Latest / Early Edition with Ryan Bridge / Geof Nightingale: independent tax expert on National's budget responsibility rules

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Geof Nightingale: independent tax expert on National's budget responsibility rules · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Nationals said no new taxes on working people? What about
• 0:03
  Speaker 1: the others restated its budget responsibility rules, So surplus by
• 0:07
  Speaker 1: twenty eight twenty nine debt level below forty percent of GDP,
• 0:10
  Speaker 1: government spinning back towards thirty percent of GDP. Here's Nichola Willis.
• 0:14
  Speaker 2: It went out more than twenty percent of GDP in
• 0:18
  Speaker 2: just under sixty years under the previous government.
• 0:21
  Speaker 1: Labor, the Greens to Party, Mari and Top will tell
• 0:23
  Speaker 1: you that they can spend more, tax more, borrow more,
• 0:26
  Speaker 1: and then it will all work out. To the independent
• 0:28
  Speaker 1: tax expert Jeff Nightingale with me the Smaller Chief.
• 0:31
  Speaker 2: Good morning, Good morning, Ryan.
• 0:33
  Speaker 1: So what are you when they say no new taxes
• 0:34
  Speaker 1: on working people? What you what taxes do you reckon?
• 0:37
  Speaker 1: They're going to increase?
• 0:39
  Speaker 2: Yeah, it's left it open there, but didn't it. I
• 0:43
  Speaker 2: think the way I'd interpret that is that they're not
• 0:47
  Speaker 2: going to change the income tax rates and they're not
• 0:50
  Speaker 2: going to change the business tax rates, small business tax rates.
• 0:56
  Speaker 2: So I think you know that really if they stick
• 0:59
  Speaker 2: to that, that really only leaves open things like levees
• 1:03
  Speaker 2: and fees and other small charges and maybe some tweaks
• 1:07
  Speaker 2: to some of the rules. Around the productibility of certain items.
• 1:10
  Speaker 2: But they seem to be ruling out to border tax rises.
• 1:15
  Speaker 1: Yeah, I reckon they'll go with a campaign on a
• 1:18
  Speaker 1: bed tax that sort of thing. Anyway, let's talk about
• 1:22
  Speaker 1: the actual rules. Well, they're not even rules, aren't they
• 1:24
  Speaker 1: they're just guidelines and goals what they've stated because they've
• 1:27
  Speaker 1: stated them before and we haven't stuck to them.
• 1:30
  Speaker 2: Yeah, that's right. So they're basically a restatement. Each year,
• 1:34
  Speaker 2: when the government puts together it's budget, it has to
• 1:36
  Speaker 2: buy law by the Public Finance Act, release a fiscal
• 1:39
  Speaker 2: strategy report. And these three rules that yesterday they call
• 1:43
  Speaker 2: them budget responsibility rules, they are already in the fiscal
• 1:46
  Speaker 2: strategy report despite that we haven't run a surplus since
• 1:52
  Speaker 2: twenty and nineteen. So if we've been in deficits now
• 1:56
  Speaker 2: for seven years and we're forecast to stay and deficits
• 1:59
  Speaker 2: for another three, it will be a decade of deficits.
• 2:03
  Speaker 2: Having said that, they are the right rules and it's
• 2:05
  Speaker 2: good to see them recommitting to them.
• 2:08
  Speaker 1: What about net coll Crown debt expected to be what
• 2:12
  Speaker 1: almost forty six percent of GDP at the end of
• 2:14
  Speaker 1: this financial year, and they Treasury when they last looked
• 2:18
  Speaker 1: at this said fifty percent was okay, and national saying
• 2:21
  Speaker 1: actually needs to be under forty. Why the divergence.
• 2:25
  Speaker 2: I think that the thing about debt is that by
• 2:30
  Speaker 2: world standards, we've got relatively low government debt to GDP.
• 2:34
  Speaker 2: But we shouldn't be comfortable with that because we are
• 2:37
  Speaker 2: a small, global exposed economy and we need a lot
• 2:42
  Speaker 2: of balance sheet capacity, debt capacity to respond to shops
• 2:45
  Speaker 2: and so we've used debt to respond to the Christ
• 2:48
  Speaker 2: to Jurith quakes, have used it to respond to COVID,
• 2:50
  Speaker 2: and that's good. We need to hold that capacity to
• 2:53
  Speaker 2: do that, but in the good years we need to
• 2:55
  Speaker 2: reduce that debt so we have the capacity. So forty
• 2:59
  Speaker 2: seems a sense of target. Of course, if you go
• 3:01
  Speaker 2: back a decade, the target was twenty percent of GDP,
• 3:04
  Speaker 2: so as forty percent is still a big increase.
• 3:07
  Speaker 1: Jeff Nightingew Independent Tax Sexpert. For more from early edition
• 3:11
  Speaker 1: with Ryan Bridge, listen live to News Talks it'd be
• 3:14
  Speaker 1: from five am weekdays, or follow the podcast on iHeartRadio.