Subj : Labour warns of 'smoke and mirrors' in upcoming Budget 2024
To   : All
From : News
Date : Tue May 21 2024 12:36 pm

Labour's finance spokesperson has warned of "smoke and mirrors" in the
coalition Government's upcoming Budget.


The Budget is due to be delivered on May 30, and will be Finance Minister
Nicola Willis' first in the role.


In a speech at the Hutt Valley Chamber of Commerce this morning, Barbara
Edmonds said she was not convinced Willis had yet learned "either the lessons
of history or the obligations of public finance management, despite being
surrounded by some of the best public servants in the business".


"I am not convinced her much vaunted tax cuts meet the public finance tests
of fairness or stability."


She said the tax cuts did not meet the four tests "espoused" by Edmonds' role
model, the late Sir Michael Cullen - tax cuts must not require borrowing;
services should not be cut to fund them; tax cuts should not exacerbate
inflationary pressures; and tax cuts "should not lead to greater
inequalities".


Willis said in a speech earlier this month that the Government would
"responsibly deliver" tax cuts in the Budget. She said at the time: "Its
focus will be income tax relief aimed at middle and lower-income workers. The
relief will be meaningful, but modest."


Strong public service
Edmonds said the Government didn't seem to understand what the public service
did, including that a strong public service supported the private sector.


"We are feeling it right here and right now in our region with economic
activity slowing down.


"I've even heard of retailers in the Wairarapa and Kapiti Coast laying off
staff and cutting hours to keep the lights on, so the impact of the cuts is
spreading far wider than just the Wellington CBD."


She said there would be "big numbers" on Budget Day. "But I ask you to be
aware of the smoke and mirrors.

"Is it really a meaningful Budget increase or just what was set aside by the
previous Labour Government bundled together to make it look big, plus a
little bit more that doesn't even meet inflation?"


She said the public would also likely to see "the goal posts shift to make it
appear as if the Government is making things better".


"But like we've seen in previous National-led governments, yes, the housing
wait list may have come down - but more people were sleeping in cars, less
homes were being built, kids were learning in mouldy, damp classrooms, gyms
and hallways, and sewerage was running the down the walls of hospitals."


She said the future of Labour's economic priorities was based on four things
- cost of living support, a "level playing field" for small and medium
businesses, "not preferential treatment for those businesses with the
flashest lobbyists", long-term economic planning that endured beyond one
Budget cycle or electoral cycle, and infrastructure investment aimed at
lifting business confidence.


But she said anyone hoping for a tax announcement from Labour today was right
out of luck. "I do not have a juicy soundbite on wealth tax or a capital
gains tax."


'We came to NZ for a better life' - Edmonds
Edmonds also shared some of her personal story as a prelude to the speech,
describing growing up as part of a Pacific migrant family.


"My parents came to New Zealand, the land of milk and honey, so that me and
my siblings could have a better life and better education.


"What they couldn't plan for was my mum being diagnosed with cancer a few
years later.


"My mother passed away when I was four, she was only 35.


"We buried her on my fifth birthday. My father was a widower at the age of 40
with four kids under the age of 11."

Her father raised Edmonds and her siblings on the Domestic Purposes Benefit
until she was old enough to go to college, then retrained as a social worker.


"It was not uncommon to have bare cupboards in our house, but Dad did his
best to ensure we thrived with the little that we had," she said.

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