Why borrowing is a key Budget issue; Taxpayers’ Union falls flat with ad celebrating mass job cuts - Audrey Young

Audrey Young is the New Zealand Herald’s senior political correspondent. She was named Political Journalist of the Year at the Voyager Media Awards in 2023, 2020 and 2018.

OPINION

This is a transcript of Audrey Young’s politics newsletter. To sign up for this newsletter or Friday’s subscriber-only Premium Politics Briefing, click here, choose your preferences and save. For a step-by-step guide, click here.

Welcome to the Politics Briefing as Nicola Willis gets set to reveal how meaningful her tax cuts will be and to reveal which of the 240 public sector programmes will be cut - along with nearly 4000 jobs.

One of the underlying questions on Thursday will be whether the Government has borrowed to fund the tax cuts. Normally you would not link borrowing to any single policy because the funding comes from the same pool. However, from the start of the election campaign, Willis made the link by insisting that there would be no extra borrowing for tax cuts and that they would be funded by reductions in Government spending and new revenue-raising measures.

There are two distinct views among economists I spoke to last night: some say that if the savings measures amount to more or higher than the cost of the tax cuts, then Willis can say she has not borrowed for tax cuts. That is the view of Brad Olsen, the principal economist for Infometrics. But others say that if you are borrowing more than was previously in the net core Crown debt forecasts, and you are providing tax cuts, then you are borrowing more than would otherwise be the case. That is the view of Cameron Bagrie of Bagrie Economics, and Craig Renney, the economist with the Council of Trade Unions.

Let’s not forget the tax promises that National took to the election:

On a personal note, Nicola Willis revealed the special arrangements she has planned for Budget day, which involve allowing her four kids time off school to watch mum deliver the Budget. They will also be making cookies, she told Newstalk ZB’s Heather du Plessis-Allan, who asked what special things she had planned.

“I don’t want the attention to be on my clothes. Who cares?” said Willis. “We’ve got an economy that needs to grow. It’s got high inflation and everyone in New Zealand has better things to focus on ... our Budget is going to focus on the things that really matter, not where I bought my dress.”

Meanwhile, I’ve done a piece explaining why the great celebrations that surrounded the groundbreaking pay equity claim of Kristine Bartlett and other care and support workers have fallen flat and why the unions are considering heading back to court.

Quote unquote

“It will be a Budget for every New Zealander who knew that our Government could, it should and it would do much, much more with much less” - Prime Minister Christopher Luxon on Thursday’s Budget.

Micro quiz

Name all the Finance Ministers since 2000 and how many Budgets they delivered. (Answer below.)

Brickbat

Goes to the Taxpayers’ Union for its triumphalist advertisement celebrating 4000 job cuts in the public service - especially the line “for the pencil-pushing seat warmers, and Flat White Marxists, it’s time to go and get a real job”. You might find it funny but losing your job is not a joke.

Bouquet

Goes to Education Minister Erica Stanford for expanding school-based teacher training and doing a good job of selling it.

Latest political news and views

Budget 2024: Finance Minister Nicola Willis has revealed that more than 240 public service programmes will be scaled down or scrapped in Budget 2024.

Budget 2024: National’s tax cuts will be the centrepiece of the Budget on Thursday. Here’s what we know about how they’ll be paid for so far.

Public spending: ACC chief executive Megan Main is flying business class to Europe on a taxpayer-funded work trip just as staff are being consulted on a proposal to cut almost 400 jobs.

State housing: Kāinga Ora has pushed back against the findings of the Sir Bill English review.

Pay equity: The gains that Kiwi care and support workers made in recognition of gender bias in their pay packets are being eroded, and many are back on minimum wage.

Public spending: A contractor and consultant are being paid to investigate a mega tunnel underneath Wellington.

Fast-track bill: Auckland Council is opposing the Government’s proposed legislation to fast-track infrastructure projects.

Opinion: Parliament is full of politicians with conflicts of interest, writes Simon Wilson - but most don’t seem to care.

Opinion: Nicola Willis’s first Budget won’t be judged by tax cuts but by the question of economic credibility, writes Claire Trevett.

Six-month review: It’s been six months since National, NZ First and Act came to power. The Herald’s Claire Trevett and Newstalk ZB’s Barry Soper assess their performance so far.

MFAT reprieve: Foreign Minister Winston Peters has saved the Ministry of Foreign Affairs and Trade from a round of painful cuts.

Pharma meetings: David Seymour has met representatives of three pharmaceutical companies since becoming responsible for drug-buying agency Pharmac.

Aged care: Parliament’s Health Select Committee will commence an inquiry into the provision of aged care.

Quiz answer: Sir Michael Cullen, 9; Sir Bill English, 8; Grant Robertson, 6, Steven Joyce, 1; Nicola Willis, 0.

For more political news and views, listen to On the Tiles, the Herald’s politics podcast.