- The Government's promised tax cuts come into effect on Wednesday.
- Asked on Breakfast whether he would donate his tax cut to charity, Prime Minister Christopher Luxon said "absolutely".
- Opposition leader Chris Hipkins said he didn't believe his tax cut was necessary and Labour MP Jan Tinnetti says Kiwis are "losing more... than what they're gaining".
Around 3.5 million Kiwis will have a few extra dollars in their pocket as tax cuts kick in from Wednesday, July 31.
The Government’s $14 billion package will give 83% of New Zealanders tax breaks starting at $12.50 a week, depending on various entitlements.
Prime Minister Christopher Luxon said his tax relief would be going to charity.
"My wife and I, and our family, give away a lot of money and we’ve always done that since we started out as 20-year-olds. So, I mean, it’s something we always do so that’s where my tax relief will be going."
National MP Chris Bishop said his tax cut would be going towards an extra coffee "and I'm going to donate some to charity as well".
"It's going to make a real difference in people's lives," National MP Simeon Brown added.
However, the taxpayer-funded reprieve has been offset by National’s reintroduction of prescription charges, slashed public transport discounts, and the axing of the First Home Buyers Grant.
Leader of the Opposition Chris Hipkins said he didn't believe his tax cut was necessary.
"I think that now is the time when we should be investing that," he said.
Labour MP Jan Tinnetti was also critical, saying Kiwis are "losing more out of this than what they're gaining".
"The cost of living is still increasing. I think it's not going to make much difference to Kiwis," Labour list MP Dr Deborah Russell added.
To find out if you will be receiving a tax cut and by how much, go to the Government's Budget tax calculator.
More relief for household budgets
There's another cut that's easing the pressure on Kiwis' wallets – the fall of wholesale interest rates.
The drop has led to a mortgage war between banks.
"Different banks have different appetites at the moment – making sure they are getting the best rate; if there’s a cash contribution, making sure they can take advantage of that," mortgage broker The Mortgage Girls’ Elyce Peters explained.
Kiwibank economists believe the Reserve Bank should cut the Official Cash Rate in August. However, ANZ was predicting the rate would be lowered in November, giving time to see whether the tax cuts were inflationary.
With rate cuts inching closer, more homeowners were moving to six-month or one-year loan terms.
"Because rates are changing so fast, making sure they're not locking in too early so that they can take advantage of any decreases before it comes up," Peters said.
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