Many Kiwis around the country learned yesterday that they'll be paying less in taxes soon – but do you need to do anything for it?
Nicola Willis's first Budget as Finance Minister was dominated by tax cuts, with average-income households getting a cut of $102 per fortnight under the revised brackets.
She said it meant New Zealanders would get their first tax cuts in 14 years, something she said was "well overdue" and would help hardworking people.
But the Government's "modest" tax cuts are "crumbs" compared to the "slash and burn" cuts to public services, the Greens said.
Do you need to do anything?
Finance Minister Nicola Willis told 1News business correspondent Katie Bradford this morning that people didn't need to do anything to get their tax relief money.
"All of that tax relief – other than the FamilyBoost payment – will just go automatically into your pay.
"That's an important aspect of this," she said. "On average, a household with children will get $78 a fortnight.
"On average, a household without children will get $60 a fortnight."
Asked about the $25 a fortnight that minimum wage earners would receive, Willis was again positive.
Find out if you will receive a tax cut and how much here
"It is a lot more than they would've got under the alternative, which was no tax relief.
"What's more, they will benefit from a better managed economy," she added. "Peoples' individual circumstances vary, but we've ensured in this Budget that we are supporting those public services people really rely on."
Will the cuts drive inflation?
"What Treasury is forecasting is that inflation will come back into the target band this year.
"That's what the Reserve Bank is looking for so that they can have the confidence to reduce interest rates.
"Overall, our Budget takes pressure off inflation – and of course, through tax reduction, we're taking dollars that would otherwise be spent by the Government, we're putting them in New Zealanders' pockets.
"Some people will spend it — others will save it."
She rejected the suggestion the cuts would be inflationary.
"They need that relief, that's why we've prioritised tax reduction," Willis said. "The way we've done it is very responsible.
"We're funding every dollar of that tax relief through reprioritisation and new savings measures.
"What that means is, they're not going to be inflationary," she said.
'It's a backwards Budget' - Labour
Labour finance spokesperson Barbara Edmonds said people would have preferred the tax cut money went towards health and education.
She told Breakfast the Government had broken promises around cancer drug funding.
National had pledged to fund 13 new cancer drugs, but Willis said it wasn't possible in this Budget.
"They recklessly promised them," Edmonds said, "they shouldn't have promised them without doing their homework.
"I think it's a really bad and a reckless choice."
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