Incoming Prime Minister Christopher Luxon says tax cuts will definitely go ahead.
This is despite a word of caution from the ACT Party.
"We said we are going to go ahead and deliver tax relief for low and middle income New Zealanders. That is a key part of our commitment to New Zealanders," Luxon said on Monday
Like National, ACT is keen on lower taxes, but dialed back its own plans after Treasury's Pre-election Economic and Fiscal Update in September.
ACT leader David Seymour thinks his talks with Christopher Luxon will have to have the economy at centre stage.
"There will be a third person in that conversation, and that will be fiscal reality," Seymour told Stuff.
Seymour is known to be strongly focused on reducing government spending, arguing this will help fight inflation.
But Luxon says giving tax cuts is entirely appropriate.
"We have got people who are doing it tough, they ae working incredibly hard and they deserve to keep more of their own money. We have got a very effective tax plan and it is self-funded," Luxon says.
There have been suggestions that the new Government will issue a mini-budget before Christmas to deal with tough economic conditions.
But the likely incoming Finance Minister Nicola Willis gave no assurance that this would definitely happen.
"Our first step is to form a Government, that is what we are focussed on right now an everything else is subsequent to that," she says.
In answer to another question about any potential vulnerability of tax cuts to new economic information, Luxon says he wants to deliver tax relief "and that is what we are planning to do."
Meanwhile Luxon says the process of forming a new government will be done discretely.
"The focus is on three things," he says.
"There are still 570,000 special votes that need to be counted....and so we have to wait until that dynamic is played out. Having said that, we are having to build relationships, and to work through arrangements with respective parties," Luxon says.
"We are going to do that confidentially, in private, and we are not going to be doing that through the media."
In the meantime, talks will be held with other parties one at a time.
"We will be having discussions with the parties but we will do that privately, professionally and constructively and we will not be giving you a blow-by-blow account daily," Luxon says.
Luxon also laughed at rumours that Winston Peters would be offered the position of speaker. He refused to specifically rule it out, but appeared to quash it by saying "a lot of people's 'reckons' turn out to be very wrong."
83 Comments
Understood the suggestion from WP/NZF that a mini budget needs to be prepared and presented before the end of the year has been taken up by the new government? Surely that outcome needed to be determined and evaluated before such an announcement. A running start is all well and good but not if you are in a hurdles race and shortsighted.
ps. WP would be an impossible fit for speaker but Shane Jones would be an interesting proposition.
Better get used to it.
Luxon will pivot any moment if it's advantageous for himp
Many Kiwis are in for a rough awakening as they learn about the consequences of a nact govt.
The sad truth is a lot of voters voted for change without understanding what's on offer.
People with property should be doing alright though.
I feel like we are stuck in a cycle inverse to what it should be - during economic booms the govt (usually Labour) spends up big and wastefully. We swing right for the inevitable crash and cut back on everything, doubling down on the pain for many people. Definitely a result of short termism and the desire to gain power from the other party based on oppositional arguments (we won't be like party X) and the failure to coherently plan and deliver long term projects for the country.
So do people who voted for Labour, except they prefer to do it from large corporations as GABOUR increases compliance costs so only corporations will be able to rent out properties.
None of the parties, that I know of have stated that house prices need to fall dramatically. If they had I for one may have voted them on that reason alone.
I predict those who voted for NACT to make the property market great again will be disappointed.
Winston will target the FBB reversal as part of any negotiations. Luxon is doubling down on the income tax cuts, so I can see the reversal of interest deductibility being dragged out longer than expected to help balance the books. Finally, they seem firm on returning the RBNZ to a single 'price stability' mandate, which should mean greater upside risk for the OCR.
Thank the Reserve Bank for dropping interest rates to help the economy through the covid pandemic and the banks who can create any amount of money for people to buy houses with. More houses have been built under this government than at any time since the 1970s. https://www.stats.govt.nz/news/record-number-of-new-homes-consented-in-…
Why do you think people didn't notice? Of course you know whats happening and others simply missed what you thought was obvious. It must be great being so perceptive. Have you ever considered that other people may see something you are not?
Seriously I would prefer it if Luxon said no tax cuts, like Seymour its the sound decision even though it may not be the best political one.
ah the excuses come out already, we can't do this or that because of the previous government. every new government uses that excuse to get out of election promises. BUT that only lasts a short time, the same people shouting a couple of months that nothing was being done, or not fast enough or enough of it will now shout they cannot do anything because of the previous lot and so on and so on
The world is on the brink of major conflict; too many people, not enough planet.
But our budding leader is wasting time - his and ours - bleating mantra.
And some folk have had it suggested to them, that they perhaps should not be repeating it; that such myopia perhaps doesn't qualify as 'balanced'.
Just sayin...
As Bill English quietly, seriously said to Michael Cullen in 2008 “you lost.” Mind you he had the reciprocal comment for nine years. In each case here, each identity, demonstrated the ability to rise beyond being a loser. Good role models for some I would suggest.
The new govt will get NZ moving. Luxon and ACT talk tax cuts, renewal, and ditching red tape, Labour and maoris talk death, capital gains, and wealth taxes.
It was a resounding thrashing for socialism, and what a pleasure to read through the legislation that the new government plan to ditch. The last 6 years has been like attending a very long funeral.
I'm going to employ people and spend a very large sum of money, a project I can undertake now with a degree of optimism.
With the change in all development costs in the last 2 years there is no way a tax deduction and a bit of red tape will significantly alter the economics. Construction costs, labour, machinery, finance costs are all massively elevated.
I hope you bought well because it could be a very tiring project. I hope you have good financial modelling to support your analysis and attitude.
It's been a thoroughly depressing last 6 years as Comrade Ardern and her lackeys drove this country into the ground. I drove down to the Auckland CBD during the lockdown and checked out the boarded up shops, the urban decay and bludgers with their hands out. A sombre place indeed. Another 3 years of Labour and we might have been calling in the receivers.
Pretty sure Luxon's mob is going to get this country going again.
Didnt you make a ridiculous amount of tax free property money under labours rule ? If Luxon gets it going, what does that look like ?
Im pretty positive you will see more of the same, he will likely be full of energy for a while, it will slowly be beaten out of him.
The lack of political nous is already showing through. He says in one breath he won't conduct coalition negotiations in public and then in the next breath guarantees his party's tax cuts, which are already considered unwise by his number one coalition partner.
Once he actually gets a Ministerial briefing - I suspect Treasury will tell him the same.
Generally he is rated as an accomplished businessman. My personal experience of Air NZ under his stewardship however is not exactly in sinc with that. Politically though he is a greenhorn, no doubt about that, and it readily shows. However political panache and subtlety is well and good but basic good intent and selflessness is more than equal and undoubtedly that is what would win the electorate over. Let’s all wait and see.
You are right there Foxglove how is he a businessman he is management. A businessman sees (creates) a product or service takes it/provides it to the market grows the business arranges the finances to grow or sustain the business then worry about rent repayments employees taxes etc etc. Luxon walked into a govt owned airline that when came close to failure due to covid got a billion dollar bailout its like the banks to big to fail. All Luxon is is a manager.
It's explained in the article above;
Like National, ACT is keen on lower taxes, but dialed back its own plans after Treasury's Pre-election Economic and Fiscal Update in September.
ACT leader David Seymour thinks his talks with Christopher Luxon will have to have the economy at centre stage.
"There will be a third person in that conversation, and that will be fiscal reality," Seymour told Stuff.
What David is saying is, no matter what Luxon says about delivering on those cuts - as a needed coalition partner, such plans have to be okayed by ACT and will need to be fiscally responsible. If unaffordable, they'll be off the agenda.
having just seen the national party negotiating team you could be correct there, i would suggest he will ruffle a couple of feathers as he won't be TOLD what he is to get and with such an inexperienced negotiating team they find him quite a hard nut who won't just back down and take crumbs also taking pot shots and snide remarks will not be tolerated and may make him get his back uo and dig his heels in
Businesses can now proceed with certainty that this govt. isn't going to tax them more, spending will increase, there's certainty and optimism in the air, not the depressing crap about global warming, more tax on petrol and diesel cars, death, wealth taxes and CGT.
The Labour Govt has squandered billions on boondoggles, and there's been infighting because they want to tax us more. OMG!!!! good riddance.
Government spending is one of the major components of the economy and produces income and spending for people and businesses that flows through the entire economy.
http://www.matchesinthedark.uk/spending-chains-sankey-diagrams/
How about this 'government spending' under Labour?
Pike River, the abandoned TVNZ/RNZ merger, the moronic gun buyback, Auckland Light Rail, 3 Waters, the Harbour Bridge Cycleway, the non-existent Income Insurance Scheme and 14,000 extra civil servants?
Your hard-earned tax dollars at work folks.
I found an interesting article the other day about the net wealth of OECD governments. In New Zealand government assets minus liabilities leaves us in the positive by around $30,000 per person. That's very unusual, the UK for instance after many years of austerity budgets and selling off the family silver has a net government balance of minus $60,000 NZ dollars per person.
Government debt is the currency which the government has spent but has not yet taxed back and cancelled and which the government is holding in the form of bonds and this money represents household savings held in the domestic currency,
https://theconversation.com/how-government-deficits-fund-private-saving…
https://democracyjournal.org/arguments/the-truth-about-government-debt/
Taxation doesn't finance the government it only deletes currency again after its spending. We spend the governments money and it never spends ours because taxpayers don't issue our currency. https://www.levyinstitute.org/publications/can-taxes-and-bonds-finance-…
https://www.bassettbrashandhide.com/post/alex-holland-labour-s-failures
Other peoples money wasted.
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