Willis said the Government has allocated an operating allowance of $3.5 billion for the Budget.
“On taking office at the end of last year, we acted quickly with our mini-Budget to rein in Government spending – banking $7.5b of immediate savings and quickly setting up a programme to find $1.5b of ongoing annual savings across government agencies.”
She confirmed that the Government has “met that savings target”, but that it’s taken “a lot of work to get there.”
“New Zealand’s economy is in a tricky spot: inflation is too high and has been for almost three years, interest rates have soared and are biting homeowners and businesses alike, unemployment has risen and growth has stalled in four of the past five quarters.”
“This is all taking its toll on New Zealanders.”
In her speech, she acknowledged that “workers are hurting”, adding that the reality of their struggle is “impossible to ignore.”
“As I’ve put together my first Budget the people foremost in my mind have been those I’ve called the ‘squeezed middle’. The everyday Kiwis who’ve soldiered on through a prolonged cost of living crisis, who work hard and yet experience a seemingly endless struggle to get ahead, who worry about your mortgage and the unexpected bill, and yet don’t ask much from the Government – you want decent health services, good schools, law and order and a fair go,” she said.
“Workers have endured 14 years without any adjustment to tax brackets. For a median income worker that’s meant the average tax you pay has increased from around 15 percent in 2011 to around 21 percent today.”
“Everyday New Zealand workers have been left to wait in line while beneficiaries, government agencies and consultants got a boost.”
“In my first six months as Finance Minister, each Treasury update seems to be worse than the last. Sadly, I’ve learned to dread what comes out of the forecasters’ mouths when they come into my office. Given this, I certainly don’t expect any windfalls before Budget day. Instead, our Government has taken the responsible approach of preparing for a world in which the books could get worse before they get better,” Willis said.
“It is darkest before the dawn.”