Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor ahead of the release of Budget 2025

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Jenee Tibshraeny: NZ Herald Wellington business editor ahead of the release of Budget 2025 · Best of Business

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  Speaker 2: Nikola Willis has said she's going to deliver a no
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  Speaker 2: BS budget tomorrow. So janatib Shaney has five questions she
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  Speaker 2: wants answers to. She's with us now, howg and a
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  Speaker 2: Hey Heaver. First question is how much they save on
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  Speaker 2: pay equity?
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  Speaker 3: A Yeah, that's the big question. Look, that was the
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  Speaker 3: thing that sort of shocked us all. The government came
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  Speaker 3: out without any warning and changed that change that rule.
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  Speaker 3: You know, that could save billions of dollars at the
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  Speaker 3: expense of people who work in jobs dominated by women.
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  Speaker 3: Their pay rises won't be as large as might otherwise
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  Speaker 3: be the case. So question one is how much will
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  Speaker 3: a tightening of the pay equity regime save.
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  Speaker 2: Let's see, I think ten billion plus by the way,
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  Speaker 2: but as more than ten billion, but not as much
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  Speaker 2: as seventeen billion as estimated.
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  Speaker 3: Yeah, yeah, look possibly, and that would be over the
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  Speaker 3: four year period.
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  Speaker 2: Okay, So obviously it's been pretty well signaled that there's
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  Speaker 2: going to be changes to key we save. I imagine
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  Speaker 2: you're going to look at that. But the other one
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  Speaker 2: will be there is some indication there will be tax changes.
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  Speaker 2: What are you expecting.
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  Speaker 3: Yeah, Look, the thing is the government has said that
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  Speaker 3: it wants to support economic growth, and it's also said
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  Speaker 3: it wants businesses to invest more in technology, tools machinery
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  Speaker 3: to support productivity. So one way of doing that is
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  Speaker 3: that it could allow businesses to write off more depreciation
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  Speaker 3: on some of their tools and equipment and so on.
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  Speaker 3: That would lower their tax bills and encourage them to
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  Speaker 3: invest more in these things. The questions will be, does
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  Speaker 3: the government say, okay, you can write off, you know,
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  Speaker 3: write off more depreciation on any type of asset, or
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  Speaker 3: does it narrow it to save money and say only
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  Speaker 3: certain types of assets, or does it say only certain
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  Speaker 3: types of sectors can can get this type of tax relief.
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  Speaker 3: That so, if it's us go down that track, which
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  Speaker 3: which some people think it will, that that is specifically
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  Speaker 3: what I'll be looking for. Surplus, that's the big one.
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  Speaker 3: So people who listen to Nichola Willis will hear that
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  Speaker 3: she's talking about a return to surplus within the four
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  Speaker 3: year forecast period. But the surplus that Nicola Willis is
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  Speaker 3: referring to is not the traditional measure it's the one
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  Speaker 3: that excludes the impact of acc So I think what
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  Speaker 3: we will be doing is keeping focused on the original
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  Speaker 3: measure of the surplus that's called the ober gal, not
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  Speaker 3: the ober gaal X. And at the end of last
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  Speaker 3: year the Treasury didn't see a return to surplus within
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  Speaker 3: the forecast period. So and then, yeah, what.
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  Speaker 2: About Treasury's forecasts? What are you looking for there?
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  Speaker 3: Well, you know, I think I'm going to be quite
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  Speaker 3: interested to see that they do this. I mean, outside
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  Speaker 3: of the normal stuff. I'm interested in some of the
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  Speaker 3: sensitivity analysis they do. So every year they say, well,
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  Speaker 3: if GDP growth is fast or slower, you know, bigger
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  Speaker 3: or smaller, or interest rates are higher or lower, whatever
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  Speaker 3: than we expected, this could be the impact on the
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  Speaker 3: government's books. Now, this year, I think that test will
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  Speaker 3: be particularly interesting because the world is so uncertain, the
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  Speaker 3: chances of Treasuries forecast being wrong is pretty high. You know,
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  Speaker 3: Donald Trump is doing all sorts of things, So you know,
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  Speaker 3: I'd be quite keen to look at that because you know,
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  Speaker 3: that sort of thing can make quite a big difference
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  Speaker 3: on the books. And the one that I've looked at
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  Speaker 3: in the past is just that global globally, bond yields
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  Speaker 3: are higher than what was expected in December, and this
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  Speaker 3: is pushing up the cost of the government's debt servicing costs.
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  Speaker 3: So because of what's happening in the US, because of
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  Speaker 3: the amount of government debt we have, it's costing the
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  Speaker 3: government more than expected to service its debt, you know,
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  Speaker 3: more than expected just in December. So you know, that
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  Speaker 3: has an impact on the finances and on the return
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  Speaker 3: to surplus. So, you know, the those scenarios I think
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  Speaker 3: will be particularly interesting this year because of all the uncertainty.
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  Speaker 2: Look forward to seeing you there. Jeanne Jeanne to Trainie,
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  Speaker 2: the Herald's business reporter.
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