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Ryan Bridge: How much cash will we get back from tax cuts? · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: How much cash are we all going to get back
• 0:02
  Speaker 1: from tax cuts? That's the question this morning. Nicola Willis
• 0:05
  Speaker 1: is soon going to make an announcement about their timing
• 0:08
  Speaker 1: and potential value if, of course, they get back to
• 0:10
  Speaker 1: the Treasury benches. The good news out of yesterday's pre-foo
• 0:14
  Speaker 1: is that the books are out of structural deficit this year.
• 0:18
  Speaker 1: That means when the government borrows new money going forward,
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  Speaker 1: it'll be for capital spending, not to keep the lights on.
• 0:24
  Speaker 1: We've essentially been borrowing money by issuing bonds to pay
• 0:28
  Speaker 1: for day-to-day spending. Fixing potholes with a credit card when
• 0:31
  Speaker 1: the cost of borrowing is heading north is not a
• 0:33
  Speaker 1: particularly smart way to run the books, is it? Now,
• 0:36
  Speaker 1: the numbers, the result, is helped by the fact that
• 0:40
  Speaker 1: the economy is growing. When the economy grows, our wages
• 0:43
  Speaker 1: grow with it. Inflation then pushes our wages into a
• 0:48
  Speaker 1: higher tax bracket. It's what they call bracket creep. We've
• 0:51
  Speaker 1: talked about it lots on the show. You end up
• 0:54
  Speaker 1: paying more tax because the tax brackets don't change even
• 0:57
  Speaker 1: when your wages do. So the government books are improving
• 1:01
  Speaker 1: off the back of Kiwis paying more taxes. How much
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  Speaker 1: is that worth is the question. Well, the pre-foo reckons
• 1:08
  Speaker 1: around a third of the extra revenue that the government
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  Speaker 1: coffers will get comes from bracket creep, comes from us
• 1:16
  Speaker 1: paying more. Patrick Smalley at Business Desk estimates $ 15 billion
• 1:21
  Speaker 1: will be collected over five years from this. That creates
• 1:25
  Speaker 1: about $ 3 billion a year in potential tax cut kitty
• 1:29
  Speaker 1: created by wage inflation. So the question now is, when
• 1:32
  Speaker 1: does this happen? And will Nicola Willis' coalition partners allow
• 1:37
  Speaker 1: it to happen? Tax cuts. As the old saying goes,
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  Speaker 1: to the victor goes the spoils. Taxpayers are the real
• 1:43
  Speaker 1: victors here, the real heroes. And more money in our
• 1:47
  Speaker 1: pockets to offset higher prices will surely be a welcome thing.
• 1:52
  Speaker 1: For more from Early Edition with Ryan Bridge, listen live
• 1:55
  Speaker 1: to News Talk ZB from 5 a.m. weekdays or follow
• 1:58
  Speaker 1: the podcast on iHeartRadio.