Budget 2024: Nicola Willis unveiled tax cut triumph but an overspending tragedy - Heather du Plessis-Allan

OPINION

There are two ways of looking at a Budget to decide if it’s a winner or not.

The first is to judge the Budget only politically. As in, will the Budget help the current government win votes?

On that measure alone, the answer’s got to be yes – 83 per cent of households will get tax cuts, and who doesn’t want a tax cut?

Sure, it’s become a little fashionable in inner-city suburbs for nice people to say to each other that they don’t want one because they’d much prefer the money was spent on school lunches or benefit increases or employing more doctors.

But ask them again from July 31 when the money hits their bank accounts and the answer may be less convincing because once it’s there, it’s hard to give back.

These tax cuts are well overdue for the hard-working Kiwis who grew resentful under Labour about how much was done to help beneficiaries, while they got nothing. For just that signal alone, the Budget works well for National.

The tax cuts are well overdue full stop. We have gone 14 years without our tax brackets being adjusted. National’s Steven Joyce had them pencilled in but Labour won the 2017 election and stopped them.

There was nothing noble in Labour doing that. All they did was rake in more and more tax every year from hard-working Kiwis by stealth. It didn’t look like they were taking more because nothing changed.

But fiscal drag meant the average income went from below $48,000 to $76,000 – and because tax rates didn’t change, average wage earners who used to pay a maximum 17.5 per cent in tax were now paying 33 per cent.

Nicola Willis has done right by Kiwis to adjust those brackets. She actually should’ve gone further.

The 33 per cent tax rate that kicked in at $70,000 has moved to kick in at $78,101. She should’ve moved it closer to $95,000. That would take us back to the same tax levels we were paying in 2010, the last time brackets were adjusted.

But, back to the start, there is a second way of judging this Budget: fiscally.

On that measure, this is a monumental let-down. For all the talk that this business-minded Government would manage the books properly and cut wasteful spending, they have disappointed.

Unbelievably, Willis is spending more in this Budget than Grant Robertson did in any of his big-spending budgets.

And if the forecasts prove correct, she will spend even more every year from now until as far as we can see into the future, which is 2028.

By then, Willis will be spending twice what Steven Joyce spent in the last Budget of the previous National-led government. There is no justification for government spending doubling in 11 years.

She will keep borrowing too. By 2028, her debt will be nearly four times what Joyce left us with.

Given the financial trouble Willis keeps telling us we are in, she should have cut government expenditure. Given the wastefulness of Robertson, there should have been plenty to cut.

But the razor gang only found $4.43 billion in annual cuts. That’s nothing.

In a Budget that spent $176b, that is pocket change. Probably, that was to avoid freaking out the left who seem to believe it is a dystopian nightmare to cut back on buying laptops for teachers.

If you judge this Budget by whether it is good for New Zealand, it is deeply disappointing and Nicola Willis is no more than our favourite big spender Grant Robertson in drag.

If you judge this Budget by whether it wins the favour of the ordinary Kiwis who will never read the Budget’s “Time Series of Fiscal and Economic Indicators” spreadsheet, it’s an absolute winner.

Heather du Plessis-Allan Drive, Newstalk ZB, 4-7pm weekdays