of the snap poll is in this news item <[link removed]> and Claire Trevett's column <[link removed]>.

Three cheers for tax relief! 🥲🥂

Nicola Willis says her tax relief package is "modest but meaningful". If you've not already checked what you're in line for, head over to The Treasury's tax calculator here. <[link removed]>

But the emphasis really is on the word "modest". For the average earner, the tax reduction only unwinds the effects of three years' worth of inflation and is just half of the $49 Nicola Willis needed to deliver to catch Kiwis up for the last 14 years of stealth tax hikes due to inflation tipping people into higher tax brackets.

But didn't Labour leave the books in a mess? 😡

Absolutely. No one would deny that Nicola Willis and the new coalition had a challenge on their hands after the reckless budgets of the last Government: 84 percent more spending since 2017, more than 18,000 extra bureaucrats, and borrowing $75 million every day.

But while the Government has made some progress, the savings they have delivered are pretty small fry. 

In cash terms, Nicola Willis will be spending more than Labour did in each and every year of this budget. And it's not likely that spending as a share of our economy will get down to the level set out in Grant Robertson's big-spending 2019 Wellbeing Budget until at least 2038. That's 14 years away.

Well this is awkward 😬

A friend of the Taxpayers' Union pointed us to a speech from last year where Christopher Luxon accuses then Finance Minister Grant Robertson of having an 'addiction to spending' not once, but ten times. Awkward for Nicola Willis that she's spending even more, despite the election mandate to, well, spend less.

We couldn't help ourselves... <[link removed]> 🤭

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So how is the Government funding the tax reductions? 🧮 🧐

As well as some limited savings and the scrapping of Labour white elephants like Three Waters and Auckland Light Rail, there are also a laundry list of new taxes, levies and rebates to balance the books. Some make more sense than others:

✅ User pays immigration levies: New immigrants to New Zealand will have to cover the full costs of their visas. This is a sensible move. Why should the Kiwi taxpayer subsidise the costs of people who want to move here?

✅ Climate Dividend: Some of the money raised through auctions of carbon credits in our Emissions Trading Scheme will be used to fund tax reductions rather than being used to fund corporate welfare for climate initiatives that don’t actually reduce emissions (any emissions reduced are just made available elsewhere under our fixed-cap scheme). 

🟠 More money for tax inspectors: More money will be given to IRD to chase after those who are not paying their tax bills in the hope that this brings in a lot more revenue than it costs. The proof of this pudding will be in the eating. 

🟠 Fees ‘free’ tuition in the final year: Rather than getting the first year of university tuition courtesy of the taxpayer, students will get the final year paid instead. This is an improvement as it ensures we aren’t covering the costs of dropouts but the middle-class welfare that is fees ‘free’ should be scrapped entirely. 

🟠 Taxing online casino operators: Collecting revenue through a gaming duty on online casino operators isn’t particularly bad, so long as it taxes them in the same way as in-person gambling companies.

❌ Removing commercial building depreciation: Businesses will no longer be able to offset the costs of deteriorating buildings. That means less investment in improvements to things like apartment blocks or improving the earthquake ratings of older offices. 

❌ Digital Services Tax: This will force big international companies to pay more tax in New Zealand but raises concerns that this may breach the spirit of free trade agreements and could lead to costly retaliatory tariffs that cost the country more than the tax revenue.

In the media: making the case for taxpayers 📺

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I joined RNZ's Morning Report yesterday <[link removed]> explaining why we were disappointed with the Budget and outlining why the Government needed to go further. Have a listen online here. <[link removed]>

Over on The Platform, Connor was chatting to Sean Plunket <[link removed]> and scored the Budget against our three key tests relating to tax, spending and debt, along with giving a few examples of additional areas he would like to see spending cuts.

<[link removed]>

Watch the interview here. <[link removed]>

Heather du Plessis-Allan doesn't hold back 😳

Over on NewstalkZB, Heather du Plessis-Allan covered our 'Mother of all Disappointments' reaction <[link removed]> on Thursday's Drive show before putting some of our main criticisms of the Budget to the Minister of Finance herself.

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Heather doesn't hold back and the interview with Nicola Willis is worth the time. Have a listen here. <[link removed]>

We were also covered in the NBR <[link removed]>and interest.co.nz <[link removed]>.

Our policy guru, James, gives his verdict ⚖️

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Writing for The Post on the evening of the Budget <[link removed]>, our Head of Policy, James Ross, gave his verdict on the Budget and what he thinks the Finance Minister ought to have done: 

Everything needed to deliver tax relief for the squeezed middle was ripe for the taking. But this Budget showed a Government which has buckled under pressure from the Wellington elite.

Kiwis needed a blockbuster Budget, but all they’ve got is a hackneyed reboot of Grant Robertson’s box-office flop.

Read the full piece over at Stuff's The Post website. <[link removed]>

And from the experts: what did two of NZ's leading economists think?🎙️

<[link removed]>

I sat down with two of New Zealand's top economists just back from the Budget Lock Up. Suffice it to say that neither was very impressed with he Budget and (just like the Taxpayers' Union, apparently! 😳 ) have probably been taken off Nicola Willis' Christmas card list. 😥

Dr Eric Crampton is a semi-regular guest on the podcast and is the Chief Economist at The New Zealand Initiative think tank <[link removed]>. 

Cameron Bagrie heads his own firm, Bagrie Economics <[link removed]>, specialising in economic research, analysis and consultancy. 

The podcast with Eric is here. <[link removed]>

The podcast with Cameron is here. <[link removed]>

Taxpayer Talk is also available on Apple Podcasts <[link removed]>, Spotify <[link removed]>, Google Podcasts, <[link removed]>iHeart Radio <[link removed]>, and every good podcast platform.

That's all from us for this Budget week. Enjoy your long weekend!


Jordan Williams
Executive Director
New Zealand Taxpayers’ Union. 

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Media Mentions:

KiwiblogThe Government must halt taxpayer funding of union staff <[link removed]>

NewstalkZB The Huddle: Is the closure of Smith & Caughey's a sign of bigger economic problems? <[link removed]>

NewstalkZBPolitics Thursday: Labour's Ginny Andersen and National's Chris Penk on the budget, protests and Kainga Ora <[link removed]> (23:07)

Greymouth Star MP spending questioned [print only]

RNZ RNZ Budget Day Special <[link removed]> (56:07)

The Post Budget 2024: A swing and a miss from Nicola Willis <[link removed]>The PostBudget 2024: Entrenching Labour's big-spending approach to government <[link removed]>

NewstalkZB Heather du Plessis-Allan – Full Show Podcast: 30 May 2024 <[link removed]> (38:50)

NZ Herald Budget 2024: Did the Government deliver what the country needs? <[link removed]> (13:08)

RNZ Taxpayers Union disappointed over Budget <[link removed]>interest.co.nzNicola Willis delivered on most of her promises but faces extremely tight budgets for years to come <[link removed]>

RNZ RNZ News at 7am, May 31 <[link removed]> (01:08)

Stuff Tova: Big Budget Special <[link removed]> (02:29)

Not PC Budget 2024: The Mother of All Disappointments <[link removed]>NBR Tax cuts, spending cuts but more spending and more borrowing <[link removed]> <[link removed]>KiwiblogGuest Post: Budget 2024 Roundup: What you need to know <[link removed]>

The Platform What Does the Budget Mean for Taxpayers? <[link removed]>NewstalkZBFriday Faceoff: Budget Special with former revenue minister Peter Dunne and Infometrics economist Brad Olsen <[link removed]> (09:30)

The Platform Economist Eric Crampton Breaks Down the 2024 Budget <[link removed]>RNZWeek in Politics: What will the government get out of Budget 2024? <[link removed]>

NZ Herald Budget 2024: Snap poll reveals voters’ views on Budget as Parliament rushes through tax cuts bill <[link removed]>

NZ Herald P <[link removed]>ost-Budget snap poll gives Nicola Willis a lukewarm pass - but the cancer drug fail grates - Claire Trevett <[link removed]>

The Post The cuts, the cash, the tax splash: What's feeding the budget? <[link removed]>The Post Willis' Budget has seized the financial agenda, but what's the plan? <[link removed]>




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