Opposition derides Finance Minister Nicola Willis' mini-Budget

Labour says the government's "nothingburger" mini-Budget shows finance minister Nicola Willis' claims of self-funded tax cuts do not add up.

Willis unveiled her promised mini-Budget on Wednesday alongside the Treasury's Half-Year Economic and Fiscal Update, outlining plans to tighten public spending while safeguarding public services - and delivering the government's promised tax relief next year.

It set out $2.61 billion of savings made since the coalition took office, and showed she had directed government agencies to find $1.5b of savings per year, informed by their staff numbers from 2017.

Labour's finance spokesperson Grant Robertson said in a statement the "so-called" mini-Budget was nothing more than "a litany of distractions, delays and diversions which leave the country without any certainty or coherent economic plan".

"It's the nothingburger," he said. "I just don't see anything here ... New Zealanders go into Christmas none the wiser as to what the economic plan of this government is and how those tax cuts will be paid for."

Far from Willis' original claims about the mini-Budget, all she had done was add to the uncertainty for New Zealanders, he said.

"New Zealanders were told several things about the mini-Budget. The first of those is that they would have certainty about how the tax cuts would be paid for, that is not here. We were also told that we would know the details of the cuts to public services that were going to be used to fund tax cuts. That is no in here either, today.

"What we've seen is some shuffling around of money which the Treasury themselves have indicated - in my brief reading of the documentation - represents actually a risk to the accounts, because while some money might be saved from withdrawing some money from some projects there is other funding that is required that is not yet accounted for."

Labour's leader Chris Hipkins said it was an "absolute flop"

"It basically is the government's half-yearly fiscal update which gets released every year. Every government's done it. There was no detail in it about how the government are going to pay for all the spending commitments that they've been making.

He said it was clear the government had no plans of their own and could not make their own numbers stack up.

"They clearly don't have any plans of their own, they still don't know how they're going to make their own numbers stack up ... they've had some time in government to try and make their numbers add up and they still can't do it."

'Different ways of delivering' tax relief - Willis

Willis, speaking to reporters before heading into Parliament on Wednesday afternoon, defended her claims about "snails and snakes" left in the books by the previous government.

"I just think the scale and nature of those cliffs is unlike anything we've seen before. For the government to deliver a Budget in which Pharmac funding would fall off a cliff, I don't think that's acceptable."

She suggested the size of the government's tax cuts would be the same - but the settings for them could still change.

"We're going to make sure people get the tax relief we promised, we're just going to look at some different ways of delivering that.

"The ACT Party have a view about the way tax relief can be delivered in terms of thresholds and credits. National campaigned on a different policy and together we're taking advice on what's the best way to get the cash we promised into people's bank accounts."

ACT leader David Seymour said they were committed to delivering the level of tax relief that was in National's election manifesto "in the fairest way possible".

"I think it's a sign of strength that we've got a government that is prepared to listen to different perspectives and different advice because we've just had three years of listening to one perspective, one piece of advice, and we're billions of dollars in the hole."

Willis said one way of increasing revenue was to go after tax evaders.

"Tax evaders will help pay for tax cuts, yes they will. We are going to up the audit function of the IRD and go after anyone in New Zealand who isn't paying their fair share of tax.

"I've been advised that by doing that we could get hundreds of millions of dollars more into our government books, and that will help pay for responsible tax reduction."

Robertson said Willis' narrative about the previous Labour government consistently ignored reports by global ratings agencies and international organisations which backed the "strength and resilience of our economy".

"The facts are that the New Zealand economy is around 7 percent larger than before Covid, unemployment has been at record lows, wages are rising and our debt levels are lower than most of the economies we compare ourselves to. It has been a tough year for New Zealanders with cost of living pressures as inflation peaked. But it is now on a downward track."

He said he thought she was trying to make accusations that did not stack up, and pointed particularly to some suggestions she had made at the mini-Budget's release about the format of Budget documents.

"If she wants to reformat some aspects of the Budget, go ahead, but I don't think she's presented any evidence today that would counter the views of the international ratings agencies and the other international agencies who have said the New Zealand economy has been well managed over previous years."

'An exercise in gaslighting New Zealand'

Green Party Finance spokesperson James Shaw said it showed a "breathtaking willingness" from National to say one thing and do the opposite when in government.

"National are making life harder for people on lower incomes. They fought a campaign on cutting the cost of living for people and in fact they are increasing the cost of living, so to me it's an exercise in gaslighting New Zealand."

He said the lowest-income New Zealanders would see the cost of living go up because of the removal of lower-price public transport and the linking of benefit increases to inflation rather whichever was higher between inflation or wage growth.

"It is no good for National ministers to parrot their talking points about supporting people to make ends meet, only to make decisions that will do the exact opposite.

"The decision to axe 20 hours free ECE to two year olds will put families under huge pressure. Thousands of children will now not be able to have the best possible start in life.

"Parents all over the country will be forced to cut back on food to pay the bills. I am also very worried that the future of free school lunches has been put in doubt, with National identifying a programme that makes sure children do not go hungry as a 'fiscal cliff'."

He also criticised the decision to scrap the Government Investment in Decarbonising Industry (GIDI) fund.

"There were something like 60 or 70 projects that funded but the two really big ones headline were the New Zealand Steel arrangement and the one with Fonterra that between them cut something like two million tonnes of CO2 going into the atmosphere ... every year.

"You take that support for industry away, the obvious thing is that actually industry isn't going to invest in the same way it was ... in order to achieve the same outcome they've either got to reduce the amount of ETS units available which will drive those prices up."

He said the lack of detail about how the government would pay for its tax cuts pointed to its struggle to deliver on the promise that it would be funded by new revenue.

"We are the only country in the OECD that does not have a stamp duty, a wealth tax or a capital gains tax of some description, which if we did have that would enable us to ensure that people on middle and low incomes would be able to get those tax cuts and it wouldn't even touch this side of the books."

'Climate deniers and those ... focused on their rich mates' - Te Pāti Māori

Te Pāti Māori co-leader Debbie Ngarewa-Packer said the mini-Budget was "so mini it's non-existent for those that are really struggling".

The party was disappointed, but not surprised, she said.

"There's no surprises. We knew this was going to be a government that didn't have a heart for Māori, we've seen that it didn't have a heart for those that are struggling for their humble families, for those that need to have some certainty for their children to get to mahi and things.

"What we are seeing is the climate deniers and those who are more focused on their rich mates that are in control of the nation at this moment and it has some dangerous effects for us - and sadly it's going to be a long three years."