Nicola Willis has delivered and saved her job after promising tax cuts during the election or she would resign. For the first time in a decade, we finally have a government that is going to take less from our pockets.
Tax cuts are locked in. Budget 2024 has set aside $14.7 billion to deliver tax cuts and rebates.
Delivering her first Budget, Finance Minister Nicola Willis has essentially stayed the course.
For median income earners, that means the promise of an extra $50 per fortnight will be delivered as of August. The Government had initially promised tax cuts in July, but Willis said officials told her payroll systems would need an extra month to adjust.
That $14.7b, across four years, includes a suite of tax promises: Cuts to income taxes, rebates for early childhood education fees, and tax cuts for landlords.
Stuff
Of course, the idiot media have said that to pay for the tax cuts the Government has to cut spending. They say that like it is a bad thing.
To pay for all of that, the Government has chipped away bits and pieces from almost every department. Spies, the Commerce Commission, climate change projects and university students who won’t finish their degrees will all face funding cuts, as well as over 200 other “savings initiatives” that have been found in the Budget.
But even after the multi-billion tax package and spending increases for public services such as health and police, as well as Shane Jones’ $1.2b regional infrastructure fund, the Treasury still expects the Government to return a modest operating surplus in 2027.
If the Government had followed Labour’s forecast operating allowances, surplus would not have been reached until at least 2030/31.
Stuff
Labour lived in the red, and spent like drunken sailors, fuelling harmful inflation along the way.
This government is being far more prudent and returning the books to a surplus at least three years earlier than Labour would have.
Willis announced her first Budget on Thursday saying: “I have kept my promise.”
“We are doing more with less,” she said.
Her election campaign estimate, that National’s tax plan would cost about $14.6b was only $100 million off, according to the Budget.
By finding long-term savings, this plan would also avoid entering into long-term Government debt to fund those tax cuts.
The Treasury, in its economic forecast, said “consolidation” – also known as ‘spending cuts’ – across the the public sector would help limit inflation despite the Government’s plan to deliver tax cuts.
“In the medium term, interest rates may be lower than would otherwise be the case,” the Treasury’s report said.
It predicted inflation would fall below 3% by the end of 2024, before staggering on for a few years. It would not be until “around mid-2026” that inflation would return to the target of below 2%.
Stuff
Again the myth that the government funds tax cuts: it’s a lie, but a lie told often. A tax cut means the government takes less from you and then has to cut their cloth accordingly. Just like any household.
Look, frankly, the economy is in the toilet, with businesses failing left right and centre. Tax cuts are needed because taxpayers know better than the government how to spend their own money.
And that’s the rub, anyone who opposes tax cuts is saying that they trust the government more than they trust themselves with how resources are best spent for them.
This budget was a good start, but we need to keep cutting the fat out of the state sector.
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