Labour leader Chris Hipkins said every day New Zealanders got an insight into “what a shambles” the Government was, and today’s announcement on Budget priorities was “another whopper”.
He said the Government had taken a lot longer to release the Budget Policy Statement than governments usually did, and “can’t even answer the most fundamental question, which is how much money they’re going to spend in the Budget”.
That it hadn’t been specified in the Budget Policy Statement “shows the level of dysfunction” in the coalition Government, Hipkins said. He also believed the numbers were “unclear” because the Government couldn’t make their numbers add up.
“Tax cuts simply aren’t affordable.
“Nicola Willis was scathing about the fact that Labour, on occasion, changed the operating allowance between the Budget Policy Statement and when the Budget was delivered. Her way around that is … just to not set one at all.”
Business Correspondent Katie Bradford takes a look at the numbers.
Hipkins said that was a combination of “hypocrisy and incompetence”.
He said it was “absolutely irresponsible” to give tax cuts in the current economic climate and said the Government wasn’t being honest about what tax cuts would mean.
“It means deeper cuts to New Zealand’s public services — which as the disability community found out last week, actually directly affects people’s day-to-day lives.”
He said it also meant inflation would “stay higher for longer”.
“There’s simply no way they’re going to be able to meet all of the commitments that they put out there without increasing borrowing and without increasing money into the economy.”
Labour finance spokesperson Barbara Edmonds said Labour’s numbers had added up and were “fiscally prudent”.
“We wouldn’t be promising tax cuts.”
Green co-leader Chlöe Swarbrick said the “numbers simply don’t add up” on the Government’s tax plan and the Budget Policy Statement was “making us none the wiser”.
She said when the Government said it would increase revenue but not introduce new taxes “that’s a hint towards greater levies or otherwise”.
“The Government is choosing to double down on unequal and unfair tax settings.
“Even right-wing economists and commentators [are] saying the numbers don’t add up and that they should be delaying these trickle-down tax cuts so I think it’s pretty clear across the board — to everyone bar this three-headed hydra of a government — that they shouldn’t be moving forward in the direction that they’ve indicated.”
ACT leader David Seymour said a tight economy required “tough decisions and financial compromises”.
“New Zealanders have responded to rising living costs and mortgage rates in the responsible way — seeking out opportunities for savings on groceries and utilities, and skipping some nice-to-haves.
“With the economic weather now hitting home in the Government’s own books, it’s Wellington’s turn to show some discipline. Focusing on maximum value for every dollar spent will ensure we can continue to afford the most important services to New Zealanders, such as health and education.”
He said ACT’s presence in the coalition meant the Government was “going further in winding back low-value spending, even if it’s not going as far as ACT would like”.
Prime Minister Christopher Luxon said his Government could still afford tax cuts.
“Our tax relief plan will be fully funded. We’ve talked about raising revenue and also reprioritisations and that’s what we’re going to do.”
Asked if the quantum of tax cuts would be the same as what the National Party campaigned on, Luxon said: “We’re going to deliver tax relief for lower and middle income New Zealanders — you’ll have to wait for the Budget”.
The Government’s recent FamilyBoost announcement — which varied slightly from what National campaigned on — was, he said, an example of the Government recently delivering on a campaign promise.
He said the coalition was working “incredibly well” with “robust” discussions and said there was not tension among the parties about tax cuts.
“We’re working as a Government, one Government.”