Voters, including Wellingtonians and Labour and Green supporters, back spending cuts to fund tax plan

Prime Minister Chrstopher Luxon (left) and Finance Minister Nicola Willis. Photo / Mark Mitchell

Voters want big-ticket items in the new Budget to be paid for by spending cuts – not more taxation or borrowing, a new poll has found.

The most recent Taxpayers’ Union-Curia poll asked if the Government were to announce “new spending or tax relief in this month’s Budget” whether voters thought those proposals” should be paid for by increasing other taxes, reducing spending elsewhere, or increasing government debt”.

A strong majority, 58 per cent, of those polled said they wanted those ideas funded by spending cuts, followed by 14 per cent who wanted increased taxes, and 7 per cent who wanted increased debt.

The result was reflected across the country, including in public servant-dominated Wellington where 54 per cent wanted spending cuts to pay for new initiatives compared to 17 per cent who wanted more taxation and 12 per cent who wanted increased debt.

The Wellington sample had a smaller sample size. Forty-nine per cent of Aucklanders and 47 per cent of people from Christchurch want spending cuts.

The Government says that tax relief of some kind will be included in the Budget. Finance Minister Nicola Willis says it will be “fiscally neutral”, funded by new revenue tools and spending cuts.

National campaigned on lifting visa fees to raise revenue, and Willis said the Government has managed to find $1.5 billion in savings which will help to fund the spending plan.

“Treasury modelling indicates that fiscally neutral tax relief - financed through reduced government consumption – reduces inflationary pressure and nominal interest rates. This is mainly because there is generally a lower multiplier on tax relief than for general government consumption. This means our decision to fund tax relief in the Budget will not add to inflation,” Willis said in her first pre-Budget speech.

Referring to a poll from April showing 53 per cent of voters still wanted a tax cut, despite negative economic commentary about their fiscal and inflationary effects, Taxpayers’ Union head of campaigns Callum Purves said “while we know from previous polls that voters still want Nicola Willis to deliver on income tax relief, they are also sending a clear message that it needs to be done in a responsible way by reducing spending rather than borrowing more or increasing other taxes”.

“New Zealanders are sick to the back teeth of the tax, spend, and borrow approach of the previous Government. The Finance Minister needs to ensure that any announcements of tax relief or new projects she makes later this month are fully funded. Any more borrowing today simply means higher taxes tomorrow,” he said.

Support was fairly even across age demographics and gender.

Spending reductions were supported by a plurality of all party supporters, although the poll is predicated on how the Government should fund its tax and spend policy - not whether that policy should exist in the first place.

A full 72 per cent of people who said they would vote for National or NZ First want spending cuts, as do 73 per cent of Act voters, and 68 per cent of Te Pāti Māori voters.

Forty-four per cent of Labour and 40 per cent of Green voters want spending cuts to pay for the tax plan.

Tax increases were least popular among Te Pāti Māori supporters with just 4 per cent wanting taxes to be hiked to pay for the tax plan.

The poll was taken between May 5-7 and polled 1000 adult New Zealanders weighted to the overall adult population.

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.