CAPTIONS BY JAMES BROWN AND JESSIE PURU. CAPTIONS WERE MADE WITH THE SUPPORT OF NZ ON AIR. WWW.ABLE.CO.NZ COPYRIGHT ABLE 2024 TENA KOUTOU, GOOD AFTERNOON, AND WELCOME TO THIS 1 NEWS SPECIAL. THE GOVERNMENT HAS JUST PUBLISHED THE 2024 BUDGET. IT'S A CRITICAL MOMENT FOR THE COALITION, WITH NEW ZEALAND IN RECESSION AND PER CAPITA GDP IN DECLINE, THEY'RE TRYING TO BALANCE THE FISCAL PRIORITIES AND WISHES OF THREE PARTIES WHILE GUIDING OUR ECONOMY INTO MORE PROSPEROUS TIMES. OVER THE NEXT TWO HOURS WE'LL BRING YOU DETAILS AND ANALYSIS OF THE BUDGET. SHORTLY WE'LL TAKE YOU LIVE TO PARLIAMENT, WHERE FINANCE MINISTER NICOLA WILLIS WILL BE ADDRESSING THE HOUSE. HERE'S WHAT YOU NEED TO KNOW ABOUT THE TAX CUTS ANNOUNCED TODAY ` TAX CUT ` UP TO $102 A FORTNIGHT FROM LATE JULY PACKAGE HEADING INTO THE ELECTION, THEY SAID THAT TAX CUTS WOULD AFFECT PEOPLE RIGHT ACROSS INCOME BANDS AND HAVE CONFIRMED A TAX PACKAGE THAT WILL MEAN $102 A FORTNIGHT FROM LATE JULY. THAT IS EXPECTED TO REACH ABOUT 3.5 MILLION KIWIS. THE FAMILYBOOST PAYMENT HAS BEEN CONFIRMED. HEADING INTO THE CAMPAIGN, NATIONAL SAID THEY WOULD ADJUST INCOME TAX BRACKETS BY 11.5% FOR ALL BRACKETS, EXCEPT FOR THE VERY TOP BRACKET. THAT IS THE CONFIRMATION COMING THROUGH FROM THE BUDGET. WE EXPECT TO HEAR FROM NICOLA WILLIS AND A COUPLE OF MINUTES, BUT AS SHE DELIVERS THE BUDGET, DIRECTLY OUTSIDE ON PARLIAMENT'S FORECOURT, THOUSANDS HAVE GATHERED IN PROTEST. IT'S PART OF THE TOITU TE TIRITI MOVEMENT WHICH HAS SEEN PROTESTORS GATHER IN PUBLIC PLACES AND SLOW DOWN TRAFFIC AROUND THE COUNTRY. THOUSANDS OF PEOPLE HAVE TAKEN TO THE STREETS, GATHERING AROUND MIDDAY ON PARLIAMENTS FORECOURT. AND THE PROTEST HAS BEEN PROMOTED BY TE PATI MAORI. THE ORGANISERS SAY THEY ARE PROTESTING GOVERNMENT POLICIES WHICH THEY SAY DISCRIMINATE AGAINST MAORI. THEY HAVE BEEN DISRUPTING TRAFFIC IN VARIOUS CENTRES. WE WILL TAKE YOU LIKE TO PARLIAMENT'S FORECOURT. BUT FIRST, 1NEWS POLITICAL EDITOR MAIKI SHERMAN HAS BEEN IN A LOCKUP WITH TREASURY OFFICIALS GOING OVER ALL THE DETAIL. MAIKI, WHAT ARE THE BIGGEST ANNOUNCEMENTS IN THIS YEAR'S BUDGET? WELCOME TO BUDGET 2024, LIVE HERE FROM PARLIAMENT. THE TAX CUTS FROM NICOLA WILLIS HAVE BEEN DELIVERED. $102 PER FORTNIGHT FOR THE AVERAGE INCOME HOUSEHOLD. IF YOU COUPLE THAT WITH FAMILYBOOST, ALREADY ANNOUNCED BY THE GOVERNMENT, ECE SUBSIDIES OF $150 A FORTNIGHT, THAT IS $250 IN TOTAL. THAT IS THE TAX PACKAGE NATIONAL PROMISED ON THE ELECTION CAMPAIGN. THEY HAVE DELIVERED THAT TODAY. NICOLA WILLIS MAKING GOOD ON HER PROMISE. $17 BILLION FOR HEALTH. THIS IS A SIGNIFICANT INVESTMENT. INTERESTING, THOUGH, IT HAS BEEN COMMITTED OVER THE NEXT TWO BUDGETS, SO NOT JUST TODAY BUT THE NEXT TWO BUDGETS. THAT IS AROUND $5.5 BILLION PER BUDGET. THE OTHER THING TO NOTE IS $3 BILLION EACH WILL GO TO EDUCATION AND LAW & ORDER. THAT WILL HELP BUILD NEW SCHOOLS, NEW CLASSROOMS. WE SAW THE HANDBRAKE BEING PULLED BY THE GOVERNMENT WHEN THEY FIRST CAME INTO POWER, ERICA STANFORD AND HER WORK TO MAKE SURE THERE WAS MONEY FOR REBUILDS. IN TERMS OF LAW & ORDER, 500 NEW POLICE OFFICERS, THE NEW ZEALAND FIRST COMMITMENT IN THE COALITION AGREEMENT. MAKING GOOD ON BIG PROMISES THERE. LAST BUT NOT LEAST, $7 BILLION FOR INFRASTRUCTURE FUNDING. NICOLA WILLIS HAS SAVED HERSELF ANOTHER 7.5 BILLION ON TOP OF THAT, WHICH SHE WILL USE ALONGSIDE NEW ZEALAND FIRST AS THE INFRASTRUCTURE FUND TO BOOST PROJECTS ACROSS THE COUNTRY. NATIONAL ROADS OF SIGNIFICANCE AND SO ON. TO REITERATE SOME KEY ANNOUNCEMENTS AROUND THE TAX PACKAGE, THESE OTHER TAX CUTS NATIONAL CAMPAIGN ON LAST YEAR. THEY HAVE LIFTED TAX BRACKETS FOR THE FIRST TIME IN 14 YEARS. EACH LIFTED EXCEPT FOR THE TOP BY 11.5%. A WORKING COUPLE MAKING $150,000 WILL BE BETTER OFF BY $40 A WEEK BY COMBINING TAX CUTS AND THE CHILD CARE TAX CREDIT. HOW IS THIS LIKELY TO BE RECEIVED? OBVIOUSLY, AS YOU SAY, FOR MINIMUM WAGE WORKERS IT IS NOT AS GOOD AS IT IS FOR FAMILIES WITH CHILDREN OR A COUPLE OF HIGH INCOME EARNERS. HIGH INCOME EARNERS WILL GET SUBSTANTIALLY MORE THAN A COUPLE OF SUPERANNUATANTS. SOME PEOPLE WILL BE DISAPPOINTED WITH THE TAX CUTS. SOME WILL CELEBRATE. I SPOKE TO A NUMBER OF ECONOMISTS. ONE I SPOKE TO SAID NOW IS NOT THE RIGHT TIME, THE RESERVE BANK WOULD NOT BE HAPPY WITH THESE TAX CUTS TODAY, BECAUSE THEY COULD ADD TO INFLATION. THE FINANCE MINISTER REJECTS THAT. ANOTHER ECONOMIST SAID IT IS THE RIGHT TIME, BECAUSE IT HAS BEEN 14 YEARS. THANKS, MAIKI. SHE HAS BEEN A LOCK UP WITH TREASURY OFFICIALS. SHE IS MAKING HER WAY TO THE HOUSE, WHERE FINANCE MINISTER NICOLA WILLIS WILL PRESENT THE BUDGET. WE WILL TAKE YOU THERE. AS PART OF THE PROCESS OF DELIVERING THE BUDGET, SHE HANDS A COPY TO VARIOUS POLITICAL LEADERS AND FINANCE SPOKESPEOPLE. WE WILL HEAR FROM THOSE THROUGHOUT THE AFTERNOON. NICOLA WILLIS. FOR THE FIRST TIME IN 14 YEARS, HARD-WORKING NEW ZEALANDERS WILL GET TO KEEP MORE OF THEIR OWN MONEY THROUGH OUR GOVERNMENT'S TAX RELIEF. (APPLAUSE) WE ARE SHIFTING RESOURCES OUT OF THE BACK OFFICE OF GOVERNMENT AND INTO THE FRONT LINE. WE ARE INVESTING IN HEALTHCARE IN SCHOOLS AND POLICE. WE ARE PUTTING NEW ZEALANDERS' MONEY WHERE IT CAN MAKE THE BIGGEST DIFFERENCE. OUR COMMITMENTS ARE DELIVERED WITHIN AN OPERATING ALLOWANCE THAT IS THE LOWEST IN REAL TERMS SINCE STEVEN JOYCE'S BUDGET IN 2017. IN OTHER WORDS, THIS IS A FISCALLY RESPONSIBLE BUDGET THE MOST FISCALLY RESPONSIBLE IN SEVEN YEARS. MR SPEAKER, ON BUDGET DAY, IT IS EASY TO GET CAUGHT UP IN THE ANALYSIS, THE COMMENTARY, AND THE VOICES IN THE LOBBY. ACTUALLY, THAT IS NOT WHAT THE BUDGET IS ABOUT. THIS BUDGET IS FOR EVERYDAY PEOPLE GETTING ON WITH THEIR LIVES. THE MUMS AND DADS RUSHING THE KIDS TO DAYCARE OR KOHANGA, WAITING IN TRAFFIC AND WATCHING THE PETROL LIGHT FLASH AGAIN. THIS BUDGET IS FOR THE PEOPLE WHOSE DOORS I KNOCKED ON IN THE ELECTION CAMPAIGN WHO SAID $20 A WEEK WOULD BE THE DIFFERENCE BETWEEN STAYING ON TOP OF THE BILLS AND BEING IN OVERDRAFT. IT IS FOR THE MAN WHO TOLD ME HE PICKED UP A SECOND JOB DRIVING AND UBER TO PAY THE RENT. IS FOR EVERY NEW ZEALANDER FROM EVERY WALK OF LIFE WHO GIVE THEIR BEST AND WANTS A FAIR DEAL IN RETURN. THIS IS A BUDGET FOR THE SQUEEZED MIDDLE OF NEW ZEALAND THE SHIFT WORKERS, THE PEOPLE WORKING TWO JOBS, THE FAMILIES MAKING SACRIFICES FOR THEIR KIDS. PARLIAMENTS FOCUS TODAY AND EVERY DAY SHOULD BE THE RESULTS WE DELIVER FOR PEOPLE LIKE THEM. BECAUSE THE RIGHT MEASURE OF SUCCESS IS WHETHER GOVERNMENT IS MAKING A POSITIVE DIFFERENCE TO THE LIVES OF NEW ZEALANDERS AND THEIR FAMILIES. NOT HOW MANY TIMES IT CLAIMS TO CARE AND NOT HOW MUCH MONEY IT SPENDS. MR SPEAKER, THE CREATION AND PASSAGE OF A BUDGET EACH YEAR IS AT THE HEART OF STABLE GOVERNMENT. AND THIS BUDGET IS A TEAM EFFORT. IN PARTICULAR, I WANT TO ACKNOWLEDGE AND THANK THE ASSOCIATE MINISTERS OF FINANCE, DAVID SEYMOUR, SHANE JONES, AND CHRIS BISHOP, WHO WERE HEAVILY INVOLVED IN PUTTING THIS BUDGET TOGETHER. AND HAS BENEFITED CONSIDERABLY FROM THEIR IDEAS, ADVICE AND INPUT. THE OTHER BUDGET MINISTER IN THIS PROCESS WAS THE PRIME MINISTER. AND I AM GRATEFUL FOR HIS LEADERSHIP, SUPPORT AND WISE COUNSEL AS ALWAYS. MR SPEAKER, I WANT TO ACKNOWLEDGE HOW CHALLENGING ECONOMIC CONDITIONS ARE FOR MANY KIWIS RIGHT NOW. NEW ZEALANDERS EXPERIENCING A DIFFICULT DOWNTURN. THE RESERVE BANK RESPONDED BY RAISING INTEREST RATES. THE OFFICIAL CASH RATE WENT FROM 0.25% TO 5.5% AND HAS REMAINED THERE FOR A YEAR. THAT HURTS. I GET REGULAR UPDATES FROM THE TREASURY ABOUT THE STATE OF THE ECONOMY. AND WHAT IS APPARENT NOW COMPARED TO 6 MONTHS AGO IS THAT THE CURRENT DOWNTURN STARTED EARLIER, HAS BEEN DEEPER, AND IS EXPECTED TO LAST FOR LONGER THAN PREVIOUSLY THOUGHT. IN THIS ENVIRONMENT, I FEEL FOR FAMILIES AND BUSINESSES ACROSS THE COUNTRY DOING IT TOUGH. WHAT I CAN SAY TO THEM IS THAT BETTER TIMES LIE AHEAD. THE ECONOMY IS ROBUST AND IT WILL RECOVER. FORECASTS IN THE BUDGET UPDATE INDICATE THAT CURRENT WEAKNESS IN THE ECONOMY WERE REDUCE INFLATION AND LEAD TO A REDUCTION OF INTEREST RATES. TREASURY EXPECT THE UNEMPLOYMENT RATE TO PICK LEAS PEAK AT THE START OF 2025 ECONOMIC GROWTH IS FORECAST TO PICK UP OVER THE SECOND HALF OF THE YEAR INTO 2025. THE GOVERNMENT'S JOB IS TO HELP THAT RECOVERY, NOT HINDER IT. IN RECENT YEARS, BIG GOVERNMENT SPENDING HAS FUELLED INFLATION. AND HAS ALSO CAUSED A SIGNIFICANT DETERIORATION IN NEW ZEALAND'S FISCAL POSITION. THE OPERATING BALANCE, THE DIFFERENCE BETWEEN GOVERNMENT REVENUE AND SPENDING BEFORE GAINS AND LOSSES, HAS BEEN IN DEFICITS IN 2019-20. FOR THE MOST PART, THIS IS A RESULT OF CONTINUED SPENDING INCREASES. SOME OF THESE INCREASES WERE TEMPORARY AND RESPONSE TO COVER 19, BUT AFTER STRIPPING OUT LARGE EXPENSES AND ADJUSTING FOR THE ECONOMIC CYCLE, TREASURY ESTIMATES A STRUCTURAL OPERATING DEFICIT OF AROUND 1.5% OF GDP THIS FINANCIAL YEAR. STRUCTURAL DEFICIT IS A TECHNICAL TERM. TO PUT IT LESS FORMALLY, NEW ZEALAND HAS BEEN BORROWING TO PAY FOR THE GROCERIES. AND THIS BORROWING HAS CONTRIBUTED TO RAPIDLY RISING DEBT. IN 2017 NET CORE CROWN DEBT WAS UNDER 20% OF GDP. IT IS NOW OVER 43% OF GDP. AND THE SOLUTION IS CLEAR. REVENUE AND EXPENSES MUST BE BROUGHT BACK INTO BALANCE. DEBT MUST COME DOWN. THIS TASK IS CHALLENGING. IT HAS BECOME EVEN MORE CHALLENGING AS THE ECONOMIC FORECASTS HAVE DETERIORATED. COMPARED TO THE HALF-YEAR UPDATE, THE BUDGET UPDATE EXPECTS CORE CROWN TAX REVENUE TO BE LOWER BY AROUND 18.5 BILLION AS A RESULT OF LOWER GDP AND LOWER BUSINESS INCOME TAX. THAT IS A SIGNIFICANT REVENUE DOWNGRADE, LEADING TO A LOWER OPERATING BALANCE AND HIGHER DEBT. TO BRING REVENUE AND EXPENSES BACK INTO BALANCE, THE GOVERNMENT HAS A CHOICE ` IT CAN MANAGE ITS SPENDING OR I CAN RAISE ADDITIONAL REVENUE. GIVEN THAT CHOICE, THIS GOVERNMENT'S FOCUS IS SQUARELY ON MANAGING SPENDING. THE KEY TOP-DOWN TOOL FOR THIS IS OPERATING ALLOWANCES. THAT IS THE AMOUNT SET ASIDE FOR DISCRETIONARY NEW SPENDING IN EACH BUDGET. WE ARE SITTING TIGHT BUT REALISTIC OPERATING ALLOWANCES IN THIS BUDGET AND IN FUTURE BUDGETS. AND WE INTEND TO STICK TO THEM. I SAID IN THE BUDGET POLICY STATEMENT THAT THE FINAL OPERATING ALLOWANCE FOR BUDGET 2024 202 WOULD BE LESS THAN 3.5 BILLION, WHICH WAS THE ALLOWANCE SET BY THE PREVIOUS GOVERNMENT. THE FINAL ALLOWANCE IS IN FACT $3.2 BILLION. (APPLAUSE) THIS IS THE ALLOWANCE IN NOMINAL TERMS SINCE BUDGET 2018 AND THE LOWEST IN REAL TERMS, ADJUSTING FOR INFLATION, SINCE BUDGET 2017. OPERATING ALLOWANCES FOR BUDGETS 2025-27 WILL BE EVEN LOWER, AT 2.4 BILLION PER BUDGET. THESE ARE CONSIDERABLY LOWER THAN THE ALLOWANCES IN THE HALF-YEAR UPDATE SET BY THE PREVIOUS GOVERNMENT, AND LOWER THAN THOSE SET OUT IN NATIONAL'S FISCAL PLAN. BY COMPARISON, THE FINAL OPERATING ALLOWANCES FOR THE LAST TWO LABOUR BUDGETS WERE $5.9 BILLION IN 2022 AND $4.8 MILLION IN 2023 MR SPEAKER, MANAGING WITHIN ALLOWANCES OF 2.4 BILLION WILL BE CHALLENGING. SAVINGS AND REPRIORITISATION WILL BE A FEATURE OF FUTURE BUDGETS, JUST AS THEY ARE IN BUDGET 2024. THEY WILL BE BUSINESS AS USUAL. MR SPEAKER, THE FISCAL STRATEGY REPORT SETS OUT THE GOVERNMENT'S FISCAL INTENTIONS AND OBJECTIVES. THESE REMAIN AS THEY WERE IN THE BUDGET POLICY STATEMENT, WITH ONE ADDITION. THE GOVERNMENT INTENDS TO GET BACK TO SURPLUS IN 2027-28. (APPLAUSE) AND THIS IS ONE WE YEAR LATER THAN FORECAST. AS I HAVE MENTIONED, A WEAKER OUTLOOK FOR TAX REVENUE HAS FLOWED INTO LOWER BALANCES AND A HIGHER DEBT TRACK. THE BUDGET UPDATE SHOWS A $3.1 BILLION DEFICIT IN 2026-27. PROJECTIONS IN THE FISCAL STRATEGY REPORT SHOWED THE GOVERNMENT IS ALSO ON TRACK TO MEET ITS OTHER KEY OBJECTIVES ` TO REDUCE NET CORE CROWN DEBT TO BETWEEN 20% AND 40% OF GDP AND REDUCE EXPENSES TOWARDS 30% OF GDP. I WOULD LIKE TO ACHIEVE THESE GOALS FASTER THAN THE CURRENT PROJECTIONS SHOW. BUT THE GOVERNMENT IS NOT PLANNING AN AGGRESSIVE FISCAL CONSOLIDATION. WE ARE TAKING A DELIBERATE, MEDIUM-TERM APPROACH AND WE WILL NOT OVERREACT TO MOVEMENTS UP OR DOWN IN THE FORECASTS. WE WILL BE MAKING DIFFICULT DECISIONS AND TRADE-OFFS TO TURN THE FISCAL SITUATION AROUND, GET BACK TO SURPLUS AND REDUCE DEBT, BECAUSE THAT IS WHAT IS REQUIRED. BUT NEW ZEALANDERS SHOULD KNOW THIS ` WE WILL LOOK AFTER THEM ALONG THE WAY. MR SPEAKER, WHEN ANALYSING CHANGES IN THE FISCAL FORECASTS IT IS IMPORTANT TO DISTINGUISH BETWEEN ECONOMIC FORCES BEYOND THE GOVERNMENT'S IMMEDIATE CONTROL AND BUDGET DECISIONS THAT CLEARLY ARE IN OUR CONTROL. DOWNGRADES TO GDP AND REVENUE FORECASTS FALL INTO THE FIRST GROUP. THE WEAKER OUTLOOK FOR REVENUE REDUCES THE OPERATING BALANCE AND INCREASES DEBT ACROSS FORECAST.. BECAUSE ECONOMY IS SMALLER, GOVERNMENT SPENDING MAKES UP A LARGER PROPORTION. CONSEQUENTLY THE FISCAL STANCE WILL CONTINUE TO MAKE A GREATER CONTRIBUTION TO INFLATIONARY PRESSURES THAN PREVIOUSLY ASSESSED. THOSE ARE FACTS. THEY WOULD APPLY NO MATTER WHICH PARTY IS MADE UP THE GOVERNMENT. THEN THERE ARE THE GOVERNMENTS FISCAL POLICIES. THIS GOVERNMENT HAS REDUCED THE OPERATING ALLOWANCE IN BUDGET 2024 AND SIGNIFICANTLY LOWERED IT FOR THE NEXT THREE BUDGETS. OVERALL, THESE LOWER ALLOWANCES RESULT IN A CUMULATIVE TOTAL IMPROVEMENT OF APPROXIMATELY $5.5 BILLION ACROSS THE FORECAST PERIOD COMPARED TO THE ALLOWANCES IN THE HALF-YEAR UPDATE. THAT LOWER SPENDING WILL IMPROVE THE DEBT TRACK AND REDUCE INFLATIONARY PRESSURE COMPARED TO WHAT WOULD OTHERWISE BE THE CASE. IN ADDITION, MODELLING FROM THE TREASURY SUGGESTS THE IMPACT OF TAX REDUCTIONS OFFSET BY SPENDING IS ALSO LIKELY TO MODERATELY REDUCED PRESSURE ON INTEREST RATES. THE FISCAL FORECASTS HAVE DETERIORATED, BUT NOT AS MUCH AS THEY OTHERWISE WOULD HAVE IN THE ABSENCE OF THE GOVERNMENT'S BUDGET DECISIONS. THAT'S FINANCE MINISTER NICOLA WILLIS SPEAKING TO THE HOUSE AS SHE PRESENTS THE 2024 BUDGET ` THE FIRST OF HER TENURE AS FINANCE MINISTER. IF YOU'RE JUST JOINING US THIS AFTERNOON, HERE'S A QUICK REMINDER OF THE TOP POINTS FROM THE BUDGET. GOVERNMENT IS LEVERING TAX CUTS FOR WAGE EARNING NEW ZEALANDERS. THEY COULD REACH UP TO $120 PER FORTNIGHT FOR A HOUSEHOLD, FOR AN AVERAGE INCOME HOUSEHOLD, THERE WILL BE TAX RELEASE OF $102 PER FORTNIGHT AND A FAMILYBOOST CHILDCARE PAYMENT. AS WELL AS THAT, THE GOVERNMENT HAS ANNOUNCED $17B FOR HEALTH OVER FOUR YEARS. $3 BILLION FOR SPENDING FOR EDUCATION AND LAW & ORDER. $7 BILLION FOR INFRASTRUCTURE. NICOLA WILLIS SUGGESTED IT WOULD BE A KEY FOCUS, LET'S HAVE A LOOK AT SOME OF THE FISCAL PROJECTIONS FROM TREASURY TODAY. THESE HAVE JUST BEEN RELEASED AS PART OF THE BUDGET ` WE GET TO SEE THE FINANCIAL FORECASTS. THERE WILL BE SIGNIFICANT ATTENTION ON THESE. TREASURY FORECASTS UNEMPLOYMENT TO PEAK AT 5.2%. THEY EXPECTED THAT SIX MONTHS AGO, SO THAT FORECAST HASN'T CHANGED. THEY EXPECT A SURPLUS TO RETURN BY 2027-28. NICOLA WILLIS SUGGESTED THE SURPLUS MIGHT BE DELAYED. INFLATION SHOULD BE BACK TO WITHIN THE TARGET RANGE BETWEEN 1% AND 3%, AS SET BY THE RESERVE BANK BY 2025. WE ARE EXPECTING INFLATION TO BE BACK WITHIN THE TARGET BAND BY THE END OF THE YEAR. WE'RE EXTREMELY FORTUNATE THIS AFTERNOON TO BE JOINED BY TWO EXPERT PANELISTS ` ECONOMIST SHAMUBEEL EAQUB AND ANZ CHIEF ECONOMIST SHARON ZOLLNER. CHRISTMAS DAY FOR US ALL. LET'S GET YOUR FIRST TAKES. WE HAVE HAD A FEW MINUTES TO DIGEST. I DON'T THINK THERE ARE ANY HUGE SURPRISES. THIS ISN'T A GAME CHANGER FOR THE RESERVE BANK. THIS IS NOT OUT OF LINE WITH THE HEARTY UPDATE, IN TERMS OF STIMULUS. MAYBE A TIMING RISK, IN TERMS OF TAX CUTS ARRIVING SOON. CONSUMERS ARE NOT IN THE MOOD TO SPEND. A CHUNK WILL BE SAVED OR PUT ON THE MORTGAGE. AS OPPOSED TO BEING INFLATIONARY, WHICH WAS ONE OF THE CRITICISMS. IT IS A MISSED OPPORTUNITY TO BE AN EVEN BETTER FRIEND TO THE RESERVE BANK. TAX CUTS WERE NONNEGOTIABLE. THEY WERE CONSISTENT WITH HELPING THE RESERVE BANK, IF YOU LOOK AT THE CASH SPENT BY THE GOVERNMENT THEY WILL BE TAKING MONEY OUT SO IT IS A FISCAL NEGATIVE HEADWIND. THE RESERVE BANK WILL FIND IT IS HEADING IN THE RIGHT DIRECTION. IT IS THE DISTRIBUTION, BECAUSE THE CUTS ARE IN PUBLIC SERVICES IN WELLINGTON, AS OPPOSED TO INCREASES IN HOUSEHOLD INCOMES. THE TAX CUTS WERE AS EXPECTED, AS ANNOUNCED IN THE ELECTION CAMPAIGN. FOR POLITICAL REASONS, WE EXPECTED IT TO BE DELIVERED. FROM AN ECONOMIST'S PERSPECTIVE, THIS IS NOT THE RIGHT TIME TO BE GIVING TAX CUTS. WE SHOULD BE PRIMING THE PUMP OF THE ECONOMY, BOOSTING CAPITAL EXPENDITURE. WE HAVE A HUGE DEFICIT. THE TRACK FOR THE NEXT FOUR YEARS AS THEY WILL BE SPENDING LESS ON INFRASTRUCTURE THAN THEY HAD BEEN PLANNING. TO LOOK AT THE POLITICS, NICOLA WILLIS FOUR MONTHS HAS BEEN TRYING TO DOWNPLAY EXPECTATIONS. YOU UNDER PROMISE THEN OVER DELIVER. MANY EXPECTED THE TAX PROMISES MIGHT BE PARED BACK, BUT THAT IS NOT THE CASE. THE DIFFERENCE WAS WHEN JOHN KEY DID IT HE DELAYED IT, BECAUSE THE TIMING WAS NOT RIGHT. THE ECONOMIC CONSEQUENCES WERE TWO SIGNIFICANT. PEOPLE ACCEPTED THAT. BUT FOR THIS GOVERNMENT, IT WAS THE BASIS FOR THE ELECTION CAMPAIGN, AND WOULD HAVE BEEN DIFFICULT TO BACK AWAY FROM. MAYBE THE ONLY CHANGE FROM THE PRE-ELECTION PROMISES, THEY WERE PLANNING TAX CUTS ON JULY , JULY 1, DELAYED 30 DAYS. WE NEED TO GET THE GOVERNMENT BOOKS IN ORDER. IF YOU LOOK AT WHAT HAS HAPPENED TO THE PRICE LEVEL SINCE 2010, IT HAS GONE UP 40%. THE LAST TIME TAX BRACKETS WERE CHANGED. SO IN THAT REGARD, THIS IS WELL OVERDUE. THIS ISN'T A BIG TAX CUT RELATIVE TO THE SETTINGS THEN. I RESENT THAT THE INCREASES IN TAX BRACKETS IS SEEN AS A GIFT FROM POLITICAL PARTIES. IT SHOULD HAPPEN AS OF RIGHT. WE SHOULD INDEX TAX BRACKETS. IT IS RIDICULOUS THAT EVERY FEW YEARS WE HAVE A POLITICAL STORM, THAT WE HAVE GIVEN YOU A TAX CUT. WE WILL HAVE AN OPPORTUNITY TO PUT THOSE CONCERNS TO THE FINANCE MINISTER. NICOLA WILLIS WILL JOIN US. STAY WITH US. WELCOME BACK TO THIS ONE NEWS Q AND A SPECIAL. IN THE NEXT HALF HOUR, WE WILL BE HEARING FROM POLITICAL LEADERS ACROSS THE POLITICAL SPECTRUM AS WE DISCUSS THE DETAIL OF THE TWENTY20 FOR BUDGET. CHLOE SWARBRICK IS THE CO-LEADER OF THE GREENS. SHE'S WITH US LIVE FROM PARLIAMENT. WHAT ARE YOUR THOUGHTS ON THE BUDGET? THERE'S NOT TOO MANY SURPRISES. UNFORTUNATELY, THAT $2.9 BILLION FOR LANDLORDS CATERS TO THOSE AT THE TOP AND GIVES CRUMBS TO EVERYBODY ELSE. SHE SAID THOSE AT THE TOP PAYS LESS THAN HALF OF THE AVERAGE NEW ZEALANDER. IN TAKING UP BLOWTORCH TO CLIMATE ACTION. THEY ARE CUTTING FUNDING FOR GOVERNANCE OF THAT MARKET. IT DOESN'T ADD UP. WHAT DO YOU MAKE OF THE INCOME TAX CHANGES? NOT ALL TOO MUCH TIME TO MEANINGFULLY DIGESTS THAT. WHAT WE WOULD SAY, IS THAT AGAIN, THEY HAVE SIMPLY CHOSEN TO REINJURY AND THOSE DEEPLY UNFAIR, UNEQUAL AND UNPRODUCTIVE STACK SETTINGS. IT IS QUITE INTERESTING AND THE FISCAL STRATEGY REPORT, THE MINISTRY CHERRY PICKING THOSE STATEMENTS. IF YOU WERE TO CONSIDER THE TAX CHANGES THAT HAVE BEEN CONFIRMED TODAY, THIS IS THE FIRST TIME THAT THOSE INCOME TAX BRACKETS HAVE BEEN CHANGED SINCE 2010. IS IT FAIR FOR SOMEONE'S INCOME TO BE TAXED IN THE SAME WAY AS IT WAS IN 2010 GIVEN HOW WAGES HAVE GROWN IN THAT TIME? I THINK THE CORE POINT REMAINS THAT WE HAVEN'T FUNDAMENTALLY UNFAIR TAX SYSTEM IN THIS COUNTRY. IT UNDER TAXES THOSE THAT EARNED INCOME BY CAPITAL GAINS. WE MAKE THE POINT THAT THERE ARE OPPORTUNITIES FOR THE GOVERNMENT TO LIVE UP TO IT'S RHETORIC. WHAT DO YOU LIKE IN THE BUDGET? (LAUGHS) HONESTLY, SCANNING THROUGH THE PAGES IN THE LOCK-UP TODAY, IT WAS PRETTY HARD TO FIND TOO MUCH. WE SEE SLASHING FOR ECO-FUNDING, SLASHING FOR MARKET GOVERNANCE FOR THE EMISSIONS TRADING SCHEME, AND WE ARE SEEING THAT THE GOVERNMENT IS SLASHING THE LIKES OF THE ANTARCTICA PROGRAM. IT DOESN'T REALLY STICK UP FOR A PRODUCTIVE VISION OF THIS COUNTRY FOR AN INCLUSIVE VISION OF THIS COUNTRY. IT IS NOT TOO HARD AND VERY IMAGINATIVE TO FIRE UP THE SHREDDER. IF YOU COULD SLIP YOUR WAY INTO THE NEGOTIATIONS, ONE THING THAT YOU COULD CHOOSE TO HAVE INCLUDED IN THIS YEAR'S BUDGET, WHAT WOULD IT BE? IT WOULD BE FIXING THE TAX SYSTEM. WE TOOK TO THE ELECTION A WEALTH TAX THAT WOULD PRODUCE REVENUE TO PAY FOR CLIMATE ACTION. FREE DENTIST VISITS AND TREATMENT FOR EVERYONE IN THIS COUNTRY. THANK YOU FOR YOUR TIME. WE ARE GOING TO BE HEARING FROM OTHER POLITICAL PARTIES. A QUICK REMINDER OF THE TOP LINES IN THIS BUDGET. TAX RELIEF WILL GIVE THE AVERAGE INCOME UP TO HUNDRED TWO DOLLARS PER FORTNIGHT. HOUSEHOLDS WITH CHILDREN WILL GET ON AVERAGE $78 PER FORTNIGHT WHILE WORKING AGE NEW ZEALANDERS WILL RECEIVE 32FORTNIGHT HOUSEHOLDS WITH CHILDREN WILL GET ON AVERAGE $78 PER FORTNIGHT WHILE WORKING AGE NEW ZEALANDERS WILL RECEIVE $32 PER FORTNIGHT.. INTERESTING, INSTEAD OF PER WEEK, THE GOVERNMENT HAVE CHOSEN TO RELEASE THE FIGURES ON A PER FORTNIGHT BASIS. AS WELL AS THAT $17 BILLION AS ANNOUNCED IN HEALTH SPENDING. AND $3 BILLION HAS BEEN ANNOUNCED IN EDUCATION, LAW AND ORDER. THE NEW MONEY ANNOUNCED, OR NEW SPENDING ANNOUNCED, IS $3.2 BILLION... NICOLA WILLIS HAS GONE FOR A SMALL OPERATING ALLOWANCE BUT SHE IS FORECASTING SIGNIFICANTLY SMALLER OPERATING ALLOWANCES OVER THE NEXT COUPLE OF YEARS. NICOLA WILLIS IS EXPECTING TO HAVE OPERATING ALLOWANCES, SO NEW SPENDING, REDUCED BY FIVE AND A HALF BILLION DOLLARS. THAT IS REALLY SIGNIFICANT. THE GOVERNMENT HAS MADE ANOTHER NUMBER OF ANNOUNCEMENTS. TO GET MAXIMUM COVERAGE FOR THE SPENDING PRIORITIES. MORE PRISON BEDS, CORRECTION STAFF AND REHAB. JUST OVER HALF $1 BILLION OVER THE NEXT FOUR YEARS TO INCREASE PAY FOR DEFENCE WORKERS. AND $53 MILLION OVER FOUR YEARS TO GROW THE TEACHER WORKFORCE. TO PAY FOR THEIR PRIORITIES THEY HAVE ANNOUNCED A SERIES OF CUTS IN SPENDING. THOSE INCLUDE 245 MILLION OVER THE NEXT FEW YEARS BY ENDING THE FIRST HOME GRANTS WHICH GAVE ELIGIBLE FIRST HOME BUYERS UP TO $5000 FOR A DEPOSIT. THAT IS GOING TO BE USED APART TO PAY FOR 1500 SOCIAL HOUSING PLACES. MORE CUTS ARE EXPECTED TO THE PUBLIC SERVICE. THE MINISTRY OF FOREIGN AFFAIRS IS LARGELY BEEN SPARED THE SAVINGS. STOPPING FUNDING FOR FREE PUBLIC TRANSPORT FOR KIDS UNDER 13 AND HALF PRICED FARES FOR THOSE UNDER THE AGES OF 25. THIS IS THE BALANCE THAT THE FINANCE MINISTER HAS BEEN TALKING ABOUT. THEY ARE ANNOUNCING NEW SPENDING, AND THEY ARE ANNOUNCING TAX CUTS FOR INCOME EARNERS, BUT THEY SAY THOSE WILL BE OFFSET BY CUTS. WILL BE HAVE WILL HAVE MORE DETAILS. STAY WITH US. WELCOME BACK, AS WE GO THROUGH THE DETAILS ON THE 2024 BUDGET. BUDGET DAY IS AN OPPORTUNITY TO GET A TRAJECTORY OF THE ECONOMY. WE HAVE BEEN TALKING ABOUT THE OPERATING ALLOWANCE. THIS IS THE NEW SPENDING GOVERNMENT ANNOUNCES ON BUDGET DAY. NICOLA WILLIS SAID THAT HER OPERATING ALLOWANCE THE NEW MONEY WOULD BE LESS THAN GRANT ROBERTSON, HER PREDECESSOR HAD ANNOUNCED. HE SAID 3.5 BILLION. SHE HAS COME IN AT 3.2 BILLION. TALK TO US ABOUT THE COMING YEARS. IF HER FORECASTS HOLD TRUE, THE GOVERNMENT WILL REALLY PARE BACK ON NEW SPENDING. THE REDUCTION ACCUMULATES TO 5.5 BILLION. SHE HAS MADE A COMMITMENT TO GETTING BACK TO SURPLUS IN 2027-28. THERE IS WIGGLE ROOM. THAT IS A CLEAR GOAL. THAT SUGGESTS QUITE A LOT OF DISCIPLINE WILL BE IN PLACE OVER THE NEXT COUPLE OF BUDGETS. FOR THE RESERVE BANK, IT IS WHAT THEY WOULD LIKE TO HEAR. DISCIPLINE AS A DISCIPLINED WORD. IT MEANS IF YOU GET POSITIVE REVENUE SURPRISES, YOU ARE MORE LIKELY TO BANK THEM THAN TO SPLASH THE CASH. IF YOU MAKE MORE MONEY FROM TAXES THEN YOU ARE EXPECTING, IF THE ECONOMY DOES BETTER, OR IF YOU HAVE UNACCOUNTED SAVINGS, YOU HOLD ONTO IT. WHAT DO YOU MAKE OF THAT? IT IS EASY TO SAY THAT ON YOUR FIRST BUDGET. WAIT UNTIL ELECTION YEAR, WHEN IT GOES OUT THE WINDOW. THE REALITY IS, IF YOU WANT TO GIVE TAX CUTS AND REDUCED SPENDING AND NOT BORROW MORE, YOU HAVE TO BE DISCIPLINED ON THE SPENDING SIDE. THE TAX CUTS ARE SUPER EXPENSIVE. THEY HAVE CUT SPENDING. IT IS STILL NOT ENOUGH. THEIR BORROWING TRACK IS HIGHER THAN BEFORE THE ELECTION. IT IS HARD TO SQUARE THAT CIRCLE. A LOT OF DISCIPLINE IS REQUIRED. WE WILL SEE FROM THE PUBLIC SECTOR, WITH A HEALTH, EDUCATION, JUSTICE, THE SHARE OF SPENDING IS FALLEN. I CAN GUARANTEE NEW ZEALANDERS WANT TAX CUTS, BUT THEY WANT TO BE ABLE TO SEE A DOCTOR, FEEL SAFE ON THE ROADS, AND WHEN THOSE THINGS ARE COMPROMISED, WE WILL SEE AN ALMIGHTY CLASH. THE DEBT TRACK IS INTERESTING. THE FINANCE MINISTER INSISTED SHE WOULD NOT BORROW TO FUND TAX CUTS. SHE IS BORROWING MORE, SO OF COURSE SHE IS. YOU CAN'T SAY THAT BORROWING IS FOR THIS OTHER SPENDING. YOU HAVE TO BORROW MORE, BECAUSE THE ECONOMY IS WEAKER, YOU ARE GETTING A BIG TAX CUT, AND YOU HAVEN'T CUT ENOUGH SPENDING, BECAUSE IF YOU CUT MORE, SERVICES WOULD BE UNDER PRESSURE. INTERESTING TO SEE UNEMPLOYMENT FORECAST TO PEAK AT 5.2%, THE SAME AS FORECAST IN THEIR LAST ECONOMIC UPDATE BEFORE CHRISTMAS. INFLATION EXPECTED TO GET BACK BETWEEN 1% AND 3% BY THE END OF THIS YEAR. THAT IS IN LINE WITH WHAT THE RESERVE BANK FORECAST A FEW WEEKS AGO. SOME MIGHT LOOK AT THOSE FORECASTS AS A SLIVER OF POSITIVITY OUT OF TREASURY. I WILL COME BACK SHORTLY. THOUSANDS HAVE TURNED OUT FOR PROTESTS AROUND THE COUNTRY TODAY AS PART OF THE DAY TOITU TE TIRITI DAY OF ACTION. PROTESTORS GATHERED IN PUBLIC PLACES AND CLOGGED ROADS WITH SO-CALLED 'CAR-KOIS' TO PROTEST GOVERNMENT POLICIES WHICH THEY SAY HURT MAORI. (CROWD SING WAIATA) (CROWD SING JOYFUL WAIATA) LOVING THE SUPPORT. LOVING WHAT I'M SEEING. I'M LOVING THE MEANING AND WHAT IT'S ALL ABOUT. PROUD TO BE MAORI TODAY. TE PATI MAORI HAS BACKED THE PROTEST MOVEMENT, AND INSTEAD OF WATCHING THE BUDGET IN THE HOUSE, ITS MPS ARE ON PARLIAMENT'S FORECOURT. TE PATI MAORI CO-LEADER DEBBIE NGAREWA-PACKER IS WITH US NOW. TENA KOE, THANK YOU FOR BEING WITH US. WHY ARE YOU OUTSIDE? BECAUSE YOUR CAMERAS ARE OUTSIDE TODAY. THAT'S WHERE YOU HAVE PLANTED ME. YOUR QUESTION IS, WHY HAVE WE DECIDED TO GREET THE TENS OF THOUSANDS OF PEOPLE THAT HAVE TURNED UP TO TELL US HOW THEY ARE FEELING ABOUT THIS ANTI-MAORI GOVERNMENT. WE HAVE OVERWHELMING SUPPORT FROM THEM, AND WE ARE HERE TO SERVE THEM, UNLIKE THIS GOVERNMENT, WE GIVE THEM TIME AND ATTENTION THEY DESERVE. WHAT DO YOU THINK HAS BEEN ACHIEVED TODAY? THE MOST IMPORTANT THING THAT HAS BEEN ACHIEVED, THIS IS THE SECOND ACTIVATION AND HAS SHOWN THE GROWTH. WE ARE NOW CONFIRMED AS 20% OF THE POPULATION, UP TO 1 MILLION, AND WE ARE UNHAPPY WITH THE CONTINUAL DISMANTLING OF KAUPAPA THAT HAS BEEN INCREMENTAL ADVANCED IN ADVANCING OUR PEOPLE, WITH A FROM HEALTH, TO REO, TO OUR ENVIRONMENT, AND WE HAVE SEEN A BUDGET THAT SAID WHY WOULD ANYONE WANT TO TURN UP TO CELEBRATE A BUDGET THAT IS CUTS RUTHLESSLY MADE AGAINST MAORI AND OUR RHEMA COMMUNITIES, RAINBOW COMMUNITIES WHAT SPECIFICALLY ARE YOU CONCERNED ABOUT? PROBABLY FROM THE START TO THE FINISH. IF YOU GO THROUGH EVERYTHING, I CHALLENGE ANYBODY TO SEE THE WORD MAORI IN THE HEALTH BUDGET, WHERE THEY TALK ABOUT ECONOMIC DEVELOPMENT, BUT WHEN YOU LOOK AT THE EFFECT THAT MATATINI DID, WHANAU ORA IS A RETURN ON INVESTMENT, THERE IS NO INCREASE ON THOSE. WE HAVE A BUDGET THAT IS ADVERSE TO ANY MAORI TRANSFORMATIONAL SOLUTION. THEY ARE INVESTING IN MEGA PRISONS AND EVERY TYPE OF ZOMBIE PROJECT THAT THEY ARE TRYING TO BRING BACK TO LIFE. WE HAD ENOUGH WARNINGS. I AM STILL GETTING DETAIL, BUT WHAT WE HAVE SEEN SO FAR IS DISMAL AND A SLEIGHT ON THIS GOVERNMENT IN ITS TWILIGHT STAGE. THE GOVERNMENT HAS HERALDED ITS TAX CUTS. ALL INCOME TAX BRACKETS EXCEPT THE TOP WILL BE RAISED 11.5%. MAORI WILL BE AFFECTED BY THOSE CHANGES. HOW WILL THOSE TAX CUTS BE RECEIVED BY ALL SUPPORTERS? YOUR SUPPORTERS? INCOME TAX IS ONE ASPECT. IF YOU LOOK AT OUR PEOPLE GETTING INTO A BRACKET WHERE THEY ARE EARNING ENOUGH, WE HAVE THOSE WHO ARE HOMELESS, THOSE WHO HAVE EDUCATION FAILING THEM, THOSE THAT CAN BARELY SURVIVE. TO SIT THERE AND SAY THAT THE LANDED GENTRY WE ARE MORE WIDER AND INCLUSIVE IN OUR THINKING WHEN TWO THIRDS OF OUR PEOPLE ARE BEING FAILED IN THIS BUDGET, WE HAVE TO THINK ABOUT THEM. DEBBIE NGAREWA-PACKER. WITH SUPPORTERS FROM THE TOITU TE TIRITI MOVEMENT. WE WILL HEAR FROM OTHER PARTY LEADERS THIS AFTERNOON. WELCOME BACK TO THIS BUDGET 2024 1 NEWS SPECIAL. IF YOU'RE JUST JOINING US, HERE'S A RECAP OF SOME OF THE KEY FIGURES ABOUT THE STATE OF THE ECONOMY TREASURY HAS RELEASED TODAY AS PART OF THE BUDGET. UNEMPLOYMENT TO PEAK AT 5.2% IN 2025. A SURPLUS IS PROJECTED BY 2027/2028 ` ONE YEAR LATER THAN EXPECTED. NICOLA WILLIS SITTING AT THE PUSH BACK THE SURPLUS FROM A YEAR EARLIER. SO BETWEEN ONE AND 3% BY THE END OF THIS YEAR. AND THAT WILL BE PICKING AT ABOUT 40% OF GDP. FINANCE MINISTER NICOLA WILLIS ALSO SHARING A LOOK AT NATIONAL'S PLAN TO GET THE COUNTRY OUT OF DEBT, WITH PROPSED FUTURE ALLOWANCES SIGNIFICANTLY REDUCED, GETTING DOWN TO TWO POINT $4B A YEAR. ON TOP OF ALL THE REGULAR SPENDING. THEY HAVE PARED BACK THAT OVER THE LAST COUPLE OF YEARS. THE FINANCE MINISTER GIVING HER PROJECTIONS FOR WHEN AOTEAROA'S BOOKS COULD BE OUT OF THE RED. MR SPEAKER, MANAGING WITHIN FUTURE ALLOWANCES OF $2.4B WILL BE CHALLENGING. SAVINGS AND REPRIORITISATION WILL BE A FEATURE OF FUTURE BUDGETS, JUST AS THEY ARE IN BUDGET 2024. THEY WILL BE A BUSINESS-AS-USUAL ACTIVITY. MR SPEAKER, THE FISCAL STRATEGY REPORT SETS OUT THE GOVERNMENT'S FISCAL INTENTIONS AND OBJECTIVES. THESE REMAIN AS THEY WERE IN THE BUDGET POLICY STATEMENT, WITH ONE ADDITION ` THE GOVERNMENT INTENDS TO GET BACK TO SURPLUS IN 2027-2028. THAT'S FINANCE MINISTER NICOLA WILLIS. BACK WITH OUR PANEL. SHARON, LET'S LOOK AT SOME OF THOSE KEY FORECASTS. UNEMPLOYMENT SET TO PEAK AT JUST OVER 5%. AM I BEING TOO POSITIVE AND SAYING FROM A LAYMAN'S PERSPECTIVE, THIS MAY BE AS GOOD AS WE COULD HOPE FOR> WHAT IS CLEAR IS THAT THE ECONOMIC FORECAST IS THE GOVERNMENT'S STYLE. ONLY ABOUT OF A THIRD OF THAT IS BECAUSE OF THE CHANGES THEY ARE MAKING TO TAX RATES. THE REST OF IT IS WEAK ECONOMY AND TAX COMING IN. IT HAS BEEN PRETTY MATERIAL. I THINK OVERALL, MARKERS HAVE NOT REACTED TO THIS. THE SHORT-TERM INTEREST RATES, YOU CAN TAKE THAT AS THE MARKETS FIRST PUNT ON WHETHER THIS IS INFLATIONARY OR NOT. NO REACTION. THE NEW ZEALAND DOLLAR, WHICH I GUESS YOU CAN BROADLY TAKE AS A VOTE OF CONFIDENCE OF WHETHER THIS IS GOOD OR BAD. NO REACTION. NOTHING TO SEE THERE.. SO EXPLAIN THAT TO ME. WILL THE GOVERNMENT BE HOPING FOR NOTHING IN TERMS OF MARKET RESPONSE? I WOULD SAY SO. THAT WOULD PUT UP THE PRESSURE OF THEY REACTED. IF THE SHORT-TERM BOND DEALS HAD GONE UP, THAT WOULD BE A SIGN THAT THE RESERVE BANK ISN'T GOING TO LIKE THIS. THIS WILL MAKE THEIR RATES HIGHER FOR LONGER. THERE DOESN'T SEEM TO BE THE MARKETS TAKE ON IT. IF THE CURRENCY HAD DIVED, THAT WOULD BE FUN AND POLITICAL, BUT IT HASN'T MOVED EITHER. ' FUN'. UNEMPLOYMENT JUST OVER 5%. GDP GROWTH EXPECTED AT MINUS 0.2. WHEN YOU SAY WE ARE IN THIS ECONOMIC DOWNTURN? WE ARE IN THE TEETH OF THE RECESSION. THIS IS WHY THINGS FEEL SO BLEAK. PEOPLE ARE UNDER A LOT OF FINANCIAL PRESSURE. WHAT THE FORECASTERS SAYING WE THINK BY THE END OF THIS YEAR, WE SHOULD BE STARTING TO COME OUT OF IT, WHICH KIND OF MAKES SENSE. WE ARE NOT GOING TO SEE THE SAME KIND OF EXTREME PRESSURE AGAINST THE ECONOMY THAT WE'VE BEEN SEEING FOR THE LAST COUPLE OF YEARS. THE FORECASTERS SAYING THAT THINGS ARE BAD RIGHT NOW AND FEEL REALLY TOUGH, THAT OUR EXPECTATION OVER THE NEXT 12 MONTHS THINGS WILL GET BETTER. WE DO NEED A BIT OF HOPE OUT THERE BECAUSE RECESSIONS ARE VERY PAINFUL TIMES. WE ARE SEEING CORPORATE INSOLVENCY STARTING TO RAMP UP. FOR THE REST OF US, IT IS NOT SO GOOD WHEN BUSINESSES ARE FAILING. GENERALLY SPEAKING WHEN YOU LOOK AT THE FORECAST FROM TREASURY, THE REALITY IS WE HAVE BEEN GETTING IT WRONG FOR YEARS. JUST BE REALLY CAREFUL ABOUT` POLITICAL EXPERTS WILL TELL YOU LOTS OF THINGS. WE HAVE NO IDEA. DO YOU SEE A GROWTH PLAN IN THE BUDGET? THAT'S PROBABLY THE BIT THAT WORRIES ME A LITTLE BIT. THE TREASURY FORECAST THAT WE SEE LABOUR PRODUCTIVITY HAS NOT INCREASED FOR YEARS. BUT IT IS NOT GOING TO MAGICALLY HAPPEN WITHOUT ANY POLICY RESPONSE. THE BUDGET IS NOT THE TIME WHERE YOU SHOULD BE DOING BIG POLICIES THAT ARE STRUCTURAL IN NATURE BUT WHAT WE DID SEE IN THIS BUDGET AS WE ARE GOING TO BE SPENDING LESS ON INFRASTRUCTURE, ONE OF THE KEY CONSTRAINTS ON ECONOMY. A LITTLE BIT WORRIED THAT WE HAVE NOT SEEN ANY STRONG PLANS OF ACTION UNLOCKING NEW ZEALAND POTENTIAL. AND WE HAVE LESS EFFORT MADE ON SOLVING INFRASTRUCTURE DEFICIT. IT IS IN ESTIMATED AS BEING AS HIGH AS $2 BILLION. THAT WAS MY ESTIMATE. THAT IS A VAST DEFICIT. HOW ABOUT YOU, SHARON? I THINK THE INFRASTRUCTURE SPACE, RATHER THAN THE DOLLAR FIGURE, WE NEED TO DEPOLITICISE THAT PROCESS BECAUSE WE HAVE SEEN OVER A LONGER TIMEFRAME THAT THIS PIPELINE HAS BEEN VERY STOP, START. THAT JUST CAN'T BE EFFICIENT. IT MEANS A LOT OF MONEY GOES NOWHERE. IT WOULD HAVE BEEN NICE TO SEE SOMETHING THAT PERHAPS WAS ALONG THOSE LINES TODAY SO WE GET MORE BANG FOR BUCK ON THE MONEY THAT WE DO SPEND. WE NEED TO SPEND REALLY SMART. THE BUDGET ONLY SETS END OF ALL SPENDING. FOR GOVERNMENT IT IS NOT JUST ABOUT HOW MUCH TAX DO WE COLLECT BUT ALSO WHAT DO WE CHOOSE TO SPEND IT ON? THE BUDGET DOESN'T TELL YOU THOSE THINGS. ONCE WE SEE WHERE THE MONEY WILL BE ALLOCATED... FOR EXAMPLE WE KNOW FROM PREBUDGET ANNOUNCEMENT THAT THERE WILL BE LESS THINGS FOR BUDGETING AND DEBT SOLUTIONS. THAT BREAKS MY HEART BECAUSE THOSE PROGRAMS REALLY WORK. ALL OF THOSE THINGS GET TRAMPLED UP IN THE BROADER CONTEXT OF BEING RESPONSIBLE, BUT ARE WE? I AM VERY GRATEFUL TO HAVE YOU BOTH HERE. ACT PARTY LEADER DAVID SEYMOUR IS THE ASSOCIATE MINISTER OF FINANCE. HE IS WITH US NOW. THANK YOU FOR BEING WITH US. WHAT YOU MAKE OF THE BUDGET? WELL, THERE'S REALLY THREE THINGS THAT WE CAMPAIGNED ON. ONE WAS TO CUT WASTE, TO WAS A CUT TAX AND THREE WAS TO PUT MORE MONEY INTO THINGS LIKE JUSTICE IN DEFENCE AND HEALTH AND EDUCATION. WE HAVE A BUDGET THAT IS CUTTING WASTE DRAMATICALLY BY ABOUT 6 MILLION OVER THE LAST FOUR YEARS ON TOP OF THE SEVEN AND A HALF BILLION DOLLARS OF IMMEDIATE SAVINGS AT THE END OF LAST YEAR. WE HAVE TAX RELIEF TO 94% OF HOUSEHOLDS AND 83% OF TAXPAYERS. AND THAT IS SERIOUSLY BOOSTING WHAT WE SPEND ON MEDICINES, WHAT WE SPEND ON HEALTH AND CORRECTIONS AND ON DEFENCE. I THINK THAT IT IS CONSISTENT. IT'S NOT WIDELY EXCITING BUT IT IS CONSISTENT WITH WHAT WE PROMISED WE WOULD DO. I THINK PEOPLE WILL OBSERVE IN SOME AREAS IT DOESN'T GO AS FAR AS ACT WOULD HAVE, BUT I THINK IT'S ALSO EASY TO POINT OUT WHERE IT HAS GONE FURTHER THAN THE OTHER PARTIES MIGHT HAVE WITHOUT ACT. AND I THINK THAT IS FAIR ENOUGH. THEY GOT THEIR OWN PARTIES. IN THE LEAD UP TO LAST YEAR'S ELECTION, YOU ARE LUKEWARM ON THIS SOME ELEMENTS OF NATIONAL'S TAX PLANS. WHEN YOU LOOK AT THE INCOME TAX CUTS THAT HAVE BEEN ANNOUNCED TODAY, WILL THOSE CUTS BE INFLATIONARY? KNOW THEY WON'T BECAUSE THE REDUCTION IN EXPENDITURE IS GREATER THAN THE REDUCTION IN TAX. WE ARE GOING TO SEE THE GOVERNMENT REDUCING ITS DEFICITS, REDUCING ITS BORROWING OVER THE FOUR YEARS UNTIL WE GET BACK TO SURPLUS. IT IS IMPORTANT TO UNTANGLE THE GOVERNMENT SPENDING AND TAXING PATTERN FROM THE PRETTY SEVERE ECONOMIC SHOCK THAT WE HAVE INHERITED. EVEN IN THE SIX MONTHS SINCE THE HALF-YEAR FISCAL UPDATE IN DECEMBER, THINGS HAVE GOT MUCH WORSE. YOU DON'T ACTUALLY NEED TO BE A PERSON WHO READS THOSE UPDATES TO KNOW THAT. YOU JUST HAVE TO GO OUT AND TALK TO PEOPLE ON THE MAIN STREET OF ANYTOWN AND NEW ZEALAND AND ASK WHAT THE ECONOMIC CONDITIONS ARE LIKE IN ANY INDUSTRY. THAT IS PUT A BIG HEADWIND ON THE INDUSTRY. WE WOULD HAVE BEEN MAKING SURPLUS EARLY 20 THIRTIES, BUT WE ARE TO DO IT IN THREE YEARS. THE NEW MONEY FOR BUDGET FORECAST OVER THE NEXT FEW YEARS HAS BEEN SIGNIFICANTLY PEERED BACK. WHAT DOES THAT MEAN FOR NEW ZEALANDERS? IT'S GOING TO MEAN THAT WE ARE GOING TO HAVE TO KEEP FINDING ECONOMIES IN OUR GOVERNMENT'S OPERATIONS. LET ME PUT THIS IN CONTEXT. IN THE NEXT SIX YEARS, THE PREVIOUS GOVERNMENT INCREASE THE AMOUNT OF SPENDING PER PERSON AFTER INFLATION BY 30% IN SIX YEARS. I'M ALLOWING FOR THE POPULATION GROWTH. GOVERNMENT SPENDING PER PERSON INCREASED 30%. IF THEY COULD SPEND SIX YEARS DOING LESS AND LESS WITH MORE AND MORE BECAUSE FRANKLY, WHAT THEY'RE TRYING TO DO WITH EDUCATION, HEALTHCARE, PRODUCTIVITY WENT DOWN. MUST BE POSSIBLE FOR US TO DO MORE WITH RELATIVELY LESS. THAT $2.4 BILLION A YEAR OPERATING ALLOWANCE, IF YOU WORK IT OUT, GOVERNMENT SPENDING IS ABOUT HUNDRED AND 40 BILLION. THAT WILL BE LESS THAN INFLATION EVEN AS INFLATION COMES DOWN, AND THE POPULATION WILL INCREASE. IT MEANS THE GOVERNMENT WILL HAVE TO FIGURE OUT HOW TO DO STUFF BETTER AND SMARTER. I WILL GIVE YOU ONE EXAMPLE. I WAS RESPONSIBLE FOR THE HEALTHY SCHOOL LUNCH PROGRAM. WE PUT ASIDE MONEY TO CONTINUE THAT FROM TERM ONE NEXT YEAR. WOULD EVER HAVE TO CUT IT OR BORROW, OR TAX MORE. WE MADE SAVINGS SO ELSEWHERE. WE WERE ABLE TO FEED MORE CHILDREN NEXT YEAR $104 MILLION A YEAR LESS. DO GET THE PRIVILEGE OF COMING TO GET THE PRIVILEGE OF COMING UP WITH A SNAPPY NAME NOW THAT YOU'RE IN GOVERNMENT FOR THE BUDGET? A HUGE HANGOVER THAT PEOPLE ARE FEELING FROM INFLATION AND SO ON, BUT NOW WHAT WE HAVE IS A BUDGET THAT SAYS OKAY, WE WILL MANAGE OUR OWN BOOKS JUST THE WAY THAT BUSINESSES AND HOUSEHOLDS HAVE. WE ARE GOING TO DEAL TO RID OVERREGULATION. WE ARE GOING TO CREATE FOUNDATIONS WHERE NEW ZEALANDERS CAN MAKE DIFFERENCES IN THEIR OWN LIVES. THEY CAN GET SO WORKED ON SOME DECENT ROADS AND BUILD WORLD-CLASS BUSINESSES. THANK YOU, DAVID SEYMOUR WHO WAS THE ASSOCIATE MINISTER OF FINANCE. STAY WITH US. WE WILL BE HEARING FROM NICOLA WILLIS. SONG: # You're as cold as ice... # What's your address? Not telling. What's your bank account number? 123... Nah! Would you be interested in... Nope. How about a deal... Nah! Pay here! (*Pfffft SOUND*) Negative. Not. Telling. (PHONE RINGS) # Cold # As # Ice... # Hello? My card number? It's, um... Ooh, yeah! # You're as cold as ice... # WELCOME BACK TO THIS 1 NEWS SPECIAL. JUST OVER AN HOUR AGO, FINANCE MINISTER NICOLA WILLIS UNVEILED THE COALITION GOVERNMENT'S FIRST BUDGET. IF YOU'RE JUST JOINING US, HERE ARE THE TOP POINTS FROM THE BUDGET ` TAX RELIEF WILL GIVE THE AVERAGE INCOME HOUSEHOLD UP TO $102 PER FORTNIGHT, PLUS CHILDCARE PAYMENTS OF UP TO $150 FOR ELIGIBLE FAMILIES. HOUSEHOLDS WITH CHILDREN WILL GET, ON AVERAGE, $78 PER FORTNIGHT, WHILE WORKING-AGE NEW ZEALANDERS WILL GET $32 A FORTNIGHT ON AVERAGE. IT DEPENDS ON HOW MUCH YOU EARN, HOW MANY KIDS YOU HAVE. A SINGLE PERSON EARNING $55,000 A YEAR WILL BE BETTER OFF BY ABOUT $51 A FORTNIGHT. $17B FOR HEALTH OVER FOUR YEARS. THE GOVERNMENT ANNOUNCED $3 BILLION FOR EDUCATION AND LAW & ORDER, AND $7 BILLION FOR INFRASTRUCTURE. THE OPERATING ALLOWANCE IS 3.2 BILLION, ON TOP OF ALL OF THE REGULAR SPENDING TO PAY TEACHERS AND POLICE, KEEP THE LIGHTS ON. THAT IS LOWER THAN GRANT ROBERTSON FORECAST. HE FORECAST 3.5 BILLION NEW SPENDING. OVER THE NEXT FEW YEARS, THE GOVERNMENT IS PLANNING TO PARE BACK SPENDING WITH SAVINGS OF $5.5 BILLION. 1 NEWS BUSINESS CORRESPONDENT KATIE BRADFORD JOINS US FROM PARLIAMENT. YOU HAVE IDENTIFIED WHAT COULD BE TERMED PHYSICAL RISKS IN THE DETAIL. KIA ORA, GOOD AFTERNOON. I HAVE BEEN TRAWLING THROUGH THESE DOCUMENTS. YOU HAVE BEEN TALKING A LOT ABOUT THE FACT THAT THE GOVERNMENT HAS SIGNALLED THERE ARE MORE CUTS TO COME, THE OPERATING ALLOWANCE WILL BE SMALLER IN COMING YEARS. THAT MAKES A NUMBER OF ASSUMPTIONS. THERE ARE SCENARIOS THAT COULD CHANGE. WE COULD SEE DISASTERS. THE ECONOMIC SITUATION COULD WORSEN. THERE ARE SPECIFIC PROGRAMS IDENTIFIED IN THESE DOCUMENTS THAT TALK ABOUT THE RISKS. A BIG ONE IS AROUND HOUSING. THERE IS AN ASSUMPTION THAT MORE HOUSES WILL BE BUILT. THEY REDUCED FUNDING FOR EMERGENCY HOUSING. IF THAT DOESN'T HAPPEN, THAT WILL COST MORE MONEY. FOR POLICE, THERE COULD BE MORE COST PRESSURES. THAT IS A TIME-LIMITED FUNDING, OR A FISCAL CLIFF THAT LABOUR WAS CRITICISED FOR. GOVERNMENTS ALWAYS DO THIS, MAKE ASSUMPTIONS THINGS WILL TRACK ALONG. BECAUSE THIS GOVERNMENT HAS GIVEN ITSELF SUCH A TIGHT OPERATING ALLOWANCE, THERE IS NOT MUCH TO SPEND, YOU ARE ASSUMING A LOT OF SAVINGS. IT POSES RISKS, SHOULD SOMETHING GO WRONG OR THE COMPANY NEEDS MORE MONEY. DOESN'T LEAVE ROOM FOR GROWTH OF PROGRAMS, WHERE DO YOU GET NEW IDEAS? KATIE, HOW ARE BUSINESSES AND THE BUSINESS COMMUNITY LIKELY TO RECEIVE THIS BUDGET? WHAT THEY WANT IS GROWTH AND STABILITY. THEY WANT THE ECONOMY TO GROW. WE HAVE SEEN BIG JOB LOSSES. MANY BUSINESSES ARE STRUGGLING WITH THE PRESSURES OF RATES RISES, RENT INCREASES. WHAT THEY ARE LOOKING FOR IS SOME OF THAT PRESSURE TO EASE, THE INFLATION PRESSURE WILL EASE. IT IS COMING BACK EARLIER, 1% TO 3%. UNEMPLOYMENT IS EXPECTED TO RISE, UP TO 5.3%. IN TERMS OF DIRECT INVESTMENT FOR BUSINESSES THERE ISN'T ANYTHING I HAVE SEEN SO FAR, BUT IF THE ECONOMY CAN GROW, THEY WILL BE HAPPY. KATIE BRADFORD, 1 NEWS BUSINESS CORRESPONDENCE. INTERESTING TO LOOK AT FORECASTS OUT OF TREASURY. TREASURY AND THE RESERVE BANK BOTH THINK INFLATION WILL BE BACK WITHIN THE TARGET BAND BY THE END OF THIS YEAR. WE WILL ASK OUR PANEL SHORTLY WHAT THAT IS LIKELY TO MEAN FOR THE OCR. WE MIGHT SEE INTEREST RATE CUTS. LET'S HAVE A LOOK AT THE SETPIECE OF THIS BUDGET ` TAX CUTS. TAX RELIEF WILL GIVE THE AVERAGE-INCOME HOUSEHOLD UP TO $102 PER FORTNIGHT FROM LATE JULY; CHILDCARE PAYMENTS OF UP TO $150 FOR ELIGIBLE FAMILIES. HOUSEHOLDS WITH CHILDREN WILL GET, ON AVERAGE, $78 PER FORTNIGHT, WHILE WORKING-AGE NEW ZEALANDERS WILL GET $32 A FORTNIGHT ON AVERAGE. A SINGLE PERSON EARNING $55,000 A YEAR WILL BE BETTER OFF BY ABOUT $51 A FORTNIGHT. THE TAX PACKAGE IS EXPECTED TO COST ABOUT $3.7B A YEAR. HOW WILL THEY MAKE THE TAX CUT? INCOME TAX BRACKETS ALL SHIFT EXCEPT THE TOP UP BY 11.5%. THIS IS THE FIRST TIME WE HAVE SHIFTED TAX BRACKETS SINCE 2010. LET'S HAVE A LOOK AT SOME OF THE FORECASTS FROM TREASURY TODAY. THESE HAVE JUST BEEN RELEASED IN THE PAST HOUR UNEMPLOYMENT IS FORECAST TO PEAK AT JUST OVER 5% AT THE END OF THIS YEAR. A SURPLUS IS PROJECTED BY 2027-28, ONE YEAR LATER THAN EXPECTED. TREASURY SAYS THE ECONOMY IS EXPECTED TO GET STRONGER FROM THE SECOND HALF OF THIS YEAR, WITH GDP GROWTH EXPECTED TO HIT 1.7% IN THE YEAR TO JUNE 2025. IN ABOUT 14 MONTHS, 13 MONTHS, FOR THE LABOUR PARTY, THIS IS THE FIRST BUDGET IT HAS SEEN FROM THE OPPOSITION BENCHES SINCE 2017. THE LABOUR PARTY FINANCE SPOKESPERSON IS BARBARA EDMONDS. TENA KOE, THANK YOU FOR BEING WITH US. KIA ORA, JACK. THIS IS A BACKWARDS BUDGET. I AM ASTOUNDED BY THE FISCALS, AND I AM TRYING TO PROCESS IT ALL. THEY PROMISED $250 FOR AN AVERAGE HOUSEHOLD. IT IS $60 A FORTNIGHT. YOU ARE TRYING TO GET ON TOP OF THE FISCALS. WHAT HAS SURPRISED YOU? ARE YOU CONCERNED ABOUT THE TAX PACKAGE? THE GOVERNMENT HAS $10 BILLION FOR ITS TAX PACKAGE. THEY ARE BORROWING $12 BILLION TO PAY FOR SPENDING, SO THEIR TAX PACKAGE. OVER A SIMILAR FORECAST. THEY ARE RUNNING LARGER STRUCTURAL DEFICITS THAN LABOUR EVER DID, EXCEPT FOR 2020, WHEN WE HAD A WAGE SUBSIDY. THEY ARE MAKING MORE SIGNIFICANT CUTS THAN LABOUR WAS PLANNING TO. WHAT CUTS WOULD A LABOUR GOVERNMENT HAVE MADE TO REDUCE THE DEFICIT? WE WOULDN'T HAVE GIVEN THE TAX CUTS. SOME OF THE SPENDING, 240 M THEY ARE CUTTING BACK ON, THAT IS LESS FOR VICTIM SUPPORT AND COUNSELLING, LESS FOR LAW COMMUNITY CENTRES, AND NOT ENOUGH MONEY PUT ASIDE FOR HEALTH AND EDUCATION TO KEEP THE LIGHTS ON. IS IT FAIR, WHEN YOU CONSIDER THE TAX CHANGES, AS IT FAIR THAT INCOME TAX BRACKETS HAVEN'T CHANGED IN 14 YEARS? WHAT IS FAIR IS WHEN THE ECONOMY IS DOING WELL, YOU NEED TO LOOK AT THINGS LIKE TAX CUTS. WHAT THEY HAVE DONE IS THE CHILD POVERTY, IN THE BEFU, THAT CHILD POVERTY IS GOING TO GET WORSE UNDER THIS GOVERNMENT. 27,000 PEOPLE WILL LOSE THEIR JOBS. I AM ASTOUNDED HOW MUCH, $0.30 MORE FOR THE MINIMUM WAGE EARNER PER HOUR, IT IS NOT ENOUGH FOR WHAT THEY HAVE TAKEN FROM THEM, SUCH AS PUBLIC TRANSPORT SUBSIDIES. 27,000 PEOPLE WILL LOSE THEIR JOB? EXPLAIN IT TO US. THAT IS THE FORECAST IN UNEMPLOYMENT. THAT ISN'T ALL ON THE GOVERNMENT. THAT IS BECAUSE THE ECONOMY IS SLOWING DOWN. WHAT WE DON'T SEE IT AS AN INVESTMENT TO IMPROVE PRODUCTIVITY. THEY HAVE SAID IN THE BUDGET PACKAGE AROUND TOURISM, TOURISM AS PART OF THE PRODUCTIVE ECONOMY, TO ATTRACT PEOPLE TO COME TO NEW ZEALAND, SPEND MONEY, IMPROVE GROWTH, THEY ARE TAKING AWAY SOME OF THE MEASURES THAT WILL ADVERTISE NEW ZEALAND TO THE WORLD, AS WELL AS MAKING THE LEVY HIGHER. WE ARE NOT SEEING ENOUGH ON THE PRODUCTIVE SIDE FOR ME TO FEEL CONFIDENT THE GOVERNMENT KNOWS WHAT THEY ARE DOING. IN THE HAIFU, IN THE HAIFU,IN DECEMBER UNEMPLOYMENT WAS FORECAST TO PICK AT 5.2%, NOW 5.3%. FISCAL POLICY PLAY SOME ROLE, SOME WILL SAY THE GOVERNMENT ISN'T SOLELY RESPONSIBLE FOR THOSE JOB LOSSES. WHAT IS YOUR ALTERNATIVE VISION? WHAT WOULD YOU HAVE PRIORITISED AS FINANCE MINISTER? I WOULDN'T HAVE PROMISED TAX CUTS IN THE CURRENT ECONOMIC CLIMATE. WE WOULD HAVE KEPT THE INVESTMENT INTO CLIMATE ACTION. ACTIO WE HAD A $6 BILLION RESILIENCE PLAN TO PAY TO MITIGATE CLIMATE RISKS. THAT WOULD BRING DOWN INSURANCE PREMIUMS, PUT DOWNWARD PRESSURE ON INSURANCE PREMIUMS, WHICH WE KNOW IS ONE REASON THE RESERVE BANK SAYS INFLATION IS STICKY. THERE IS A RAFT OF THINGS WE WOULD NEED TO LOOK AT, AND WE WILL TAKE A FORENSIC VIEW OVER THE NEXT WEEKS. WE EXPECT TO HEAR FROM THE FINANCE MINISTER SHORTLY. THIS SPECIAL CONTINUES IN A FEW MINUTES. WELCOME BACK TO THIS ONE USE Q&A SPECIAL. WE WILL TAKE YOU TO A LIVE SHOT NOW IN PARLIAMENT WHERE THE PRIME MINISTER CHRISTOPHER LUXON IS ADDRESSING THE HOUSE. THIS IS HIS FIRST BUDGET AS PRIME MINISTER. HE FACES WHAT SOME WOULD SAY AN UNENVIABLE TASK. ALTHOUGH IT IS A BIG OCCASION FOR HIM, IT IS ARGUABLY A BIGGER OCCASION FOR NICOLA WILLIS. ALL OF NATIONAL MPS IN THE HOUSE... APPLAUDING THE PRIME MINISTER AS HE DELIVERS THE TWENTY20 FOR BUDGET. NEW ZEALAND FIRST HAS WEIGHED IN ON THE BUDGET, SHANE JONES TAKING THE OPPORTUNITY TO SUPPORT THE GOVERNMENT'S HISTORY OF FAST TRACKING LEGISLATION. NOW THIS BUDGET'S BEEN CRITICISED BY THE GREEN PARTY FOR BEING ANTI-CLIMATE. HERE'S WHAT SHANE JONES HAD TO SAY. HOW DO WE HAVE ANY CONFIDENCE THAT ANY PROJECT IS EVER GOING TO HAPPEN WITHIN A DECENT PERIOD OF TIME? AND THAT TAKES US TO THE FAST-TRACK LEGISLATION. ONE OF THE GREATEST IMPEDIMENTS OF GETTING PROJECTS AT A LEVEL OF CONFIDENCE AMONGST INFRASTRUCTURE PEOPLE IS THE APPROVALS PROCESS. SO WHILST ITS ATTRACTED A LOT OF WHITE WATER AND IT DOESNT FEATURE LARGELY IN THE BUDGET, YOU CANNOT JUST HAVE FISCAL LARGESS; YOU MUST HAVE AN APPROVAL PROCESS THAT EXPEDITES THINGS. ARE WE NOT JUST PUTTING A BANDAID OVER THINGS LIKE THE FLOOD WALLS AND THE FLOOD PROTECTIONS? BECAUSE WE'RE CUTTING QUITE A FEW CLIMATE-CHANGE-RELATED PROJECTS AS WELL IN THIS BUDGET THAT WOULD'VE REDUCED EMISSIONS. YEAH, CUSHLA, YOU RAISE A GOOD POINT. WE'RE DOING PRACTICAL THINGS. NEW ZEALANDERS THAT BUG ME IN REGIONAL NEW ZEALAND, THEY DON'T WANT TO WAIT FOR ANOTHER MEETING ABOUT CLIMATE CHANGE IN GENEVA. THEY WANT THE BRIDGE; THEY WANT THE STOPBANK FIXED UP ASAP, BECAUSE THE VOLATILE WEATHER IS GOING TO HIT US WITH AND INCREASINGLY DANGEROUS LEVEL OF FREQUENCY. THAT IS NEW ZEALAND FIRST MINISTER SHANE JONES REACTING TO THE 2024 BUDGET. STICK WITH US. WE EXPECT TO HEAR FROM NICOLA WILLIS. WELCOME BACK TO THIS SPECIAL, AS WE GO THROUGH THE 2024 BUDGET. AT 2 O'CLOCK JOURNALISTS AND ANALYSTS WERE ALLOWED OUT OF LOCK-UP HAVING STUDIED THE DETAIL. IT IS KEENLY ANTICIPATED, THE FIRST BUDGET FOR NICOLA WILLIS. INFLATION IS AT 4%, CPI, THE MAIN MEASURE, THOSE ARE THE LATEST NUMBERS, 12 MONTHS TO MARCH. ACCORDING TO THE FORECAST, INFLATION SHOULD BE UNDER 3% BY THE END OF THE YEAR. IF YOU ARE THE GOVERNOR OF THE RESERVE BANK, HOW WOULD YOU INTERPRET THE GOVERNMENT'S SPENDING PLANS? SHARON, YOU SPENT A LOT OF TIME GETTING INSIDE THE MIND OF ADRIAN ORR. WHAT ARE THE THINKING THIS AFTERNOON? HE MAY NOT BE WATCHING. HE IS GLUED TO THE TV ALL AFTERNOON. OVERALL, THE TIMING OF THE TAX CUTS YOU WOULD HAVE PREFERRED IT PUSHED FURTHER OUT, BUT THAT IS OUTWEIGHED BY THE CLEAR MESSAGES ABOUT PHYSICAL RESTRAINT, WHICH IS WHERE THE BUCK STOPS. THAT IS AN ISSUE FOR THE NEXT FEW YEARS, AND HOPEFULLY WE WON'T STILL HAVE AN INFLATION PROBLEM. IT IS NOT A GAME CHANGER. THERE IS MORE GOING ON IN THE ECONOMY THAN MARGINAL CHANGES. WHEN WE THINK ABOUT INFLATION, THE LEVERS WE CAN PULL TO SHAKE THE ECONOMY, MONETARY POLICY, THE OCR, THEN FISCAL POLICY, DO YOU THINK THOSE HANDS ARE PULLING IN THE SAME DIRECTION? I THINK THEY ARE, ONE HAS A LOT MORE STRENGTH, BUT THEY ARE NO LONGER FIGHTING AGAINST EACH OTHER. FROM A NATIONAL ECONOMY POINT OF VIEW, THAT IS A WIN. WILL BE BACK WITH OUR PANEL AND A COUPLE OF MINUTES. NICOLA WILLIS HAS JUST DELIVERED HER FIRST BUDGET OF HER TENURE. SHE IS WITH US NOW LIVE. TALK TO US, MINISTER, ABOUT WHAT YOU ARE TRYING TO ACHIEVE IN THIS YEAR'S BUDGET. WE ARE TRYING TO DELIVER A RESPONSIBLE BUDGET THAT DELIVERS TAX RELIEF FOR WORKING KIWIS WHO HAVEN'T HAD ANY TAX REDUCTION IN 14 YEARS, TARGETING THAT AT LOWER AND MIDDLE INCOME FAMILIES WITH CHILDREN, INVESTING MORE IN THE PUBLIC SERVICES NEW ZEALANDERS REALLY VALUE, HEALTH, SCHOOL, LAW & ORDER THROUGH CAREFUL SAVINGS AND REPRIORITISATION TO GET BOOKS BACK IN ORDER. WHO WILL GET THE MOST IN TAX CUTS IN FAMILYBOOST? PEOPLE WHO STAND TO GAIN THE MOST ARE FAMILIES EARNING AROUND THE AVERAGE HOUSEHOLD INCOME WHO HAVE CHILDREN AND CHILDCARE AND HIGH CHILDCARE COSTS. THEY CAN GET UP TO $150 A FORTNIGHT IN A CHILDCARE PAYMENT REAP FUNDING EARLY CHILDHOOD FEES AS WELL AS TAX REDUCTION, INCREASES TO IN WORK TAX CREDIT. HOW MANY PEOPLE WILL THAT BE? THAT WILL ONLY BE A SMALL GROUP. I AM ADVISED THERE WILL BE AROUND 19,000 HOUSEHOLDS WHO WILL GET MORE THAN $200 A FORTNIGHT. AROUND 21,000 FAMILIES WILL QUALIFY FOR THE FULL $150 FAMILYBOOST PAYMENT. ON AVERAGE, THE AVERAGE FAMILY GETS $78 A FORTNIGHT. WILL TAX CUTS CONTRIBUTE TO INFLATION? NO. WE ARE FULLY FUNDING THE TAX RELIEF. THAT IS THE RESPONSIBLE WAY TO DO IT. WE ARE PAYING FOR IT WITH SAVINGS. THAT IS MONEY THAT WOULD OTHERWISE HAVE BEEN SPENT. AT THE MARGIN, WE ARE TAKING PRESSURE OFF INFLATION, ALLOWING INTEREST RATES TO BE LOWER. YOUR OPERATING ALLOWANCE, NEW MONEY DEDICATED IN THE BUDGET IS 3.2 BILLION, LESS THAN 3.5 BILLION THE LABOUR GOVERNMENT HAD BEEN PLANNING. TALK TO US ABOUT PLANS FOR NEW SPENDING IN THE COMING YEARS. WE HAVE DELIVERED ON THE COMMITMENT WE MADE TO PARE SPENDING BACK. AS WE LOOK AHEAD, THE BOOKS ARE LOOKING WORSE THAN WE HOPED. IF WE STUCK WITH SPENDING TRACK COMMITTED TO BUY LABOUR, WE WOULD GET THE BOOKS BACK IN BALANCE UNTIL 2031. THAT IS TOO MANY YEARS OF SPENDING MORE THAN WE EARN. IT WOULD ADD HUGELY TO DEBT. THAT'S WHY WE ARE COMMITTING TO MORE DISCIPLINED SPENDING. WE CAN GET THE BOOKS BACK IN BALANCE BY 2027-28 AND PAY DOWN DEBT. THAT IS IMPORTANT SO WE DON'T SETTLE OUR GRANDKIDS WITH DEBT. WHAT WILL BE THE IMPACT ON THE PUBLIC SERVICES WHEN YOU HAVE TO MAKE THE TOUGH DECISIONS? THIS IS A BUDGET FOR THE FRONT LINE. WE HAVE BEEN UPFRONT THAT WE THINK THE INCREASE IN RESOURCES TO THE BACK OFFICE OF PUBLIC AGENCIES AND LOW VALUE PROGRAMS HAS BEEN EXCESSIVE. MINISTERS HAVE GONE LINE BY LINE THROUGH PROPOSALS IN AGENCIES, IDENTIFIED SAVINGS AND REPRIORITISATIONS AND PUSHING THE FRONT MONEY INTO THE FRONTLINES OF HOSPITALS, CLASSROOMS AND POLICE. AND EDUCATION, ERICA STANFORD HAS FOUND MORE THAN $400 MILLION OF SAVINGS IN THE MINISTRY OF EDUCATION, SO SHE CAN MAKE SURE MORE MONEY IS AVAILABLE TO FIX UP MOULDY CLASSROOMS. THE ROLE OF FINANCE MINISTER IS ONE WHERE YOU HAVE TO WEIGH UP TRICKY CHOICES. IS THERE SOMETHING YOU WOULD LOVE TO HAVE FUNDED BUT COULDN'T EXTEND TO? THE THING IN MY HEART IS SOMETHING I CALL SOCIAL INVESTMENT. THAT IS ABOUT ENSURING WHEN WE INVEST FOR OUR MOST VULNERABLE, WE DO SO MORE EFFECTIVELY. WE DON'T HAVE THE APPARATUS YET, BUT WE WILL BUY THE NEXT BUDGET. I DETERMINED THAT INSTEAD OF SPENDING MONEY ON PROGRAMS THAT MAKE US FEEL GOOD, WE INVEST ON THE THINGS AND THE GRASSROOTS THAT ACTUALLY CHANGE PEOPLE'S LIVES. I WANT TO DEMONSTRATE THAT SOCIAL INVESTMENT WILL DO THAT. THANK YOU SO MUCH FOR YOUR TIME. LABOUR LEADER CHRIS HIPKINS HAS NOW WEIGHED IN. HE'S BEEN SPEAKING IN THE HOUSE, ACCUSING NATIONAL OF BORROWING TO PAY FOR ITS TAX CUTS. MR SPEAKER, THERE WAS ONE MAJOR TEST THAT NICOLA WILLIS HAD TO PASS IN TODAY'S BUDGET ` TO DEMONSTRATE CLEARLY THAT SHE WAS NOT BORROWING TO PAY FOR TAX CUTS. AND THIS BUDGET FAILS AT THE FIRST HURDLE. $10 BILLION WORTH OF TAX CUTS; $12 BILLION WORTH OF BORROWING! YOU DON'T NEED AN ABACUS TO FIGURE OUT THAT THIS IS A GOVERNMENT BORROWING TO PAY FOR TAX CUTS. LABOUR LEADER CHRIS HIPKINS. SHAMUBEEL EAQUB AND SHARON ZOLLNER. SHAMUBEEL, WHAT WILL TODAY'S BUDGET MEAN FOR HOUSE PRICES? NOTHING. IT IS VERY MUCH AT THE MARGIN. WE KNOW THE TWO BIG CHANGES ARE THE REMOVAL OF THE FIRST HOMEBUYER GRANT, WHICH WAS VERY SMALL IN THE SCHEME OF THINGS. THE OTHER THING IS THAT MAKES US MORE ATTRACTIVE TO BORROW MONEY FOR INVESTMENT PROPERTY, BUT THE RESERVE BANK IS GOING HARD-CORE IN HOW IT MANAGES LENDING. IT IS NOT CLEAR THAT THE BUDGET TODAY WILL BE HUGELY POSITIVE FOR THE HOUSING MARKET. TO BE CLEAR, THE RESERVE BANK HAS ANNOUNCED MEASURES AROUND HOW MUCH PEOPLE CAN BORROW. YOU ARE SAYING THAT WILL OFFSET WHATEVER INFLATIONARY PRICE PRESSURES MIGHT HAVE COME ABOUT AS THE CHANGES TO INVESTMENT LAWS. TO BE FAIR, AS ECONOMISTS, MARGINS OF ERRORS ARE BILLIONS OF DOLLARS. THE BROAD THRUST IS, IT IS FINE TO HAVE INCENTIVES AT THE MARGIN. PEOPLE WERE STILL BUYING RENTAL PROPERTIES, BECAUSE THE BET IS ON CAPITAL GAINS NOT CASH PROFIT. IT MAKES IT EASIER TO HAVE DEPRECIATION COVER BACK. BUT IF THE ABILITY TO BORROW, THAT SUPERCHARGES INVESTMENT PROPERTY. IT WILL NOT GET EASIER OVER THE NEXT NINE MONTHS. MANY LANDLORDS WILL FEEL MORE COMFORTABLE BECAUSE THEY WILL HAVE A BIT MORE MONEY IN THE BANK ACCOUNT. SOME OF THE CHANGES ARE AMBIGUOUS. THE BRIGHT LINE TEST CHANGE MAKES HOUSING A MORE LIQUID INVESTMENT. IF YOU ARE NEARING RETIREMENT, YOU ARE MORE LIKELY TO BUY AN INVESTMENT PROPERTY IF YOU ONLY HAVE TO HOLD IT FOR TWO YEARS TO AVOID TAXES. WE COULD SEE A SURGE IN LISTINGS. MAY BE IN SPRING. THAT COULD BE A DOWNSIDE RISK FOR HOUSE PRICES IF WE HAVE MORE CHOICE, SELLERS MIGHT HAVE TO CUT PRICES. LET'S LOOK AT THE TOP LINE ANNOUNCEMENTS. WHAT WILL BE THE IMPACT OF THOSE INCOME TAX CHANGES FOR AVERAGE WORKERS? IT IS NOT A GAME CHANGING AMOUNT. FOR MANY PEOPLE DOING IT TOUGH, ANYTHING WILL BE WELCOME. THE RESERVE BANK IS FOCUSED ON CONSUMPTION, SO ANY INCREASE IN HOUSEHOLD INCOME WILL REVISE THEIR FORECAST. THERE IS SO MUCH GOING ON. THE RESERVE BANK WILL REVISE DOWN THE FORECAST THEN UP. IN THEIR MODEL, THERE IS A WEALTH CHANNEL. WHAT CONSUMER GAIN IN TAX CUTS, THEY MIGHT GAIN IN THE WEALTH EFFECT. THERE IS LOTS OF MOVING PARTS. IF YOU LOOK AT THE INCOME TAX CUTS, DEPENDING ON THE TYPE OF HOUSEHOLD, POORER HOUSEHOLDS MIGHT GET HALF A PERCENT INCREASE. IT HELPS AT THE MARGIN, BUT THE INFLATION, WE HAVE SEEN BIGGER RATES. IT GETS YOU MAY BE BACK SIX OR THREE MONTHS OF PRICE INCREASES AT BEST. THE BOOST IS AT THE MARGIN, RATHER THAN A SIGNIFICANT ONE. TAX CUTS ARE EXPENSIVE. THEY COST BILLIONS TO GIVE EVERYBODY A TINY BIT OF EXTRA INCOME. THE NET EFFECT WILL NOT BE BIG. WHEN YOU LOOK AT FAMILYBOOST, SOMETHING THE NATIONAL PARTY SURPRISED MANY PEOPLE WITH. SOME PEOPLE FELT THEY WERE STRAYING INTO LABOUR PARTY TERRITORY. WE HAVE HAD THAT WITH THINGS LIKE WORKING FOR FAMILIES. THIS IS LIMITED TO 2 CHILDREN. 25% REBATE PER WEEK. BROWN PEOPLE HAVE MORE BABIES. THERE ARE ISSUES THERE WITH EQUITY. IT IS MORE ABOUT GETTING THE INCOME TO MIDDLE NEW ZEALAND. THERE IS A MYTHICAL MIDDLE NEW ZEALAND THAT EVERYONE WANTS TO MAKE HAPPY. THEY STILL BELIEVE THERE IS A MEDIAN VOTER IN NEW ZEALAND. I THINK PEOPLE ARE VERY TRIBAL. I THINK POLITICIANS SHOULD TRY TO KEEP VOTERS HAPPY. GIVE US YOUR TOP LINE TAKES. NICOLA WILLIS TALK ABOUT FISCAL RESPONSIBILITY, TRYING TO BALANCE TRICKY TIMES WITH HER SPENDING PRIORITIES. THAT SHE STRUCK THE RIGHT BALANCE? SHE HAS SPREAD THE DISAPPOINTMENT EVENLY. WHEN THE ECONOMY IS NOT DOING WELL, YOU HAVE FEWER LOLLIES TO GIVE OUT. PEOPLE WILL THINK SHE SHOULD HAVE CUT SPENDING HARDER. SOME PEOPLE THINK CUTS ARE UNACCEPTABLE. THERE ARE TOUGH DECISIONS TO BE MADE AT THE MOMENT. SHE PROMISED TO CUT TAXES, SPENDING AND REDUCE DEBT. SHE HAS DONE TWO OUT OF THREE. YOU SHOULDN'T PROMISE WHAT YOU CAN'T DO. MY DISAPPOINTMENT WAS THE TRACK FOR CUTBACKS IS NOT STRONG ENOUGH. IN THE BUDGET, WE NEED TO SEE A STRONG COMMITMENT THAT WE WILL BUILD BACK BETTER. THERE IS LOTS OF WORK AROUND STRUCTURAL POLICIES, BUT THE BUDGET WAS A GOOD OPPORTUNITY TO SHOW WE WILL INVEST. THANK YOU FOR YOUR TIME AND INSIGHTS. SHAMUBEEL EAQUB AND SHARON ZOLLNER. THIS SPECIAL WRAPS UP IN A COUPLE OF MINUTES. WELCOME BACK. NEARLY 1000km SEPARATE THE BEEHIVE FROM THE FAR NORTH, AHEAD OF THE BUDGET, TVNZ'S CHIEF CORRESPONDENT JOHN CAMPBELL TRAVELLED TO THE FAR NORTH TO FIND OUT WHAT PEOPLE ON THE GROUND WANTED. IT'S LIKE AN ECONOMIC COVID WITHOUT THE MASKS. MM. THAT IS HOW SHE DESCRIBES THIS ECONOMIC MOMENT. HOW SHE FEELING ABOUT THE DETAILS? SHE SAID IT WON'T MAKE ANY DIFFERENCE TO HER TO CLIENTS AT ALL. THE LAST THREE YEARS, IT HAS BEEN GETTING WORSE. PEOPLE ON THE MINIMUM WAGE, NOTHING FOR BENEFICIARIES. I'D CHILD I SPOKE TO CHILD POVERTY ACTION. WHO MONITOR THE IMPACT OF THE BUDGET. THEY SAID THE GOVERNMENT HAS PUT UP A POLICY PACKAGE KNOWING IT WILL INCREASE CHILD POVERTY OF NEW ZEALAND. WHEN NICOLA WILLIS TALKS ABOUT THE SQUEEZED MIDDLE, SHE REALLY MEANS THE SQUEEZED MIDDLE. THEY ARE SEEING NOTHING IN THIS BUDGET FOR THEM. YOU WIN ON A ROAD TRIP THROUGH TO THE FARM OFF AND SPOKE TO PEOPLE ABOUT THE THING THEY WANT TO SEE IN THIS BUDGET. THERE WERE SOME PRIORITIES, THINGS LIKE ROADS. THE BEEN TALKING ABOUT INFRASTRUCTURE, IF YOU LIVE IN THE FAR NORTH, THERE IS A SENSE OF DISCONNECT. NOT ONLY A CULTURALLY AND ECONOMICALLY ISOLATED, I EXPECT THERE WILL BE A RESPONSE AT SOME STAGE TO THAT. INTERESTING, LOOKING AT THE CHILD POVERTY, BUT YOU ARE REQUIRED TO PROVIDE THE CHILD POVERTY REDUCTION ACT WHAT YOU BELIEVE THIS WILL DO FOR CHILD POVERTY, AND INEQUALITY WILL RISE. PROJECTIONS ARE THAT ACTUALLY, CHILD POVERTY WILL TREND UP RELATIVE TO FAMILIES WITH HIGHER INCOMES. YOU CAN SEE THAT ROAD TRIP UP NORTH ON THE ONE NEWS WEBSITE. THANK YOU, JOHN. THAT'S US FOR TODAY'S 1NEWS Q+A BUDGET SPECIAL.THANK YOU FOR JOINING US TE KARERE IS UP SHORTLY, AND THE 1 NEWS TEAM WILL HAVE COMPREHENSIVE COVERAGE