Tuesday, July 23, 2024

PM rules out Budget cyclone levy

Prime Minister, Chris Hipkins, has today ruled out a specific cyclone levy in the upcoming Budget to pay for the recovery from the Auckland floods and Cyclone Gabrielle.

In a pre-Budget speech in Auckland, the Prime Minister said the recovery costs will instead be largely met within the Budget’s operating and capital allowances.

“There will be no new tax everyone would have had to pay, like a cyclone levy, to fund the recovery,” Mr Hipkins said.

“This will be an orthodox no-frills Budget focused on funding the things most important to New Zealanders like support with the cost of living and cyclone recovery. There will also not be any major new tax changes like a wealth tax or CGT.

“The Government has taken the decision to fund the recovery from here on through a combination of the annual operating and capital allowances we set each year for the Budget, savings and reprioritisations, and some debt as we invest in infrastructure repairs and build back stronger.”

Treasury has put the cost of asset damage from the Auckland floods and Cyclone Gabrielle at between $9 billion and $14.5 billion. This is more than the Kaikōura earthquake but significantly less than the Canterbury quakes, the Prime Minister said.

“As a result, we’re confident we can fund the recovery within the allowances without a one-off cyclone levy.”

“Half of the total estimated costs relate to ‘public infrastructure’ – assets owned by central and local government such as roads. The bill for these assets is usually spread over a longer period, so it is appropriate to do so for this.

“A key message of this Budget is restraint. In a cost-of-living crisis, now is not the time to be asking Kiwis to pay more though a levy for cyclone repair costs,” Mr Hipkins said.

The Prime Minister also set out three areas of investment in the Budget which will lay the foundation for future growth and improved productivity – skills, science and technology and infrastructure.

“There’s no point getting through the challenges of today if we don’t have a plan for the future,” PM Hipkins said.

“Rather than a long laundry list of worthy ideas, I want the Government to do a small number of things very well. And those small number of things need to be focused on growing our economy.

“My priorities are investment in skills, science and infrastructure to help grow our economy and make it more productive and secure. These three areas will all receive extra support in the Budget.

“They are areas I have a personal interest in and reflect where I think there are real opportunities to lift our economic performance.

“The Government has a clear plan for the future to grow our economy, invest in our people, and ensure everyone can reach their potential,” he said.

Latest Articles