National is adamant it can provide a mini-budget by Christmas, despite slow progress in coalition talks.
National has been continuing individual talks with ACT and NZ First but the trio still has not met as a group.
“We’re making progress each day, we’re obviously getting to the nub end of the negotiation and we’re all conscious that New Zealanders want a government up and running,” National deputy leader Nicola Willis told First Up.
Willis said National first needed to get agreement with each of the smaller parties about the terms on which it would work with them before they could move forward together.
There were areas of disagreement and agreement but ACT and NZ First accepted that tax was a big part of what the government needed to be about, she said.
“We are intending to deliver on tax reduction. We set out our ideal for how that should be achieved before the election.”
A mini-budget would be ready for the holidays, she said.
‘More an opening of the books’
“I’ve always put emphasis on the word ‘mini’ because we’re not talking about a Budget in the sense of the one that you get in May but more an opening of the books done with the half-yearly economic and fiscal update to see the true state of the New Zealand economy and the government’s finances.”
This needed to be done before a Budget, she said.
“And then, as an incoming government, we need to respond to that set of challenges by making clear our legislative and policy priorities and you’ll see us introduce legislation before Christmas to respond to our economic situation to get the economy growing again, to deal with the cost of living, to ensure that we’re delivering more money into New Zealanders’ back pockets.
“We will get on with the job but don’t expect the full pony show as we do in May.”
National’s plan to fund tax cuts through a tax on foreign home buyers is proving to be a major sticking point in coalition negotiations.
NZ First voted for the foreign buyers ban while in coalition with Labour and is flatly opposed to partially rolling it back.
That was a big problem for National, which plans to pay for tax cuts with the billions the party says the tax will raise.
Economist says ‘not too hard’ to rephrase policies
Former Reserve Bank economist Michael Reddell was critical of National’s tax plan heading into the election.
Asked if it was ditched, how easy it would be to fill a $740 million hole in its Budget, Reddell told Morning Report the numbers were material but did not dominate the whole story.
It would not be too hard for National to rephrase some of their promises, he said.
“Even if they push back the income tax cuts by three months, that’ll save them $500 million, they could delay the child care subsidies they were promising or the reintroduction of interest deductibility.”
This could get them over the next 12 to 18 months, he said.
“Beyond that, you sort of get into the overall question of how are we going to get from here back to surplus. It was always going to be challenging, even if the foreign buyers tax was on the table.”
