WEBVTT - Reissue: Growth or austerity? Unpacking Budget 2025 and what it means for you 0:00:19.059 --> 0:00:22.099 Kyota at Chelsea Daniels here, host of the Front Page. 0:00:22.379 --> 0:00:25.259 We're taking awek breakover summer, but to help build the gap, 0:00:25.579 --> 0:00:28.699 we're re issuing some of our most significant episodes of 0:00:28.739 --> 0:00:32.019 twenty twenty five on behalf of the Front Page team. 0:00:32.138 --> 0:00:34.619 Thanks for listening and we look forward to being back 0:00:34.659 --> 0:00:44.298 with you on January twelfth, twenty twenty six. Kyota, I'm 0:00:44.379 --> 0:00:47.818 Chelsea Daniels and this is the Front Page, a daily 0:00:47.939 --> 0:00:54.899 podcast presented by the New Zealand Herald. The Coalition government 0:00:54.979 --> 0:01:00.259 has unveiled its second budget. Over twenty billion dollars in 0:01:00.379 --> 0:01:03.459 savings has been found over the next four years, more 0:01:03.499 --> 0:01:07.899 than half from the controversial changes to our pay equity scheme. 0:01:08.139 --> 0:01:12.259 There are changes to keyw saver contributions, means testing for 0:01:12.339 --> 0:01:17.339 support for parents, and a major new tax incentive for businesses. 0:01:17.499 --> 0:01:20.459 Finance Minister Nikola Willis has said that it is a 0:01:20.579 --> 0:01:24.978 responsible budget, while Labor has called it an austerity budget 0:01:25.059 --> 0:01:28.219 that leaves women out and is stealing from our kids. 0:01:28.378 --> 0:01:29.979 To break down what all. 0:01:29.818 --> 0:01:32.419 Of this means for you today on the Front Page, 0:01:32.459 --> 0:01:35.859 we're joined by Enzid Herald Business Editor at Large Liam 0:01:35.938 --> 0:01:42.659 dan So. Nikola Willis has called this a growth budget. 0:01:42.859 --> 0:01:46.338 Labour's gone with austerity. If you had to pick a 0:01:46.538 --> 0:01:49.979 pithy one word descriptive of this budget, Liam, what would 0:01:50.019 --> 0:01:50.418 you go with? 0:01:50.538 --> 0:01:53.898 Oh, good question, sort of a tightrope balancing act something 0:01:53.939 --> 0:01:56.178 like that. It's a little bit of austerity and a 0:01:56.179 --> 0:01:58.819 little bit of growth, some big cuts to some things, 0:01:58.979 --> 0:02:01.659 and there's a big roll of the dice, for example, 0:02:01.859 --> 0:02:04.339 in terms of hoping that business is going to really 0:02:04.339 --> 0:02:07.099 grab this tax cut and invest for growth. So that's 0:02:07.099 --> 0:02:09.459 probably it's probably where they really rolled the dice big 0:02:09.779 --> 0:02:11.499 on that one. You know, I was wondering where's the 0:02:11.499 --> 0:02:13.659 growth coming from. They still had growth budget at the 0:02:13.699 --> 0:02:15.859 top of all the press releases, but you know, six 0:02:16.019 --> 0:02:18.779 six billion, six point four billion over four years. It's 0:02:18.979 --> 0:02:21.099 it's a significant break, especially if you think of a 0:02:21.099 --> 0:02:24.899 small business someone who's having to upgrade all their tools 0:02:24.939 --> 0:02:26.899 and you know, their transport and all that sort of 0:02:26.939 --> 0:02:29.259 stuff every five years or so. To get a twenty 0:02:29.299 --> 0:02:31.939 percent break when they do that, it could be quite 0:02:31.939 --> 0:02:33.659 a substantial amount of money for them. So it's an 0:02:33.698 --> 0:02:36.899 incentive to upgrade all the equipment earlier, you know, and 0:02:36.939 --> 0:02:40.578 make themselves more efficient and drive some productivity, which we're 0:02:40.578 --> 0:02:43.459 always talking about. So that's the idea. The theory is 0:02:43.459 --> 0:02:45.538 that that will mean the businesses will invest more in 0:02:46.138 --> 0:02:49.538 up to date technology, latest equipment, and they'll be more 0:02:49.538 --> 0:02:52.579 efficient and workers will be more productive and the economy 0:02:52.619 --> 0:02:54.499 will benefit because of that. 0:02:54.659 --> 0:02:57.019 The key we saver changes are one of the big 0:02:57.138 --> 0:03:00.499 changes here. Hey, tax payers will now get two hundred 0:03:00.499 --> 0:03:03.698 and sixty dollars and seventy two cents from the government, 0:03:03.819 --> 0:03:07.659 down from five hundred and twenty one. In return, employees 0:03:07.739 --> 0:03:12.338 and employers default contribution will rise to four percent from 0:03:12.379 --> 0:03:15.059 three percent, which is being phased in over the next 0:03:15.099 --> 0:03:18.739 three years. What sort of impact could that change have. 0:03:19.059 --> 0:03:21.939 Yeah, so the net outcome is that people would save 0:03:22.099 --> 0:03:24.659 more over the period of time. I mean the risk 0:03:24.739 --> 0:03:27.698 with cutting that tax break is so it's been cut 0:03:27.739 --> 0:03:30.018 by half, so you know, it was five hundred dollars 0:03:30.059 --> 0:03:33.379 a year. You can say, well, you've lost two hundred 0:03:33.379 --> 0:03:35.619 dollars a year, but you compound that over twenty years 0:03:35.619 --> 0:03:37.179 and you can do some maths and say that that's 0:03:37.179 --> 0:03:40.499 actually potentially taking you know, twenty thousand or whatever out 0:03:40.539 --> 0:03:43.579 of people's long term retirement savings. But that is more 0:03:43.579 --> 0:03:47.339 than compensated for by the increase to the contributions which 0:03:47.379 --> 0:03:50.699 will come out of the employee's pocket and the employer's pocket. 0:03:50.739 --> 0:03:52.939 But hopefully, you know, half a percent at a time 0:03:53.419 --> 0:03:55.579 won't be too onerous. It's sort of a step in 0:03:55.619 --> 0:03:58.819 the right direction in terms of lifting those investment rates. 0:03:58.899 --> 0:04:01.179 In Australia, they're up to twelve percent or something. 0:04:01.219 --> 0:04:03.299 For thirteen Now, yeah, man, and. 0:04:03.259 --> 0:04:05.699 Obviously that would sound horrendous to suddenly take an extra 0:04:05.859 --> 0:04:07.819 nine or ten percent out of your pay and for 0:04:07.819 --> 0:04:09.899 employers to have to pay that. But if you if 0:04:09.939 --> 0:04:12.059 you step your way there, gradually you know they've got 0:04:12.059 --> 0:04:15.219 four trillion dollars in their superannuation scheme. And we look 0:04:15.219 --> 0:04:17.339 across the tessman and say, why are they richer than us? Well, 0:04:17.379 --> 0:04:19.178 it was because they've saved the money and they've they've 0:04:19.219 --> 0:04:20.058 got all this money. 0:04:22.699 --> 0:04:24.819 This is not austerity. 0:04:25.419 --> 0:04:30.459 In fact, it is what you do to avoid austerity 0:04:31.859 --> 0:04:37.299 because getting the books in shape ensures New Zealand has 0:04:37.339 --> 0:04:40.299 financial security and choices. 0:04:39.779 --> 0:04:40.659 Into the future. 0:04:41.099 --> 0:04:43.299 That's right, And as I am about to set out, 0:04:43.899 --> 0:04:47.738 savings in this budget have allowed us to make much 0:04:48.019 --> 0:04:53.219 needed investments in health and education, law and order and 0:04:53.259 --> 0:04:54.899 rebuilding our defense force. 0:04:55.099 --> 0:05:03.099 Yeah. Well, New Zealanders are notoriously bad savers and kei 0:05:03.179 --> 0:05:06.019 we savor for a lot of us is our main investments. 0:05:06.139 --> 0:05:09.178 So is this government telling people to pull their bootstraps 0:05:09.259 --> 0:05:10.739 up and put some more effid in. 0:05:11.099 --> 0:05:13.459 Yeah, I guess a little bit. You know, it's it's 0:05:13.499 --> 0:05:14.859 a bit of that. I mean, there's there's a bit 0:05:14.899 --> 0:05:17.859 of that all through this budget. It's definitely nature to 0:05:18.459 --> 0:05:21.419 Wellington Business editor said it called it the true blue budget. 0:05:21.539 --> 0:05:25.579 Is it is very much some ideological or political decisions. 0:05:25.579 --> 0:05:27.699 They are like no more dolls for the eighteen to 0:05:27.779 --> 0:05:30.699 nineteen year olds. Parents have to look after them or 0:05:30.739 --> 0:05:32.499 they have to have to go back to study. If 0:05:32.499 --> 0:05:34.259 you can't get a job, you've got to be studying 0:05:34.339 --> 0:05:37.459 otherwise you're in You're still responsibility of their parents to 0:05:37.499 --> 0:05:39.819 pay for That was quite a big change. 0:05:39.819 --> 0:05:42.099 If I was short sighted as well, because I mean 0:05:42.419 --> 0:05:45.779 going to UNI for some people immediately out of school 0:05:45.819 --> 0:05:48.459 that it isn't an option for some people or in 0:05:48.539 --> 0:05:50.099 some people's minds it isn't. 0:05:50.539 --> 0:05:52.939 No, I guess you know, there are other things you 0:05:52.939 --> 0:05:56.219 could be looking for apprenticeships or looking for more vocational 0:05:56.299 --> 0:05:58.019 training and things, but you know they have to make 0:05:58.059 --> 0:05:59.219 sure the pathways are there. 0:05:59.259 --> 0:05:59.699 To do that. 0:05:59.819 --> 0:06:02.579 My concern would be for some of those communities where 0:06:02.659 --> 0:06:05.179 unemployment is endemic and mum and dad are unemployed. But 0:06:05.579 --> 0:06:07.259 I can see you know that that true blue bit 0:06:07.379 --> 0:06:09.979 is that. I guess that from the right wing political perspective, 0:06:09.979 --> 0:06:12.459 it's to try and push people to get motivated and 0:06:12.499 --> 0:06:14.419 go and look after themselves. But it could be quite 0:06:14.419 --> 0:06:16.419 a shock in the short term for some people. 0:06:16.579 --> 0:06:19.819 The investment boost tax is a one as well. You 0:06:19.899 --> 0:06:23.259 mentioned it before. Business is allowed to deduct twenty percent 0:06:23.339 --> 0:06:26.419 of the cost of new assets immediately from their tax 0:06:26.459 --> 0:06:29.899 will income on top of normal depreciation. Essentially, this means 0:06:29.939 --> 0:06:32.659 a lower tax bill and it's believed that over twenty 0:06:32.739 --> 0:06:35.579 years this could increase the level of GDP by one 0:06:35.699 --> 0:06:39.859 percent and wages by one point five percent. How big 0:06:39.899 --> 0:06:43.539 of a deal is this change, given how long term 0:06:43.699 --> 0:06:44.859 those benefits are. 0:06:45.059 --> 0:06:47.259 I was just talking with an economist, Christina Long from 0:06:47.339 --> 0:06:49.419 enzi Are, and she wasn't that impressed with it, like 0:06:49.459 --> 0:06:52.219 in terms of the overall transformative nature of it, But 0:06:52.379 --> 0:06:55.619 I think it is. It's sort of a move in 0:06:55.659 --> 0:06:58.939 the right direction to try and lift the productivity of 0:06:59.259 --> 0:07:02.059 New Zealand. So we have this reputation for being having 0:07:02.059 --> 0:07:04.739 a low productivity rate in the country in this country, 0:07:05.099 --> 0:07:08.059 and there are many reasons, but one of the reasons 0:07:08.059 --> 0:07:10.499 that it has been identified is that we just don't 0:07:10.539 --> 0:07:15.659 invest to the same level in the latest technology, new equipment, 0:07:16.059 --> 0:07:18.619 the stuff that makes each worker be able to generate 0:07:18.619 --> 0:07:20.619 more output. You know, if you go to Germany then 0:07:20.659 --> 0:07:23.779 it's all robotic factories and all that sort of stuff. 0:07:23.859 --> 0:07:28.019 And so anything that incentivizes businesses to invest, it should 0:07:28.059 --> 0:07:31.539 incentivize them perhaps to take a risk, expand a bit more. 0:07:31.659 --> 0:07:33.339 That's what they want, that's what they talk about when 0:07:33.339 --> 0:07:35.859 they say going for growth. It will be interesting to 0:07:35.859 --> 0:07:38.859 see because that you know, employees and Manufacturers Association, Business 0:07:38.979 --> 0:07:41.379 end Z, they've been lobbying for this for a long time. 0:07:41.459 --> 0:07:43.579 They've finally got it. I think businesses will kind of 0:07:43.579 --> 0:07:45.139 have to put their money where their mouth is now 0:07:45.139 --> 0:07:46.739 and get out there and do it. You'd hope, and 0:07:46.979 --> 0:07:49.579 you'd hope that it has some payoff it. It's also 0:07:50.019 --> 0:07:51.939 going to be you're going to get that twenty percent 0:07:51.979 --> 0:07:54.459 break on your new buying a new forklift. Anyway where 0:07:54.499 --> 0:07:56.059 you get a twenty percent break on it, that is 0:07:56.139 --> 0:07:59.259 kind of a stimulus. So that's where people say this 0:07:59.299 --> 0:08:02.139 is an austerity budget or not, arguing that that this 0:08:02.219 --> 0:08:04.059 is a little bit of stimulus into the economy. So 0:08:04.339 --> 0:08:07.179 you know, one point whatever billion a year over four years. 0:08:07.299 --> 0:08:09.739 Well, basically the people who are holding off buying that 0:08:09.859 --> 0:08:12.499 forklift now have an incentive to do so more so 0:08:12.659 --> 0:08:13.299 than before. 0:08:13.539 --> 0:08:15.819 Yeah, and the true blue bit, the sort of the 0:08:15.899 --> 0:08:18.379 right leaning bit is saying, well, the stimulatory part, the 0:08:18.379 --> 0:08:20.059 bit where we putting a bit a bit cash back 0:08:20.099 --> 0:08:22.619 into the economy. You could put it in the pockets 0:08:22.659 --> 0:08:25.539 of consumers. Consumers might go out and just spend a 0:08:25.579 --> 0:08:27.579 little bit, They might drink and eat a little bit more, 0:08:27.619 --> 0:08:29.499 which is, you know, maybe good for the short term 0:08:29.619 --> 0:08:31.699 health of the economy and hospitality. But if you give 0:08:31.739 --> 0:08:34.779 it to the businesses and they invest in the machinery 0:08:34.419 --> 0:08:37.979 of the economy the business world, you know, that's a 0:08:38.059 --> 0:08:40.858 positive long term that means that they ultimately should be 0:08:40.939 --> 0:08:44.059 able to grow bigger, make more money, employ more people. 0:08:44.659 --> 0:08:46.578 You've got to believe, I mean, I'm trying to be 0:08:46.619 --> 0:08:49.019 a political here. You've got to believe that business and 0:08:49.659 --> 0:08:51.618 capitalism is going to do the job for you to 0:08:52.458 --> 0:08:55.378 back this, and obviously this government very clearly does. 0:09:04.458 --> 0:09:04.539 So. 0:09:04.578 --> 0:09:07.619 I reckon means testing is one of the themes of 0:09:07.659 --> 0:09:11.098 this budget. Hey, government, can we save a contributions are 0:09:11.139 --> 0:09:13.098 now going to stop if you earn one hundred and 0:09:13.139 --> 0:09:16.338 eighty thousand dollars a year or more and for the 0:09:16.379 --> 0:09:20.258 best start tax credits that will become income tested. So 0:09:20.299 --> 0:09:23.699 starting at families on seventy nine thousand dollars a year, 0:09:23.899 --> 0:09:25.539 is that a smart move from the government. 0:09:25.699 --> 0:09:29.019 Well, I mean some people argue that it's difficult and complex. 0:09:29.059 --> 0:09:31.098 You know, you're adding another layer of complexity to have 0:09:31.098 --> 0:09:33.259 to means test everything. I guess it seems like a 0:09:33.299 --> 0:09:35.618 really a fairly generous bar one hundred and eighty thousand 0:09:35.738 --> 0:09:38.419 when you're talking about five hundred dollars here or there. 0:09:38.539 --> 0:09:40.939 You know, I think if you could afford to top 0:09:41.019 --> 0:09:42.939 up your own key, we savior to some extent of it. 0:09:43.299 --> 0:09:43.939 That's the case. 0:09:44.299 --> 0:09:47.018 Rich people like getting more money, though. 0:09:47.498 --> 0:09:50.458 Everyone likes getting more money. Yeah, I wonder. I mean, 0:09:50.498 --> 0:09:53.098 it's interesting because they might get a bit better at 0:09:53.578 --> 0:09:56.499 you know, the machinery of means testing. And you know 0:09:56.498 --> 0:09:57.218 where does that lead? 0:09:57.299 --> 0:09:57.419 Well? 0:09:57.498 --> 0:10:00.299 Maybe maybe you know that they've talked about whether we 0:10:00.299 --> 0:10:04.819 should be means testing superannuation, so that if you're actually 0:10:05.059 --> 0:10:08.059 still learning while you're getting the retirement pension. You could 0:10:08.098 --> 0:10:10.779 be means tested, and that's considered quite difficult to do well. 0:10:10.819 --> 0:10:13.218 Perhaps if for governments some getting better at means testing 0:10:13.419 --> 0:10:16.299 because they're doing it for some other things, it becomes 0:10:16.338 --> 0:10:18.779 part and parcel of what they do. But yeah, they 0:10:18.779 --> 0:10:21.498 mean test already for student allowances and things like that, 0:10:21.539 --> 0:10:24.539 So I guess there is mechanisms in place. 0:10:24.819 --> 0:10:25.059 Yeah. 0:10:25.098 --> 0:10:28.259 I mean it's all about clawing back a little bit 0:10:28.259 --> 0:10:29.659 of money here and there, isn't it. I mean that's 0:10:30.059 --> 0:10:34.218 what the finance ministers had to do. They've clawed back 0:10:34.259 --> 0:10:37.898 a large chunk from the pay equity sort of reversal, 0:10:38.699 --> 0:10:41.258 and then they're clrawing back bits and pieces everywhere else 0:10:41.299 --> 0:10:43.138 to get a few billion here and a few billion. 0:10:42.819 --> 0:10:45.578 There seventy nine thousand dollars a year for a family. 0:10:45.618 --> 0:10:46.899 Though that's quite low, isn't it. 0:10:47.179 --> 0:10:47.459 It is? 0:10:47.539 --> 0:10:50.098 The argument is with a real right when government would 0:10:50.098 --> 0:10:52.419 even want that benefit there in the first place. So 0:10:52.779 --> 0:10:54.899 they've put a means test in so it's really just 0:10:54.939 --> 0:10:57.578 the poorest people, I guess that are going to get it. 0:10:57.699 --> 0:11:00.578 So last year's budget was all about putting more money 0:11:00.618 --> 0:11:03.739 into our wallets with tax cuts and other savings. Is 0:11:03.779 --> 0:11:06.459 there anything in this budget that looks like it will 0:11:06.498 --> 0:11:08.898 help ease the cost of living? Or have we moved 0:11:08.939 --> 0:11:11.819 on from that buzz term Now there's support for working 0:11:11.858 --> 0:11:14.659 for families and supercar holders, but it doesn't feel like 0:11:15.139 --> 0:11:16.699 a massive support budget. 0:11:16.819 --> 0:11:18.619 No, this is not a support budget. And I don't 0:11:18.618 --> 0:11:20.978 know you'd call it austerity or not. It's probably depends 0:11:20.978 --> 0:11:23.899 on your political colors, but it's it's certainly from from 0:11:23.899 --> 0:11:25.779 that point of view. You know, it was just that 0:11:25.858 --> 0:11:28.858 tax break for business, which may be a little bit stimulatory, 0:11:28.899 --> 0:11:31.978 but for ordinary consumers there isn't any stimulus. And and 0:11:32.498 --> 0:11:34.619 I don't want to kickstart the inflation again. They don't 0:11:34.618 --> 0:11:36.659 want to get back growing the economy just by putting 0:11:36.738 --> 0:11:39.059 money into it, is what they're saying. Well, that's what 0:11:39.179 --> 0:11:41.498 the last government did. We're not doing that. We need 0:11:41.498 --> 0:11:43.138 it to come from the ground up, needs to come 0:11:43.179 --> 0:11:46.219 from business and export earnings and all that sort of stuff. 0:11:46.259 --> 0:11:48.979 So yeah, I don't think we expected much support for people. 0:11:49.179 --> 0:11:52.059 I'm sure the government would argue that inflation is more 0:11:52.179 --> 0:11:54.738 or less under control. I know right now everyone's panicking 0:11:54.738 --> 0:11:58.099 about the price of butter and there's some cheese. Yeah, yeah, 0:11:58.218 --> 0:12:02.218 don't forget cheese. But basically, you know, weirdly, when dairy 0:12:02.259 --> 0:12:04.219 products are going through the roof like that, that's good 0:12:04.218 --> 0:12:06.779 news for New Zealand. I mean, there's money coming into 0:12:06.779 --> 0:12:11.259 the countries, and economists think that overall inflation will stay 0:12:11.618 --> 0:12:14.859 relatively subdued. A few of those key commodity products that 0:12:14.899 --> 0:12:17.339 are accepted, you know, that are having a bit of 0:12:17.338 --> 0:12:21.338 a moment, but the core inflation economy, because of higher unemployment, 0:12:21.379 --> 0:12:24.259 wages coming off, it's expected to stay pretty subdued. So 0:12:24.419 --> 0:12:26.659 nobody's ever going to say, hey, the cost of living 0:12:26.699 --> 0:12:28.578 is great, but it shouldn't be the same sort of 0:12:28.578 --> 0:12:31.458 issue that it was. And I don't think national would 0:12:31.578 --> 0:12:34.819 ideologically support the kind of just payments to people to 0:12:34.819 --> 0:12:36.538 cope with it anyway, because they would argue that that 0:12:36.578 --> 0:12:38.539 would just exacerbate the inflation. 0:12:38.699 --> 0:12:42.139 Well, you mentioned the pay equity changes that's dominated the 0:12:42.139 --> 0:12:45.219 political discourse for a few weeks. Now, now that we've 0:12:45.299 --> 0:12:50.258 learned that nearly thirteen billion over four years has been saved, 0:12:50.419 --> 0:12:52.779 is it a win for the government. So the average 0:12:52.819 --> 0:12:54.978 person on the street, that's a pretty big number to 0:12:55.098 --> 0:12:55.939 attach a saving. 0:12:55.978 --> 0:12:58.658 Two Yeah, well, I mean, I guess, you know, it 0:12:58.659 --> 0:13:01.578 has kind of opened up the budget for the government 0:13:01.738 --> 0:13:04.019 to do the things they wanted to do, So, you know, 0:13:04.019 --> 0:13:06.458 I think didn't David Seymour get in trouble for saying that. 0:13:06.738 --> 0:13:08.499 Brook van Velden saved the budget. 0:13:08.738 --> 0:13:09.939 Yeah, well it kind of has. 0:13:10.019 --> 0:13:10.179 Right. 0:13:10.179 --> 0:13:11.899 Whether it's a win for the government, well, we'll have 0:13:11.978 --> 0:13:13.659 to wait and see, because I think it's going to 0:13:13.738 --> 0:13:16.099 be a hot topic for a while to come, because 0:13:16.139 --> 0:13:19.419 you know, just just at a superficial level politically, money 0:13:19.419 --> 0:13:23.379 for businesses and it's coming out of the potential wage 0:13:23.419 --> 0:13:27.179 increases that could have gone to some of the poorest workers, 0:13:27.498 --> 0:13:31.059 female workers and female industries and often caring for the 0:13:31.098 --> 0:13:33.699 most vulnerable people in society. So you've got a pretty 0:13:34.019 --> 0:13:37.019 stark contrast there, and that's something for the opposition to 0:13:37.059 --> 0:13:39.059 work with and say, hey, you know, why are we 0:13:39.098 --> 0:13:41.378 giving this money to businesses. They're going to have to 0:13:41.419 --> 0:13:43.939 really sell this kind of productivity argument and it's not 0:13:44.498 --> 0:13:47.019 necessarily a simple, simple sales job. So I think the 0:13:47.059 --> 0:13:49.939 government will still be up against it politically for a 0:13:49.939 --> 0:13:51.778 few more weeks. I think they're hoping that it'll all 0:13:51.819 --> 0:13:53.578 just roll on and that maybe by the time we 0:13:53.618 --> 0:13:56.059 get to an election, but I've spoken to a few 0:13:56.098 --> 0:13:57.099 women who think it might not. 0:14:00.379 --> 0:14:03.699 This House has no confidence in the government because it 0:14:03.738 --> 0:14:06.539 has chosen to pay for its budget by cutting the 0:14:06.578 --> 0:14:12.659 future wages of working women. Mister Speaker Nichola Willis's pre 0:14:12.779 --> 0:14:17.499 budget's been got at half right. This was a scramble 0:14:17.819 --> 0:14:23.179 without the lollies. A budget that has scrambled the government's finances, 0:14:23.539 --> 0:14:26.259 tried a whole lot of smoke and mirrors to hide 0:14:26.259 --> 0:14:29.499 where their cuts are being made, and to try and 0:14:29.539 --> 0:14:32.739 confuse New Zealanders with the idea that they'll be better 0:14:32.779 --> 0:14:35.139 off when for a lot of key we families, this 0:14:35.259 --> 0:14:39.339 budget is nothing but bad news. 0:14:42.979 --> 0:14:47.099 Well, in terms of infrastructure, we've had some investments in 0:14:47.259 --> 0:14:52.219 rail military equipment, and billion dollars on hospitals upgrades and maintenance. 0:14:52.379 --> 0:14:55.499 Just under a billion dollars of capital and operating spending 0:14:55.579 --> 0:14:59.179 on new classrooms, two hundred and nineteen million on recovery 0:14:59.219 --> 0:15:02.419 work on cyclone damaged roads. Does this feel like a 0:15:02.459 --> 0:15:06.619 good infrastructure spend? I ask this only because the Herald 0:15:06.699 --> 0:15:10.579 editorial on Budget Day said that it is unacceptable for 0:15:10.699 --> 0:15:13.139 some of us to have seen our quality of life 0:15:13.259 --> 0:15:16.699 fall because of a lack of basic infrastructure. 0:15:17.019 --> 0:15:20.538 So if we're saving thirty billion dollars, shouldn't we be 0:15:20.579 --> 0:15:23.459 getting something a bit more out of it? Yeah, I mean, 0:15:23.459 --> 0:15:26.859 this is the spending is fairly basic. It's the kind 0:15:26.939 --> 0:15:30.739 of keeping things running, coping with the higher population, more 0:15:30.739 --> 0:15:33.579 people living in certain areas, needing, needing the schools, making 0:15:33.619 --> 0:15:35.619 sure that the hospitals can cope. And I imagine it's 0:15:35.619 --> 0:15:37.379 still going to be plenty of people saying that this 0:15:37.459 --> 0:15:39.658 is still going to be an incredibly tight budget for 0:15:40.419 --> 0:15:43.339 health and education regardless. So this is where the government 0:15:43.379 --> 0:15:46.219 is caught on the spending front. And the argument would 0:15:46.259 --> 0:15:48.819 come back to debt and borrowing because the tax takes 0:15:48.859 --> 0:15:51.499 down issues about how quickly it's going to come back 0:15:51.539 --> 0:15:53.979 and start putting more money into the government coffers. They're 0:15:54.019 --> 0:15:55.658 up against it, and so what are the options, Well, 0:15:55.699 --> 0:15:58.379 you cut or you borrow, And of course the opposition 0:15:58.459 --> 0:16:00.779 is saying, well, we could afford to borrow more, and 0:16:00.939 --> 0:16:04.579 depends who you talk to, you know we could, but 0:16:04.619 --> 0:16:07.898 that might be taking a higher level of risk, and 0:16:08.059 --> 0:16:09.939 some people feel like taking at the moment, we could 0:16:09.939 --> 0:16:12.459 probably technically afford to borrow more. But I think one 0:16:12.499 --> 0:16:15.579 of the issues that politically holds this government back and 0:16:15.619 --> 0:16:17.299 a lot of people who voted for them, is the 0:16:17.379 --> 0:16:20.499 sense that governments can actually spend that money. Well, so 0:16:20.659 --> 0:16:23.099 after what we've been through with all the borrowing and 0:16:23.139 --> 0:16:25.499 spending to get through COVID, but then all all sorts 0:16:25.539 --> 0:16:28.339 of other stuff that was planned on the infrastructure front 0:16:28.379 --> 0:16:31.658 and hasn't happened, people are skeptical about the ability of 0:16:31.699 --> 0:16:34.419 governments to deliver if they borrow more money. So I 0:16:34.459 --> 0:16:37.059 think that's a big part of the debate around borrowing more. 0:16:37.139 --> 0:16:38.739 You know, New Zealand is a country that has to 0:16:38.779 --> 0:16:41.219 be ready for the next earthquake, or the next major 0:16:41.379 --> 0:16:45.179 natural disaster, or the next big international shock. So I'm 0:16:45.299 --> 0:16:48.499 kind of pleased to see Nicola willis being prudent there 0:16:48.579 --> 0:16:51.379 and hopefully, you know, building for the future. I'm not 0:16:51.459 --> 0:16:54.339 as gloomy as as some other commentators. If you've talked 0:16:54.339 --> 0:16:56.939 to Matthew Hooton or someone like that, they think. 0:16:56.939 --> 0:16:59.499 It's pretty gloomy there all day livestream. 0:16:59.539 --> 0:17:02.859 Yeah, until the government is prepared to cut superannuation and 0:17:02.979 --> 0:17:08.139 tertiary healthcare, basically this country is heading towards bankruptcy. None 0:17:08.179 --> 0:17:11.139 of this stakes into account the problems that we've known 0:17:11.179 --> 0:17:14.218 about for thirty or forty years, that Kicken from twenty thirty, 0:17:14.619 --> 0:17:18.178 we're going to start that period about fifty percent of 0:17:18.219 --> 0:17:22.179 GDP work than we expected at the end of the 0:17:22.419 --> 0:17:26.259 era of reform under the Bulger, Shipley and Clark governments. 0:17:27.059 --> 0:17:30.299 He would argue that we're in real trouble, say in 0:17:30.339 --> 0:17:32.419 the next ten years, if we don't take some really 0:17:32.499 --> 0:17:35.979 radical action and cut back even harder. So the alternative 0:17:36.019 --> 0:17:38.579 is to bet on the growth. And so I think 0:17:38.619 --> 0:17:41.019 the government is rolling the dice, betting on business to 0:17:41.299 --> 0:17:44.499 grow this economy and betting I guess or hoping that 0:17:44.659 --> 0:17:46.979 you know that the boom and the primary sector keeps going, 0:17:46.979 --> 0:17:49.219 they can get tourism back. Yeah, those are the things 0:17:49.219 --> 0:17:49.979 that need to happen. 0:17:50.099 --> 0:17:52.419 Well, ultimately, Liam, do you think this budget is going 0:17:52.499 --> 0:17:53.979 to be a winner with voters or is it a 0:17:53.979 --> 0:17:55.179 bit too middle of the road. 0:17:55.459 --> 0:17:57.979 Yeah, it it could be a difficult cell. But it 0:17:58.019 --> 0:17:59.859 is the middle budget, you know, so that the first 0:17:59.859 --> 0:18:02.019 budget in power in the three year term, you've kind 0:18:02.019 --> 0:18:03.979 of got to deliver all these promises that you made, 0:18:04.019 --> 0:18:06.539 so that's pretty costly. Second budget is the one that 0:18:06.619 --> 0:18:08.859 might as well be the most unpopular budget, and it's 0:18:08.859 --> 0:18:11.139 the one that people might forget because you've got another 0:18:11.179 --> 0:18:14.219 one coming up in election year where you can maybe 0:18:14.259 --> 0:18:18.059 put something a little bit more like whatever. For Nicholas said, 0:18:18.059 --> 0:18:20.179 no lolly scramble is I'm not sure that budgets are 0:18:20.179 --> 0:18:22.619 meant to be a lolly scramble, but a lolly or two. 0:18:23.139 --> 0:18:23.299 Yeah. 0:18:23.339 --> 0:18:25.099 I think I think this budget probably is quite a 0:18:25.139 --> 0:18:27.459 hard sell. I mean, the business community will be quite 0:18:27.539 --> 0:18:29.779 happy and they'll be excited about it, and there'll be 0:18:29.819 --> 0:18:32.539 lots of discussion about growth and maybe maybe it's you know, 0:18:32.539 --> 0:18:35.899 from a confidence point of view, that will be quite good. 0:18:35.939 --> 0:18:38.059 But for the wider public, I think it's probably a 0:18:38.059 --> 0:18:38.499 tough sell. 0:18:38.579 --> 0:18:44.779 Thanks for joining us, Liam, cheers. That's it for this 0:18:44.899 --> 0:18:48.019 episode of The Front Page. You can read more about 0:18:48.059 --> 0:18:52.539 today's stories and extensive news coverage at enzidherld dot co 0:18:52.899 --> 0:18:53.459 dot MZ. 0:18:54.219 --> 0:18:56.539 The Front Page is produced by Ethan. 0:18:56.299 --> 0:19:00.059 Sells and Richard Martin, who is also our sound engineer. 0:19:00.579 --> 0:19:04.979 I'm Chelsea Daniels. Subscribe to the Front Page on iHeartRadio 0:19:05.179 --> 0:19:08.179 or wherever you get your podcasts, and tune in on 0:19:08.419 --> 0:19:11.459 Monday for another look behind the headlines.