Willis rules out income tax cuts before surplus
Finance Minister Nicola Willis says there will be no income tax cuts until the government's books are back in surplus.
Willis said getting the books back to surplus is the priority before considering cutting income tax. The books she presented forecast a return to surplus only in the 2028/29 fiscal year, with Treasury forecasting a $4 billion surplus by 2028-29, an earlier and bigger surplus than previously forecast RNZ.
Debt comes first. Willis said debt must be reduced before income tax brackets are moved. She said no new taxes were needed, nor any increase to existing taxes RNZ. National has pledged to introduce "no new taxes" and return the books to surplus in 2028/29 RNZ.
That fiscal sequence is now formalised in National's fiscal rules. The party has committed to three Budget Responsibility Rules, including bringing debt below 40 percent of GDP National Party. Willis also confirmed the surplus track beyond the return to black, with the surplus forecast to grow from $4 billion to almost $12 billion National Party.
Willis has still confirmed National will campaign on an income tax policy in the election campaign, while ruling out an income tax cut before surplus RNZ. She has set aside a plan to reach surplus a year earlier to prioritise cost-of-living relief RNZ.
The tax debate turns on bracket creep. The Government has said inflation is pushing low and medium-income workers into higher tax brackets, meaning they are paying more tax Beehive. In her Budget 2024 speech, Willis said the median full-time wage and salary earner earns $73,000 a year and is in one of the highest tax brackets Beehive. She has also said workers had endured 14 years without any adjustment to income tax brackets Beehive.
Superannuation is back in frame alongside tax. Treasury secretary Iain Rennie said New Zealand's financial position is "unsustainable" because of the ageing population and ballooning superannuation costs. Willis said National will have a superannuation policy for this election. National proposed increasing the retirement age in the last two elections.
MPs also marked the death of former Speaker Adrian Rurawhe, as confirmed in a statement from his family.
The broader context here is sequencing and credibility. Willis is locking in surplus in 2028/29 and a falling debt ratio as preconditions, which narrows what an election income tax policy can promise and when it can start. It also ties the tax commitment to the superannuation commitment, since both run directly into the long-term fiscal pressures Rennie identified. For political operators, the questions to watch are timing, phasing and funding: whether any bracket adjustments are specified for post-surplus years, how they sit under the debt rule, and whether superannuation reform is presented as a parallel fiscal lever or left as a standalone pledge.
