Tax cuts still in the mix for Finance Minister Steven Joyce's first budget

Finance Minister Steven Joyce

Steven Joyce tells NBR Auckland is running out of room to extend the roading network

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Tax cuts for lower and middle-income earners are one of four key areas Finance Minister Steven Joyce is looking at for his first Budget in May.

Speaking at an event hosted by Massey University and the Auckland Chamber of Commerce, Mr Joyce outlined the strength of the country's economy and the Crown's own books, and said his focus for the May 25 Budget will be on improving public services, building infrastructure, repaying debt and cutting taxes.

Joyce has carried on with his predecessor's target of reducing net debt to about 20% of gross domestic product by 2020, from the 25.5% level it's at, "to make sure that we can manage any shocks that may come along in the future," and "remained committed to reducing the tax burden and in particular the impact of marginal tax rates on lower and middle income earnings, when we have the room to do so."

New Zealand's economy is still forecast to experience robust growth over the next couple of years, fuelled by low interest rates, strong construction activity and high rates of tourism and migration. That's also likely to bolster the Crown's coffers, with figures today showing an operating surplus of $9 million in the six months ended December 31 on higher consumption tax take than expected.

Mr Joyce didn't announce any details about potential tax cuts, although work to investigate demand management tools for roads could see petrol taxes and road user charges replaced with other initiatives, such as electronic road tolling. He also ruled out introducing a regional fuel tax, saying "they are administratively difficult, prone to leakage and cost-spreading, and blur the accountabilities between central and local government."

The Crown is also interested in looking at other options for longer-term funding for new infrastructure, including the use of private finance for certain projections, he said, name-checking the proposed Penlink alternative route between the Whangaparāoa Peninsula and State Highway 1 at Redvale in Auckland.

New roads have been a core part of the government's infrastructure programme over recent years, and the Crown's capital spend will be about $7 billion this year, about twice what it's been in recent times, Mr Joyce said.

On housing, Mr Joyce said the government has received $1.79 billion of proposals seeking support from the $1 billion housing infrastructure fund, which could help build 50,000 new dwellings.

"At this stage, however, only a small number of the 17 proposals received through the expressions of interest phase would result in projects being advanced earlier than previously planned by councils," he said. "We want to see more ambitious projects that will have a more positive impact on housing supply over the next five years."

The government will also investigate other financing options to introduce private sector capital to sit alongside council and government funds.

(BusinessDesk)


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In summary:

- Aucklanders who have been pushed out to outlying suburbs will pay for tax cuts for central folk

- services will seemingly keep their frozen (declining per capita) budgets they've had for a few years now...waiting lists will grow longer etc.

- three whole terms of inaction an inefficacy overseeing the terrible housing crisis in Auckland will continue in much the same direction.

Beaut election bribe, Stephen!

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The housing crisis in Auckland. The answer is simple, MOVE. There are lots of other places to live at a fraction of the cost. No congestion, crime. no parking meters, walk to shops and wonderful caring communities.
Make a life changing decision, MOVE.

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I agree - and believe that will be what happens in the next couple of years.

Why would young Kiwis coming out of university want to stay in Auckland and pay expensive housing costs via low salaries, and then fund the pension of their millionaire landlords as well?

With 200,000 new apartments coming on line in Melbourne and Brisbane (and both these already a more reasonable salary/cost of living equation), I think we'll start to see a new brain drain driven by National's astounding ineptitude.

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Tax cuts. Yes Please. Thank you.

#FreeMan

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Surely we can save money and give hard workers some of their own money back if we start means testing the pension. Ridiculous handing out welfare checks to rich old folks.

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Equally, "Working for Families". Needs a major overhaul. Policy for the politicians. Have our people become so useless?

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Agree - they could achieve so much more if they remove the tax advantages of investment property, slap a stamp duty on foreign purchases, and means test the pension (perhaps against the value of one's primary residence, for example - to avoid welfare fraud via family trusts etc.).

Working for Families wouldn't be needed if the government was doing a half decent job on managing housing.

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