Audrey Young Budget 2024 Analysis: Money’s Tight – You Better Believe It

Follow NZ Herald’s live report of the 2024 Budget announcement

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


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She’s not kidding when she says things will be tight in the coming years.

In this budget, she gave herself $3.2 billion in new money, a lot less than in recent years.

After that, she has allocated herself only $2.4 billion per year, and once she subtracts the pre-commitments of $1.4 billion per year, an annual increase in health care cost pressures, she will only have dollars per year. One billion a year!

She describes them as “tight but realistic” and promises in her speech “we intend to stick to them.”

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That means one thing: disability is permanent. Cuts to government institutions will become business as usual. Buckle up.

She has to sound like she means it because the Reserve Bank has to believe it before it cuts the official cash rate. And she will desperately want this to happen before September next year – the Reserve Bank’s latest estimate.

Willis and Prime Minister Christopher Luxon are starting to say they will “do more with less.”

Here’s why: The economy has deteriorated so much since the coalition took office, which predicted tax revenues have fallen by $25 billion since December.

Net core debt is expected to be $17 billion higher than on the debt track Labor left.

And that means the debate over whether the government is borrowing money for tax cuts will continue.

The government’s tax cut package – as advertised with adjustments to tax thresholds plus a handful of other changes – cost $14.72 billion over four years.

They were funded by a series of measures, including cuts to government programs, taxing online casino operators and eliminating depreciation on commercial buildings, totaling $14.84 billion.

Some will say that the latter compensates for the former. Others will say that without the tax cuts, Willis wouldn’t have to budget for an additional $17 billion in debt.

The books show a surplus of $1.4 billion over four years. The jury is out on whether that is credible or not. It is still a long way off and there are many variables, not least the economic growth forecasts (1.7 percent, 3.2, 2.9 and 2.7).

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Whatever happens, Willis can be trusted to bring a sense of optimism to her ability to deliver results.

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