The Kākā by Bernard Hickey
The Kākā by Bernard Hickey
What to look for in the ‘mini’ Budget

What to look for in the ‘mini’ Budget

Willis has warned Labour left ‘fiscal cliffs’, ‘snails’ & ‘snakes’ for National; Detail on scale and nature of tax cuts and how they’ll be paid for in focus; Eyes on surplus date & borrowing needs

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Nicola Willis has alleged all sorts of fiscal shenanigans by the previous Labour Government, and today she will have to justify those claims. Photo: Lynn Grieveson / The Kākā

TL;DR: Finance Minister Nicola Willis will publish her first ‘mini’ Budget at 1pm today. It should detail her earlier warnings about the ‘fiscal cliffs’ and ‘snakes and snails’ she says Labour left for National and both the scale and nature of the tax cuts agreed in coalition negotiations, along with how they’ll be paid for.

It should also detail the the Budget’s return to surplus, the new Government’s net debt track and its borrowing requirements after scaled back investment and spending plans.

Elsewhere in the news this morning:

  • ANZ started passing on recent falls in wholesale interest rates through fixed mortgage rate cuts announced last night;

  • Under urgency and without promising it in its 100 day plan, the new Government is repealing Labour’s Tax Principles Bill that forced the IRD to report on the fairness of new tax rules; and,

  • The earth’s energy imbalance between solar radiation absorbed and energy reflected into space rose to a record high 2.86 watts/square metre above the 2000-2009 average in October, almost double what it was a year ago, NASA data reported via Leon Simons/X (See chart below)

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A day of reckoning for Willis’ ‘fiscal cliffs’ and ‘snails’ claims

Finance Minister Nicola Willis has alleged all sorts of fiscal shenanigans by the previous Labour Government in recent weeks, including that previous Finance Minister Grant Robertson left undisclosed ‘fiscal cliffs’ and ‘fiscal snails’ for the National-ACT-NZ First coalition to discover upon opening the books.

Making those allegations without detail opens up Willis, Robertson or Treasury to accusations of either misleading the public, or hyperbole, Treasury must disclose all such fiscal matters publicly in its Pre Election Fiscal Update (PREFU). We’ll find out more detail after 1pm today when Treasury releases Half Yearly Economic and Fiscal Update (HYEFU) with Willis’ ‘mini-Budget’.

Thomas Coughlan has written a useful preview over at NZ Herald-$$$ detailing Labour’s claims of the 155 ‘fiscal cliffs’ left for it by National in 2017, along with Thomas’ own analysis of 190 lines of spending totalling $3 billion from the PREFU of spending allocations that ‘run out’ over the coming four years.

In essence, the ‘fiscal cliffs’ were disclosed and are relatively small at 1.4% of total Government spending.

News briefly elsewhere this morning of note

The new Government has acknowledged it did not consult with iwi before deciding to axe Te Aka Whai Ora in what appears to be a clear breach of Te Tiriti principles. RNZ

The Gore District Council predicts it will cost $465 million to upgrade its three waters infrastructure in the next 30 years, and may request a meeting with the new government about how to fund the work. Stuff Rachel Kelly

Other ministers besides Christopher Luxon are learning Te Reo at the expense of the Government, including Finance Minister Nicola Willis RNZ Russell Palmer, despite Willis ordering bonuses for Te Reo speakers cancelled and Luxon saying this earlier in December: "In the real world, outside of Wellington and outside the bubble of Parliament ... people actually pay for it themselves. It's quite normal".

Quote of the day

Higher nominal GDP has a good side

“Whether driven by productivity, inflation or migration, strong nominal GDP growth works wonders on indebtedness!” ANZ NZ Chief Economist Sharon Zollner via X

Chart of the day

What happens more energy is trapped in our atmosphere

Leon Simons via X: “Why is 2023 so F*cking hot? Because our planet is now absorbing 2.2 W/m² more heat from the sun than it did the first decade of this century. And because the extra greenhouse gases keep most of that additional heat on Earth. This is the most important graph in the world.”

Map of the day

Keep an eye out more more Middle East conflict in the days ahead

Ian Ellis via X

Cartoons of the day

Rod Emmerson via NZ Herald-$$$ and X
Sharon Murdoch via The Post-$$$ and X

Timeline cleansing nature video of the day (sort of)

Paul Webster via X

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PS: My apologies for yesterday sending the wrong Dawn Chorus podcast with the email. I updated the post online to include the right one. Today’s Dawn Chorus is the correct one…

PPS: Tomorrow’s emails and podcasts on Gravy Day will be the last for 2023. We resume publication on Monday, January 15. Unless a PM resigns again before that without notice ...

The Kākā by Bernard Hickey
The Kākā by Bernard Hickey
Bernard Hickey and friends explore the political economy together.