A preferential option for the rich is not the answer to hard times – Caritas

31/05/2024

Caritas recognises that Aotearoa New Zealand is in a difficult financial situation and appreciates the Government’s stated aim to improve conditions for Kiwi families and reduce the economic strain on future generations. It is heartening to see investments in essential areas such as Pharmac, and efforts to alleviate the cost-of-living crisis for New Zealanders.

However, we are deeply concerned at the way tax relief is being distributed. The announced bracket changes will deliver greater savings to higher-income earners and the wealthiest in society; while delivering the least to vulnerable groups such as those on the pension or earning minimum-wage. Tax cuts are funded by reduced spending on government services, or debt paid by future generations, so it is vital that every dollar of tax relief is distributed justly to those most in need. Rather than offering a preferential option for the poor and vulnerable, as stipulated in Catholic social teaching, this budget prioritises those least in need.

Additionally, Caritas regrets this budget’s approach to climate change. Aotearoa New Zealand has moral, legal and financial imperatives to reduce our emissions and adapt to climate change. We support the $200 million set aside for flood resilience in the Regional Infrastructure Fund; it is concerning though that Emissions Trading Scheme revenue set aside to decarbonise industry is instead being diverted to fund tax cuts. Even if we accepted that the NZ ETS could meet emissions reduction targets on its own, we do not believe the cost of meeting these cuts should ultimately be passed onto consumers, which will ultimately happen without targeted Government spending to support decarbonisation.

Finally, Caritas is concerned that the budget includes very little specifically addressing Māori needs. Even if tax relief could provide an equitable benefit across society, there is a wealth of evidence that Māori face qualitatively different problems in areas such as health and education due to structural and historic inequities. In order to uphold Te Tiriti o Waitangi and Catholic social teaching, the Government must ensure the money it has allocated will be spent in ways that benefit all New Zealanders, especially Māori communities who have historically been let down by previous governments.

Caritas believes this budget is well-intentioned but short-sighted and gives tax relief to the most well-off at the expense of those most in need.

ENDS