New Zealand’s government unveiled its budget plan, addressing the country’s soft economy, rising unemployment, and weaker balance sheet. Finance Minister Nicola Willis emphasized that the budget, while providing modest tax relief, would not solve all economic challenges but demonstrated what could be achieved with care and discipline.
The budget included changes to personal income thresholds and tax credits, aiming to boost lower- and middle-income earners by NZ$3.7 billion. Prime Minister Christopher Luxon’s National Party promised relief for those struggling with living costs, mortgage rates, and rental prices.
However, the government faced criticism for cuts to back-office functions and initiatives that were seen as unfairly targeting the Indigenous Maori population. Protesters supporting Maori rights gathered across the country, expressing concerns about reduced economic and political rights for Maori.
Despite the budget reducing new spending and outlining significant savings in various sectors, opposition leader Chris Hipkins criticized the lack of capital expenditure in health and education. The government predicted a budget deficit for 2023/24 and delayed the return to surplus to 2027-28.
Analysts noted that public debt was not a significant constraint on New Zealand’s sovereign rating, with expectations for net government debt to stabilize around 35% of GDP. The government emphasized that reducing new spending would help contain inflation, currently above the central bank’s target.
Overall, the budget aimed to navigate the economic challenges facing New Zealand, with forecasts predicting a contraction followed by growth in the economy and a return to the central bank’s inflation target band.