Venu Menon
Wellington, May 10,2024
Minister of Finance Nicola Willis was tested on the floor of Parliament by Opposition members who raised questions about her pre-Budget 2024 speech to the Hutt Valley Chamber of Commerce on May 9.
The minister had confirmed in that speech that this year’s Budget would include income tax relief aimed at “middle- and lower-income workers.”
Willis had also addressed the three-party coalition government’s widespread job cuts in the public sector as a cost-cutting measure to drum up savings.
The finance minister’s pre-Budget speech promised “a significant funding boost for the health system and targeted new investment in other frontline services including education, disability services and police.”
The tax relief package will increase “the take-home income of 83% of New Zealanders over the age of 15 and 94% of households.”
Those who will miss out on tax relief are the 17% of Kiwis who receive a benefit or do not pay income tax.
The government has set an operating allowance of less than $3.5 billion for Budget 2024, “a first in recent years.”
But it was the Social Investment Agency, rechristened from the earlier Social Wellbeing Agency under Labour, that emerged at the centre of the debate in Parliament.
As the Minister for Social Investment, Willis, while parrying a query from Labour’s Carmel Sepuloni, made it clear that investment in the social sector henceforth would rely on “an evidence and analytical approach.”
It meant using “data, evidence, and modern analytics to direct investment where it will actually make a difference. The data is already being collected and it gives us a pretty good idea, but not absolute certainty, about which children are likely to be in greatest need of help,” Willis told the House.
But Labour’s Ginny Anderson was sceptical that the government’s social investment approach risked ending up as “deficit-based data that treats people as numbers.”
Willis responded with a stout defence of the government’s data–based approach to social investment, saying it would “give a young child the opportunity to live a productive, rewarding life rather than a life of dependency and, potentially, crime. Data matters.”
That prompted Labour’s Barbara Edmonds to corner Willis with a query on tax breaks for landlords. “What data or evidence does she [Willis] have that her tax breaks for landlords will reduce rents?” Edmonds asked.
The House heard that the finance minister was advised by the New Zealand Treasury that her proposals “will put downward pressure on rents.”
The Opposition members’ strategy on the floor of the House relied on picking lines from the minister’s pre-Budget speech.
Edmonds, for instance, asked if Willis “dread[s] what comes out of the forecasters’ mouths” because she “knows her actions are causing the deteriorating economic conditions and her Budget will do nothing to fix it?”
Willis then launched into a litany of woes faced by everyday people, from “fewer customers coming through the doors of small businesses” and “inflation [eating] away at their purchasing power” to “high interest rates are hurting them when they go to pay their mortgage.”
Earlier in the day, Willis fielded questions from the audience of business leaders, who had gathered at the Hutt Valley Chamber of Commerce to hear her pre-Budget speech, and remarked that their questions were “sharper than what members [usually] ask in Parliament.”
Venu Menon is an Indian Newslink reporter based in Wellington
