Latest news with #ChlöeSwarbrick
Scoop
4 days ago
- Politics
- Scoop
Luxon Must End Climate Denial Speculation
The Greens welcome the open letter from world-leading climate scientists to the Prime Minister, urging his Government to abandon any plan to water down climate targets. 'Christopher Luxon must end any further speculation that his Government is on the climate denial bandwagon. After wasting a year playing around with the mythical 'no additional warming' idea, international alarm bells are ringing,' says Green Party co-leader and Climate Change spokesperson, Chlöe Swarbrick. 'The Climate Change Commission is clear that any entertainment of 'no additional warming' from agricultural gasses would mean households and businesses across the rest of the economy carrying a far higher burden. 'International experts are rightfully calling out this accounting trick. It's about fixing numbers on a page while the real world burns. 'While the Government doesn't tend to show any care for people and the planet, perhaps they would understand that pushing ahead with this agenda poses huge risks for our international exports, climate and trade agreements. 'The Greens have shown how we can reduce real-world emissions five times faster than the Government's 'plan,' while reducing the cost of living and improving our quality of life. 'New Zealanders deserve so much better than this Government's low ambitions for our country,' says Chlöe Swarbrick.
The Spinoff
27-05-2025
- Business
- The Spinoff
Is the KiwiSaver ‘fiscal hole' a glitch – or the whole point?
The government's $3bn saving on KiwiSaver changes may come straight out of workers' future pay – and it's no accident, writes Tayla Forward. In last week's budget, the government announced adjustments to KiwiSaver: government contributions are set to decrease, with KiwiSaver members compensated by increases to employer contributions. Savings to the Crown will total $3 billion over the forecast period, from the reduced expenditure on government contributions and the tax collected on increased employer contributions. Greens co-leader Chlöe Swarbrick emerged to challenge this, pointing out a potential $700 million uncosted 'fiscal hole'. The government is a major employer – healthcare workers, teachers, environmental workers and officials are all on its payroll. Wouldn't the increased employer contributions hit the government's books, too? Examining the budget documents carefully, the increased employer contribution appears to not be included among the government's expenses – but this is no oversight. Rather, they're not expecting to be the one paying. The employer contribution changes were, in fact, 'costed in' as lower future wages for public sector workers. In budget documents, the Treasury is explicit: 'We have assumed that employers will offset the majority (80%) of their higher contributions via lower-than-otherwise wage increases… Furthermore, reducing the provision for pay-equity settlements results in slower-than-otherwise wage growth… These lower wage increases have a negative impact on household spending.' That 'negative impact on household spending' translates to lower household incomes. What this means is that the increased employer contribution is assumed to be almost entirely absorbed by workers, implying the government achieves its savings directly at the expense of its employees' future earning potential. The same goes in the private sector. In other words, it appears the government, as a major employer, intends to manage its total wage bill – including increased KiwiSaver contributions – by decreasing the growth of take-home pay for public servants in the future. The costs borne by workers across both private and public sectors in the form of lower future wages may be greater than the purported savings won by the Crown. There was no explicit cost counted in Budget 2025 recognising the government's increased employer contributions, nor was the potential cost prominently listed as a 'new risk' in the budget documents. Instead, it was buried within the Public Sector Employment Agreements item, as an 'unchanged risk' under the comically titled category 'Forecasts Dependent on a Status Quo that is Uncertain'. The 'specific fiscal risk' that the policy change poses is the risk that the government is not able to sufficiently suppress public sector wages through upcoming pay negotiations to push the cost of the increased employer contribution onto workers. When Bill English considered cost-saving KiwiSaver changes in 2011, the fiscal costs to the government from employer contributions were explicitly set aside and centrally funded. After the 2011 changes, responsibility for funding the contributions was shifted onto agencies, with the expectation that they would absorb these costs within their existing baselines, realising efficiencies by cutting elsewhere. As Treasury notes, 80% of the cost of higher employer contributions are expected to be met by employees. What of the final 20%? The finance minister's answer was that any additional funding required – anything they're unable to shift through suppressing public sector wages, or through further cuts to public services – will be counted against the Budget 2026 allowance. If 'going for growth' depends on suppressed wages and scant public services, then 'growth' here can only refer to increased profits and economic rents. In the international literature, the impact of higher contributions on take-home wages is lesser in countries where collective agreements and other bargaining processes have a greater role in wage setting. In New Zealand, recent cuts to the real minimum wage, the contentious changes to pay equity initiatives, the repeal of Fair Pay Agreements and the extension of 'fire-at-will' provisions all contribute to an environment where the bargaining power of workers is systematically weakened. There is another cost buried in the estimates, too. The $3bn in savings includes higher revenue of $540m over the forecast period – $1.2bn more in Employer Superannuation Contribution Tax (ESCT) tax being collected, offset by a $693m reduction in the corporate income tax paid by private employers – owing to the 20% of the higher contributions expected to hit profits, rather than wages. What is absent from estimated savings are the tax implications of the suppressed wage growth. If the government is indeed relying on depressed wage growth to balance its books, this strategy will likely mean lower tax revenue in the future. Treasury notes in the Regulatory Impact Statement for the policy that the higher tax revenue from increasing the employer contribution rate does not include the impact on income tax revenue from slower wage growth over time. They say this means the fiscal benefit may be overstated. Treasury has said that 1% lower wage growth sustained over the forecast period could lead to an estimated $9.9bn less in tax revenue by 2029 – the tax losses that it doesn't account for could dwarf the tax gains that it does account for. Granted, we're not able to infer how much wage suppression the Treasury estimates is necessary for the fiscals to square. The eventual balance depends in part on public sector pay negotiations. In sum, the government faces two possibilities regarding the fiscal costs of its KiwiSaver policy. Either the impact is primarily on wage growth, leading to a potentially huge, but obscured, fiscal cost in the form of lower tax revenue due to depressed wages. Or, the impact is not entirely borne by wages, meaning a significant expense has been left uncosted and will inevitably strain future budgets or force further cuts. Either the government will aim to hold down the wages of people working in the public sector, bringing tax revenue down with it, or it is yet to account for a major cost.
Newsroom
26-05-2025
- Business
- Newsroom
The maths lesson the finance minister won't take from Chlöe Swarbrick
What is worse that the possibility of a fiscal hole? How about knowing where the money is going to come from and that reality being even more concerning. Following the release of Budget 2025 last week, the accusation of a fiscal hole was raised by Green Party co-leader Chlöe Swarbrick. She suggested there was a shortfall of $633 million to $714m over the forecast period relating to the Government's decision to increase the KiwiSaver employer contribution rate from 3 percent to 4 percent over time without accounting for the costs that this would place on Government departments.
Scoop
25-05-2025
- Business
- Scoop
Greens Find Over Half-A-Billion Dollar Hole In Govt Budget
The Green Party has found that the Government has not accounted for its own increased costs as an employer incurred by the KiwiSaver changes rushed through under Budget urgency last week. 'There's anywhere between $633 million to $714 million of costs to the Crown unaccounted for in the Government's Budget, as a result of its rushed changes to KiwiSaver contribution rates,' says Green Co-Leader and Finance spokesperson, Chlöe Swarbrick. 'The Finance Minister must have been aware of this, but despite incurring a legally required and quantifiable cost, she has failed to put aside funds to meet it. If the Prime Minister and Finance Minister knew about this better part of a billion dollar hole in their budget, they have deliberately decided not to be upfront and honest about it. New Zealanders are over it. 'If the Government doesn't front up with the funds between now and April next year when the first set of changes come into force, Christopher Luxon and Nicola Willis will be forcing immediate cuts directly to frontline services in health, education and social services to pay for their fiscal hole. 'Nicola Willis and Christopher Luxon have almost copy-pasted the John Key Government's 2011 KiwiSaver changes by halving Government contributions and increasing default contributions for employers and employees - but Bill English and John Key accounted for the increased employer contributions for our teachers, nurses and officials by establishing a special fund to pay for it. Willis and Luxon have chosen not to. Advertisement - scroll to continue reading 'The Minister will no doubt say these extra staffing costs must be met within departmental baselines. If she's honest with New Zealanders, that means the Government has intentionally hidden more than half a billion dollars extra in public service cuts to come. 'New Zealanders deserve so much more than this Government patronising about 'growth' while cutting the very investment and public services necessary not only for people's wellbeing, but for that very growth. New Zealanders deserve honesty and transparency about who's paying the cost of this Government's cruel decisions. 'It is possible to reduce the cost of living, increase our quality of life and rapidly reduce climate changing emissions. We produced our costed and transparent Green Budget to show how, and it's clear, after the Prime Minister spent half his Budget speech talking about us, our plan scares those profiting from the economic misery they've created,' says Chlöe Swarbrick. Note:
Scoop
22-05-2025
- Politics
- Scoop
Government Pours Gas On The Climate Crisis Fire
Budget 2025 has put our climate targets in serious jeopardy, says the Green Party. 'Today the Government has done even worse than deny or delay climate action - they've actively chosen to pour gas on the fire,' says Green Party Co-Leader and spokesperson for Climate, Chlöe Swarbrick. 'The Government is setting $200 million of our public money on fire to support fossil fuel executives' profit, handing a lifeline to a sunset industry, instead of investing in real, resilient, renewable energy. 'They have the gall to call themselves 'responsible economic managers' while leaving us vulnerable to paying out billions in climate liabilities for failing to meet the Paris Agreement, which they also consistently act to push further out of reach. 'Our communities are confronted with 'one in one hundred year' climate change charged weather events year on year. The climate crisis is here. The measure of how much worse things get is the Government's willingness to act. 'Christopher Luxon knows all of this and has said, 'yeah, nah' to a liveable future for all. New Zealanders need to know that this is not inevitable. 'The Greens have shown how we can reduce climate-changing emissions five times faster than the Government's plan, while reducing the cost of living, and improving the quality of life. 'Time and again, this Government shows us whose side they're on, and it's not that of regular people, future generations or the planet we all share,' says Chlöe Swarbrick.
