A Budget Policy Statement that said a little less than expected

While Nicola Willis wouldn't give any details on its size, she said a package of tax cuts is definitely still coming in this year's budget.

Mōrena, and welcome to The Bulletin for Thursday, March 28, written by Catherine McGregor.

In today’s edition: Disruptive classroom behaviour problem bad, and getting worse; Fast-track consent plans may break international trade deals; Five people arrested for attempting to paint Gisborne’s rainbow crossing white for a second time. But first, the finance minister may not be able to say how big the tax cut package will be, but one thing’s for sure – tax cuts are still happening.

A detail-light Budget Policy Statement

The cupboard is a lot more bare than originally thought, and a surplus is at least two years away – but tax cuts are still on. That’s the key message from the Budget Policy Statement (BPS) delivered on Wednesday by finance minister Nicola Willis. Her statement “threw up more questions than it did answers,” writes Interest’s Dan Brunskill, “with a number of key details conspicuously absent”, most notably the operating allowance for the budget. The operating allowance, as you’ll recall, is the “net new operating funding available at each budget for new policy initiatives or cost increases in existing policy” and it is usually set out in the BPS. However Willis wouldn’t commit to an exact figure yesterday, only saying that it would be less than the $3.5 billion planned by the Labour government and included in Treasury’s Half-Year Update in December.

Omission a ‘combination of hypocrisy and incompetence’

Willis defended her reticence on the operating allowance by saying she was trying to be more precise. "The previous finance minister would publish an operating allowance in the updates and then he would completely break it in the budget,” she said, “well, we're a different kind of government.” Labour said that was laughable. Chris Hipkins called the delay “a combination of hypocrisy and incompetence” which showed the "level of dysfunction that this government seems to be operating under". He pointed out that Willis had already had three more months than usual to come up with a number. The BPS is usually delivered in December but was postponed by the late-running coalition negotiations.

Come what may, tax cuts are happening

While Willis reiterated her promise that the tax cuts would not involve any new borrowing, she refused to be drawn on how big the overall package would be. “It is possible even Willis doesn’t fully know the full details of tax cuts,” surmises the Herald’s Claire Trevett, given that the package is likely still being negotiated with coalition partners. In BusinessDesk (paywalled), Pattrick Smellie says it’s clear the “cacophony of economic rationalists and opposition activists condemning tax relief as fiscally irresponsible and potentially inflationary has been water off a duck’s back”. Having staked so much political capital on tax cuts, National is duty-bound to deliver them. The case for addressing “fiscal drag” (otherwise known as “bracket creep”, or taxation by inflation) is strong, writes Smellie, but with less money to play with, “a betting person would probably assume” there will be little or no change to the top two personal tax thresholds in Budget 2024.

What would Nicola Willis do (to placate her partner)?

Among the journalists attending the BPS lock-up and press conference was The Spinoff’s Joel MacManus. While other reporters peppered Willis with questions about operating allowances, net core Crown debt indicators and fiscal strategy reports, MacManus writes that he was distracted by an important text from his partner: “Did you remember the present for my dad?” 

“I thought to myself, WWNWD (What would Nicola Willis do)? Suddenly, like a gap of light in the jungle, the words tumbling out of the finance minister's mouth offered me a path out of my relationship conundrum. 

“I can absolutely confirm that I have fulfilled my commitment to buy the present that I promised I would deliver,” I typed back. “I can say with 100% confidence that I have purchased a present for your dad. And I can assure you that when he opens that present, it will be meaningful and targeted to him.”

Right now, we need your support more than ever

The Spinoff has estimated that the number of full-time journalists in New Zealand may have halved since 2018 Census data was published. As the media landscape continues to change, The Spinoff is not immune to the drastic advertising slowdown impacting the viability of media in this country. To those who already support us, thank you. If you don’t and are able, we’d be very grateful if you’d consider becoming a Spinoff member or donating today.

Duncan Greive
Founder

Disruptive classroom behaviour problem bad, and getting worse

One in four school principals see students physically harm others or damage or take property on a daily basis, according to an Education Review Office report. Half of teachers are spending nearly an hour a day responding to disruptive behaviour. The report finds that violence and disruption in the classroom is so bad it warrants a national approach, with ERO’s Ruth Shinoda telling RNZ’s John Gerritsen the inconsistency in rule-setting between schools means “it's quite hard to get parents and schools on the same page about expected behaviour”. Last year an OECD survey of 15 year olds gave NZ the bottom score among developed countries for classroom behaviour and one of the worst of the 81 participating nations and territories. However that report was criticised by some educators for relying on reporting by students, as NZ teens may be more willing to call out bad behaviour than those in other countires. Education minister Erica Stanford says she will be following up with the ministry on how the latest report's recommendations can be implemented, noting that the ministry is already taking action on two of them – banning mobile phones and looking how it can improve teacher training.

Fast-track consent plans may break international trade deals

The government’s plans for a fast-track consenting regime may fall foul of clauses in New Zealand’s trade deals with the United Kingdom and the European Union, Newsroom’s Sam Sachdeva reports. Examples of potential conflicts include a NZ-EU agreement that requires NZ to conduct an environmental impact assessment for any new energy operation, and another UK deal that notes that environmental protection laws should not be weakened in the service of trade and investment. In response to an OIA, the Ministry of Foreign Affairs and Trade said it did not provide any advice on how the proposed new law would affect compliance with international treaties. However infrastructure minister Chris Bishop told Newsroom, “As part of the policy process, officials, including Mfat, have considered the impact the new fast-track bill could have on these obligations.”

Click and Collect

• Five people have been arrested for attempting to paint Gisborne’s rainbow crossing white for a second time. It had been repainted by authorities overnight on Wednesday after being vandalised on Monday.

• Authorities are investigating allegations, aired in the documentary Escaping Utopia, that Gloriavale women were trafficked into coerced marriages in India.

• The internal affairs minister is investigating whether the DIA’s deputy chief broke any rules by helping to organise a passport for a friend of Fred Again. (We have some tips on how the DJ should have handled it).

• Climate scientist Dr Jim Salinger is the New Zealander of the Year for 2024.

• Sanitarium is scrapping production of all its breakfast cereal brands except Weet-bix and Up & Go, with 49 jobs set to be cut as a result.

Feeling clever? Click here to play 1Q, Aotearoa’s newest, shortest daily quiz.

Right now on The Spinoff

Māori Television launched 20 years ago today. Jamie Tahana looks back on the ground-breaking channel’s survival and impact across two decades. Stewart Sowman-Lund has some advice on how to graciously receive a favour from a government official (step one: don’t tell your 2.5 million followers). Joel MacManus reveals the existential threat facing Cuba St businesses. Tommy de Silva talks to Rachel House about directing her first feature. Spinoff writers rank and review the mini Easter eggs of New Zealand.

Sporting snippets

• NZ football fans will be able to watch the entire Euro 2024 tournament live on free-to-air or streaming, TVNZ has announced. The tournament kicks off in June.

• NZ Rugby has presented its plan for a historic governance shake-up to voting members. The changes come in response to an independent report that found NZR’s governance structures "are not fit for purpose in the modern era".

The Bulletin is looking for a sponsor

Expertly curated, The Bulletin delivers essential news and diverse perspectives from Aotearoa and beyond to business leaders, politicians, and decision-makers nationwide. Contact commercial@thespinoff.co.nz to learn more.

Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz.

If you liked what you read today, share The Bulletin with friends, family and colleagues.