The 2024 no-frills Budget

• Bryce Edwards writes – 

Today’s anti-government protests around the country will not be convinced by Nicola Willis’s budget. She has announced exactly what critics were expecting—a right-wing Budget containing tax cuts and further cuts to government programmes.

Yet the Budget is far from being the “neoliberal” or radical rightwing Budget that leftwing critics might have feared. Instead, it is positioned to win over the support of working people, and cleverly comes across as quite moderate.Willis even begins her Budget speech in Parliament with some provocative claims about being the true supporters of working people. She says: “Fortunately, the parties in this coalition Government are the parties of the worker. We want working people to keep more of the money they earn.” This will have the Opposition parties choking and spluttering.

Yet, a lot of working people will indeed happily receive what Willis is delivering in terms of “tax relief”. She says that her complicated array of changes to the tax system will deliver tax cuts to 3.5 million New Zealanders, or 83 per cent. She states: “Working-age New Zealanders benefit on average by $32 a fortnight ($832 a year)”, and “A single person earning $55,000 a year will be better off by about $51 a fortnight.”

This is mainly being delivered by adjustments to personal income tax thresholds, which will increase. Tax credits will also be expanded.

The debate will now be whether this “tax relief” will be enough to really make a difference, especially for those struggling with the cost-of-living crisis.

Nicola Willis has also put a lot of emphasis on trying to refute the idea that she is delivering “tax cuts for the rich”. She says in her Budget speech: “I have occasionally heard people say that tax relief only benefits the well-off. That is not true of this tax package. Our changes to the in-work tax credit, and introduction of FamilyBoost, tilt the benefits of the tax package to low-to-middle income working families with children.”

There is also an attempt to sell this Budget as one for “the squeezed middle of New Zealand”, and Willis says she’s most concerned about “the shift-workers, the people working two jobs, the families making sacrifices for their kids.”

She also attempts to speak out to provincial and working New Zealand by essentially telling them not to listen to the Wellington media, commentators and vested interests: “On Budget Day, it’s easy to get caught up in the analysis, the commentary and the voices in the lobby. Actually, that’s not what this Budget is about.”

It’s an intelligent message, positioning her Budget and Government as “for the people”. This is the closest a New Zealand government has come to projecting a populist message.

In a sense, National can argue that their Budget isn’t any radical neoliberal rightwing Budget. After all, there’s much more spending on core welfare state services. They claim to be spending an extra $2.01b on the Health budget and an additional $1.01b on Education. Even school lunches have an expenditure of $478m.

Overall, there is an extra $3.2b in spending. That’s not austerity.

In fact, many on the political right will be disillusioned or disappointed with the 2024 Budget. After all, core crown spending is going up. Those on the right might allege that Willis’ government is just as addicted to spending as the last.

But Willis justifies her relatively large spending by saying they are “weaning” the country off big spending. She says that her Government had the choice of trying to bring spending levels back to pre-Robertson levels but decided to take it slowly. In her Budget speech, she says, ” The Government is not planning an aggressive fiscal consolidation. We are taking a deliberate, medium-term approach and will not overreact to movements.”

No frills Budget

The Government promised a Budget that was more about substance than style. In a sense, they’ve delivered few real surprises. Much of it is just a reannouncement of earlier spending decisions.

In terms of branding, the various Budget documents continue the “no frills” theme—the main publication is plain white. But other booklets are National/serious blue with a trim of NZF-black and Act-pink. Each press release has a blue-black-pink branding line.

Other parts of the Budget PR are focused on the message of being “no-nonsense”, with Willis and the various press releases talking repeatedly about “Delivery” and taking “decisive action”.

Of course, the usual spin and insignificant elements of the Budget get oversized attention. The tiny $24m already announced for Gumboot Friday mental health is celebrated again. And much attention goes to heralding a $49m increase for Te Matatini national festival to bring kaka haka to the regions.

Enough to assuage Maori protests?

Te Pati Māori will find much to condemn in the 2024 Budget. There has apparently been a $300m cut from Māori initiatives to reprioritise money into other areas. Shane Jones has justified this, saying that some of the problems the Government is dealing with in the Budget “need more than a brown dot approach”. Jones also talks about “Shifting from Co-governance to co-investment” in the Government’s approach to working with Māori.

In a stylistic sense, the Budget is undoubtedly presented as more culturally sensitive than others. There appears to be more te reo in the Government’s Budget speeches and media releases than ever.

And Nicola Willis has even worked into her Budget speech the exclamation: “Tihei mauriora!” This won’t be enough to assuage any protesters – especially in her strong Kelburn accent – but for many, it will illustrate how this government is carefully positioning itself and its Budget in a more sophisticated way than might have been expected.

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Dr Bryce Edwards is Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington.  This article was first published by the Democracy Project.