New Zealand prime minister Chris Hipkins is shrinking ambitions and expectations ahead of the next budget, promising an “orthodox, no-frills budget” focused on cost of living and economic expansion.
Hipkins gave his pre-budget speech and press conference on Thursday – previewing intentions for the last major block of government spending before October’s election, and mapping out the final stretch of Labour’s second term in government.
Since his ascent to leader, Hipkins has vowed to “refocus” the government from the wider ambitions of Jacinda Ardern’s leadership, promising a laser focus on “bread and butter issues” and the economy. “Rather than a long laundry list of worthy ideas, I want the government to do a small number of things very well. And those small number of things need to be focused on growing our economy,” Hipkins said.
“The reality is the government was previously doing too much, too fast, and the effect of that was being tied up with issues taking time and money away from where our primary focus needed to be,” he said. “I’ve made the cost of living my top priority as prime minister.”
Hipkins’ speech and announcements on Thursday placed almost as much focus on what the government would not be doing as what it would – while not announcing major new policies or spending plans, he ruled out several policy packages, including a cyclone levy to pay for the damage of recent catastrophic storms, which are expected to cost between $9bn and $14.5bn. He also ruled out other changes to the tax system – which have been under discussion after a government report this week showed the wealthiest New Zealanders pay a smaller fraction of tax on their income than the poorest earners.
“We’re not going to rock the boat by introducing major new taxes like a wealth tax or capital gains tax or a new cyclone levy in the budget. I’ve made that absolutely clear today,” he said.
The government would instead aim to cut back in some areas to cover those costs, with the overall goal of bringing government spending down “while also delivering core services”.
While he did not announce any specific measures on Thursday, Hipkins said this week that there would be “some more in the budget that’s about targeted support for those who need it most with the rising cost of living.”
The prime minister did flag that the budget would include funding boosts to science, skills and trades training, and investment in infrastructure – which sustained significant damage during Cyclone Gabrielle. “These three areas will all receive extra support in the budget,” he said.
