Political and economic commentator Bernard Hickey is asking who's going to miss out with this year's Budget.
Prime Minister Chris Hipkins announced yesterday the "no frills" Budget won't include a wealth or capital gains tax and a levy to help pay for the recovery from Cyclone Gabrielle.
It comes as Inland Revenue released its report on the tax New Zealand's top earners paid on their income, finding that the 311 wealthiest families paid an effective rate of only 9.4% — less than half of what the rest pay.
Speaking on Breakfast today, Hickey said it's "quite hard to say to the public it's time to buckle down, it's time to tighten the belt, we're sharing the pain with you when there's 311 people who could have added $3.3 billion in taxes in one year if they'd just payed the same rate as everyone else."
Meanwhile, the cost of cyclone recovery will be about $4.5 billion for the Government and $9 billion overall and "the real question in the Budget will be who's missing out to pay for the bridges and the repairs", he said.
Hickey believes the Government has tried to stall the falling housing market this week for the sake of families that measure their economic comfort by looking at the value of their house.
This is emblematic of an economy that consists of "a housing market with bits tacked on" and "a government which focuses on rewarding the middle", he said.
A government that "isn't directing the funds to those who need it the most at the lower end and at the same time appears to be doing nothing to people at the top end who are paying half the rate of those in the middle to lower parts of the income spectrum", Hickey stated.
He claimed "rewarding the middle" consisted of middle class tax breaks, such as first home buyer subsidies.
The capital gains tax, once a real possibility under a Labour government, was made unpopular by an aspirational story espoused by the opposition, Hickey claimed.
"What you're doing when you put in a capital gains tax is you remove the way for an aspirational middle to get to the top… It's like someone trying to take a Lotto ticket away from you, even though you know you're probably not going to win, you could win and that's the painful thing for an economy which has bet everything on the housing market — it's addicted to it now."
Hickey warned we're now in a world of "low target politics" and that the Government is telling homeowners "this is your country".
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