The Prime Minister has emphatically ruled out the suggestion new taxes will be introduced in the Government's upcoming budget and reiterated his desire to provide tax relief in the way his party promised during the election campaign.
Christopher Luxon firmly told The Mike Hosking Breakfast there would be no new taxes in the budget, and that the tax relief "is going to happen, period".
His comments provided clarification following a press conference on Monday, when Luxon confirmed working New Zealanders and middle-income earners would be in line for a tax cut at the Budget, but would not say whether the cuts would be of the same quantum National promised at the election, meaning they could be smaller.
In what the Herald described as "a slightly chaotic post-Cabinet press conference", Luxon would not confirm the cuts would be of the size promised in the coalition agreement and then did not rule out using new taxes to pay for the tax plan, including new taxes on working people.
This was brought up with Luxon during his interview with Mike Hosking this morning, with the Prime Minister being asked if he was digging himself a hole with his tax position.
Hosking then asked Luxon, point-blank, if he would be introducing new taxes.
"No, there won't be new taxes in the budget," Luxon said.
"We're determined to deliver lower-middle-income workers in New Zealand tax relief, as we talked about in the campaign, that is going to happen. That is funded in the sense that we've had revenue being raised, we've had savings being generated and reprioritisation ... but the tax relief is going to happen, period."
Luxon then said between now and the end of May, when the budget would be announced, there would need to be a process of Cabinet signing everything off.
Hosking clarified what Luxon had said, asking if there would be tax cuts delivered and effective from July 2024.
"Yep, I'd love it for it to be effective from July, we've got to go through a Cabinet decision-making process to lock everything up and make sure we can do that all and get it all sorted."
Hosking continued to push further during his interview with the Prime Minister this morning, to determine whether the tax relief would be effective from July or later in the year. Luxon remained firm on the fact that Cabinet process needed to be followed.
Luxon said he intended to establish the tax cuts in July but there were moving pieces in play that needed to be addressed before anything was confirmed.
"I'm saying to you, [what we said during our campaign is] what we're going to deliver," he said.
"Mike, I'm going to confirm all of those great details to you in the Budget - and the Budget is coming at the end of May, it's a big process and I want to confirm all that great detail to you when we announce it."
As reported by the Herald, National’s coalition agreement with the Act Party commits the Government to delivering tax cuts of some kind, “subject to no earner being worse off than they would be under National’s plan”.
However, the deal also allows the parties to wriggle out of any commitments they can no longer afford. Act has already agreed to back down from some elements of the reinstatement of interest deductibility, a decision blamed on the deteriorating economic situation.
When asked on Monday to guarantee Kiwis would get the same amount of tax relief promised prior to the election and endorsed in the coalition agreement, Luxon would only say that this would be answered in the Budget at the end of May.
“We are deeply committed to delivering tax relief to low- and middle-income working New Zealanders,” Luxon said.
Take your Radio, Podcasts and Music with you