WELLINGTON: New Zealand on Thursday unveiled a tax-cutting election-year budget that the ruling National Party said will help families as it looks to win a record fourth consecutive term in power.
Finance Minister Steven Joyce said about 1.3 million families would benefit by an average of NZ$26 (US$18.32) a week, with adjustments to the tax thresholds making couples on a medium wage more than NZ$40 a week better off.
“Our economy is performing well and that’s a tribute to the hard work of New Zealanders,” Joyce said, while Prime Minister Bill English said the budget “shares the benefits of growth”.
Joyce said a key part of the budget was a NZ$2.0 billion-a-year family incomes package “designed to provide better rewards for hard work, to help families with young children meet their living costs, and improve incomes for those struggling with high housing costs”.
However, the financial gains are meant to take effect in April next year, more than six months after New Zealanders go to the polls on September 23.
Federated Farmers, a powerful voice within New Zealand’s agriculture-based economy, described the budget as the “first shot in an election year spend-up”.
But opposition Labour Party leader Andrew Little called it a “one dollar bill budget” that did not address the country’s housing shortage, adding that low-income earners would benefit by a dollar or less from the tax reductions.
The winners were “top earners who take home most of the tax benefits”, he said. “It’s not a budget for the future, it’s a budget for September 23.
“Nine years under this National (Party) government, New Zealanders are asking why their rent is rising so fast… and why in this beautiful country of ours do we have the highest teen suicide rate.”
Joyce, in his first term holding the purse strings, said the budget invested significantly in public services and infrastructure as economic growth was expected to hit 3.1 percent for the next five years.
Treasury forecasts also showed surpluses growing from NZ$1.6 billion this year to NZ$7.2 billion in 2020/21, with the government on track to meet its target of reducing net debt to around 20 percent of GDP in 2020.
“This budget sets a new medium-term debt target of 10-15 percent of GDP by 2025, to ensure we have the capacity and the resilience to respond to our next economic shock or natural disaster,” Joyce said.
The centre-right National Party won the previous three elections under the leadership of John Key, who resigned in December. English also the National Party leader when they lost an election in 2002.