Episode Details

The Budget is out, and the Government’s done what it can with the pickle we’re in. 

Put simply, we don’t collect enough tax to pay for the services we run and the people we employ. 

There are only two fixes: either collect more tax — the left’s answer, though the last left Government didn’t have the guts to raise taxes, even while increasing spending. Or cut services and staff — which is this Government’s preference. 

But cuts hit confidence. When the private sector loses heart, tax revenue drops even further. And remember: Government is only 40% of the economy. Our real future depends on the private sector — the 60% where most taxpayers actually live. 

So they’re walking a tightrope. And honestly, this Budget is probably as balanced as they could make it. 

Some argue we should slash everything until the books balance. But the last two years of “austerity-lite” showed that deep cuts push the private sector into an even deeper funk. 

The good news? Treasury is forecasting $10.8 billion more in tax revenue over the next five years — without raising taxes. Spending is still rising, but because it’s not keeping pace with inflation, it’s effectively a real-terms cut. 

So bit by bit, we’re inching toward a healthier position. The only other option is raising taxes — and even Chris Hipkins couldn’t vote for that last election. 

See omnystudio.com/listener for privacy information.