Grant Robertson says Budget 2022 will focus on health system reset, rules out tax cuts

Finance Minister Grant Robertson says the upcoming Budget will focus on resetting the healthcare system and funding core public services, not tax cuts. 

The Government will reveal its 2022 Budget on May 19. It comes amid a cost of living crisis and an inflation rate of 6.9 percent in the March quarter - the largest year-on-year increase in nearly 32 years. Russia's invasion of Ukraine is also causing financial pressure with supply chain issues pushing petrol prices up. 

While the Government has introduced several measures to help struggling Kiwis including slashing the fuel taxes and halving public transport prices, it is facing increasing scrutiny from the Opposition. 

National leader Christopher Luxon has promised tax cuts if he's elected and blamed the Government's spending for inflation. Several other countries including the US and the UK are also experiencing high inflation rates after the pandemic. 

Speaking with AM on Tuesday, Robertson said he understands times are tough but ruled out tax cuts in this Budget. 

Robertson pointed to increases in benefits and family tax credits which came into place at the start of the month. The benefit boost came from the Government's Budget in 2021 and was not made in response to the current cost of living crisis. 

"I recognise particularly for those on low and middle incomes this is a really challenging and difficult time. We are seeing price increases across the board, this is something that is happening around the world and it's the reason why we've significantly increased the support we're giving to lower-income New Zealanders," he told AM. 

When asked by AM co-host Ryan Bridge what low to middle-income Kiwis could expect out of the Budget, Robertson said it will focus on delivering key public services. 

"The Budget that we are going to put forward will deliver to New Zealanders the services that they need. 

"They need strong health services, they need good schools, they want to see good transport networks… All of those things are important. We've also got to be planning for the future so we are not so reliant on the things where we are seeing inflation - be that the use of oil or making sure we have better prices at the supermarkets. 

"We always support people but we do have a lot of responsibilities and a lot of calls on the Government's funding."

Robertson said the Budget will strike a balance between targeted support and investment for health and education. 

"A core focus of this budget will be resetting our health system, making sure that New Zealanders actually get good quality healthcare wherever they live, whoever they are. 

"Making sure that we've got a focus on those long term issues that will help New Zealand's economy grow, getting on top of climate change and making sure we do the basics right. We are very well aware of the pressure on households."

The Finance Minister also hit back at National, saying tax cuts will benefit those already on high incomes the most. 

"I don't think this is a Budget where tax cuts are the right thing to do and neither did the IMF (International Monetary Fund) when they were out here. 

"The kind of things the National Party is proposing with people earning over $180,000 getting the greatest benefit from that just simply isn't the right thing to do at the moment."

National has promised tax cuts should it be elected however they've faced criticism over how much it would actually help low-income families. Under the tax cuts someone earning a typical salary of $55,000 would save about $800 a year but someone earning $45,000 would only get about $112. Luxon would get an $18,000 tax cut under the package. 

The Government is also facing scrutiny from economist Cameron Bagrie, who told AM Robertson needs to rein in spending to get inflation under control. 

"It's pretty easy to spend money when the economy needs it in response to the likes of COVID but the real test for any Finance Minister I think is whether they can reign things in on the other side and make the real tough choices when we need it," he said on Tuesday.