WELLINGTON, May 30 (AFP): New Zealand's fledgling centre-right government unveiled a tax-cutting budget for "everyday people" Thursday despite a recession and tough economic outlook.
To pay for it, the ruling coalition of Prime Minister Christopher Luxon said it would tighten spending.
Once dubbed a "rock-star economy" for its ability to weather financial crises, the agriculture-dependant economy tipped into recession at the end of 2023.
New Zealand has been battered by natural disasters, while global supply chain issues have hurt the isolated island nation more than most.
"This is a budget for everyday people getting on with their lives," said finance minister Nicola Willis.
"This is a budget for the squeezed middle of New Zealand-the shift workers, the people working two jobs, the families making sacrifices for their kids," she said.
The finance minister acknowledged the country's "very difficult downturn" and the pain of higher interest rates introduced as a result of a cost of living crisis. "That hurts," she said.
Willis outlined tax cuts of NZ$3.68 billion (US$2.2 billion) in the next fiscal year to March 31, 2025.
They would be paid for with savings and revenue-raising measures, including cuts to government departments, axing policies of the previous Labour government, and raking in money from an emissions trading scheme.
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