Finance Minister Nicola Willis has confirmed this year’s Budget will include widespread tax relief for working New Zealanders.
Willis confirmed the move in a pre-Budget speech to the Hutt Valley Chamber of Commerce this morning.
“We will be sticking with Kiwis through the economic rough patch and ensuring you get to the other side, stronger and better-off than you are today,” she said. “I can confirm that our Budget will deliver further tax relief.
“Its focus will be income tax relief aimed at middle and lower-income workers. The relief will be meaningful, but modest.
“I’m very pleased to announce today that our tax relief package will increase the take-home income of 83% of New Zealanders over the age of 15 and 94% of households.
“We will responsibly deliver these lower taxes for low and middle-income families, by fully-funding them with a package of careful savings and targeted revenue measures.”
Willis’ National Party had campaigned on tax cuts amid cost-of-living struggles up and down the country.
She said this morning the Budget will focus on the “squeezed middle”.
“It is darkest before the dawn,” the minister told the audience, adding that it’s not “the time for an austerity Budget”.
“Increases to the current income tax thresholds will allow hard-working New Zealanders to keep more of what they earn, compensate for the impact of fiscal drag on average tax rates, and ensure there is a greater financial return from work.
“Tax relief will be good for our economy,” Willis said.
Public service cuts
The Finance Minister also addressed the Government’s widespread job cuts in the public sector.
“I want to put on the record my thanks and appreciation to the many public servants who’ve made this savings work possible,” she said.
“I have been struck by the professionalism and integrity of the men and women who’ve gone about finding savings across their agencies.
“New Zealanders should know many of the people who serve you wholeheartedly share your impatience to see better results for the taxpayer dollar,” Willis added.
Thousands in the public sector have already lost their jobs, with more to come.
‘A time for care, discipline and restraint’
Willis hit out at the previous government’s spending and said “obviously it won’t be a big-spending Budget”.
However, “you can expect a significant funding boost for the health system and targeted new investment in other essential frontline services including education, disability services and police,” she said.
“Our Government has set an operating allowance of less than $3.5 billion for this Budget.
“That’s less than the previous government’s allowance and it will be adhered to — a first in recent years.”