No Income Tax Cuts Until Surplus in 2028/29, Willis Says
Finance Minister Nicola Willis says there will be no income tax cuts until the Government's books are back in surplus.
She said a return to surplus is the priority. Treasury forecasts a $4 billion surplus in 2028/29, earlier and bigger than previously forecast RNZ.
Willis said debt must fall before income tax brackets move. She said no new taxes are needed, and current taxes do not need to increase RNZ. National has pledged "no new taxes" and a return to surplus in 2028/29 RNZ.
That order is now set out in National's fiscal rules. The party has committed to three Budget Responsibility Rules, including lowering debt to below 40 percent of GDP — debt measured against the size of the economy National Party. Willis said the surplus would then keep growing, from $4 billion to almost $12 billion National Party.
Willis confirmed National will still campaign on an income tax policy, but no cut will come before surplus RNZ. She said she had set aside a plan to reach surplus a year earlier to prioritise cost-of-living relief RNZ.
The tax argument centres on bracket creep. The Government says inflation pushes low and middle-income workers into higher tax brackets, so they pay more tax Beehive. In her Budget 2024 speech, Willis said the median full-time wage earner makes $73,000 a year and sits in one of the highest brackets Beehive. She said brackets had not been adjusted for 14 years Beehive.
On superannuation, Treasury secretary Iain Rennie said New Zealand's financial position is "unsustainable" because of an ageing population and rising superannuation costs. Willis said National will have a superannuation policy for this election. The party proposed raising the retirement age at 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 timing and trust. Willis has made surplus in 2028/29 and falling debt preconditions for tax cuts. That limits what an election tax promise can offer and when it can start. It also links tax to superannuation, as both face the long-term pressures Rennie named. The questions to watch are timing, phasing and funding: whether any bracket changes are set for after surplus, how they fit the debt rule, and whether superannuation reform is put forward alongside tax or kept separate.
