Latest news with #fiscalPolicy
The Guardian
a day ago
- Business
- The Guardian
Rachel Reeves looks to spending review to shift focus from welfare cuts
Rachel Reeves's spring statement in March ended up being defined by deep cuts to disability benefits. The Treasury hopes next week's spending review will be remembered for the chancellor's largesse. Her team have consistently been frustrated that despite announcing tax increases worth £40bn a year by the end of the parliament, and radically rewriting the fiscal rules, Reeves has failed to win much political credit for unlocking additional investment. The Treasury argues that its plans amount to more than £100bn in additional capital investment over the next five years, compared with what her predecessor Jeremy Hunt expected to spend. Reeves believes under-investment is a long-term bugbear of the UK economy. She made space for this additional infrastructure spending by changing the fiscal rules to allow her to borrow to invest – and shifting the definition of government debt, to take into account financial assets owned by the taxpayer. The chancellor will be in Manchester on Wednesday to announce a slate of transport investments outside London, as part of this uplift in investment, with more to come next week. She has been inviting groups of Labour MPs into No 11 this week to tell them the good news about high-profile projects in their constituencies – though some fret that they are unlikely to materialise rapidly enough to bring much electoral benefit. After fraught cabinet negotiations, the spending review will parcel out among Whitehall departments the spending for the next three years which was announced at the spring statement – the 'envelope', as the Treasury calls it. Alongside infrastructure projects, the chancellor is expected to prioritise health, defence and economic growth, with the latter including the government's long-awaited industrial strategy. Reeves and her cabinet colleagues will be keen to point to the potential benefits of this additional spending, not least a less dysfunctional NHS. Outside these key areas, some departmental settlements are expected to be painfully tight, particularly towards the later end of the three-year period the spending review covers: a point that will inevitably be made by thinktanks such as the Institute for Fiscal Studies. Reeves's enforcer, Darren Jones – the chief secretary to the Treasury – insists departments should be looking for ways to make resources go further over time, through innovation and cracking down on waste. And the chancellor is expected to offer a robust defence of her fiscal rules, which despite mounting disquiet inside her own party, her team contend are necessary to maintain the stability of the public finances. Under the rules, day-to-day spending must be covered by taxation. Reeves's allies believe this tough constraint is necessary, to maintain the market confidence the Treasury needs, to ratchet up borrowing to fund investment. But critics argue that it distorts decision-making, forcing the government into choices like the £5bn in welfare cuts made in the spring statement, in order to ensure the rules were on course to be met. Another controversial choice Reeves made to balance the books, the means-testing of the winter fuel allowance, is also likely to come under intense scrutiny , with the chancellor unable to say as yet how the partial U-turn on the policy will be funded (or indeed exactly who will receive the payment this winter). She is also likely to be challenged about whether she will find the resources for other Labour priorities, including tackling child poverty – a full strategy on which is now not expected until the autumn. After the bruising reversal of the winter fuel allowance decision, with which she was so closely associated, Reeves will be hoping next week will be more about spending than cuts. But it is also likely to underline, yet again, the difficulties of achieving some of Labour's central aims within the fiscal constraints the Treasury has set.
RNZ News
27-05-2025
- Business
- RNZ News
Labour's finance spokesperson gives few details about party's fiscal policy targets
Barbara Edmonds made a post-Budget speech at a Porirua Chamber of Commerce event. File picture. Photo: RNZ / REECE BAKER Labour's finance spokesperson Barbara Edmonds says she still has not read the Greens' alternative Budget, while defending a scarcity of fiscal policies of her own. Edmonds made the comments after a post-Budget speech to an audience of about 20 people at a Porirua Chamber of Commerce event on Tuesday morning, where she savaged the coalition's plan as a "direct assault" on New Zealand values. During a question-and-answer session at the Supply Room restaurant in Paremata, Edmonds was asked for her views on the Greens' fiscal plan - unveiled a fortnight ago - which included significant new taxes and spending. "No disrespect to my friends in the Greens, but I didn't read their Budget," Edmonds said. "At least they had a plan. I just didn't read their plan." Speaking to reporters afterwards, Edmonds said she would "maybe" get round to reading it after finishing going through the more than 2000 pages of the government's Budget. "I will get to it when I get to it," she said. "I'm one person. My focus has been this government's Budget." Asked for her high-level view on the Greens' proposals based on media coverage, Edmonds observed there was a lot of tax and social spending. "Whether it's balanced or not?... maybe ask me that question after I've read it." Labour leader Chris Hipkins made similar remarks immediately after the Greens released their plan, but later described it as a "huge spend-up" and "unrealistic". Edmonds' speech on Tuesday gave a scathing appraisal of the coalition's Budget: "Make no mistake about it, this will be remembered as the Budget that cut women's pay . "Cutting women's pay to make the Budget add up was a deliberate decision by Nicola Willis... when you take money that has been set aside for future pay rises and put it into something else that is a cut. Plain and simple." She said the Budget was a "direct assault" on New Zealand values: "We're the first country in the world to give women the right to vote. Fighting for equality is in our national DNA. Turning our backs on equal pay is not who we are as Kiwis." Though Edmonds opened her speech by saying she would preview the different choices Labour would have made in the Budget, she gave little detail beyond high-level promises to invest in jobs, health, and homes. "That's how we will build a better future." Quizzed by reporters on a variety of policy proposals, Edmonds repeatedly deferred to the party's yet-to-be-released fiscal plan. She declined to clearly state Labour's position on its preferred debt cap or surplus target, nor whether it would maintain the coalition's Investment Boost tax incentive. Edmonds said she was comfortable with the amount of policy Labour had released thus far and said it would all be "carefully considered". "We will have policy announcements, as Chippy has said, towards the end of the year... but actually, we have this Budget to work through... we've got next Budget to work through... and then we will come out with our fiscal plan. "I know you're eager, and I know you want to find the new hook, but today I was talking about the government's Budget, so you'll just have to wait." When in opposition, the National Party also came under pressure over a lack of policy detail less than a year out from the 2023 election. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Bloomberg
25-05-2025
- Business
- Bloomberg
Treasury Traders Enter Abridged Week With Inflation Top of Mind
Weary bond investors enter a holiday-shortened week facing fresh US inflation readings at a time when consumers are already anticipating steeper prices pressures given President Donald Trump's tariff plans. Long-term Treasury yields catapulted higher last week after the House pushed through President Trump's signature legislative package, which features a bevy of new tax breaks and added to worries around the nation's fiscal outlook. Then on Friday yields slipped anew as tariff tensions heated up again after the president threatened a 50% tariff on goods from the European Union starting on June 1.
Argaam
25-05-2025
- Business
- Argaam
Saudi Arabia adopts reforms to counter external shocks: Assistant Finance Minister
Assistant Minister of Finance Abdulmohsen Alkhalaf said Saudi Arabia has adopted several structural reforms and developed a strong financial framework to counter external shocks without compromising development plans or the sustainability of public finances. Addressing a panel discussion held by the International Monetary Fund (IMF) today, May 25, Alkhalaf underscored the importance of adopting structural reforms by GCC countries to improve economic flexibility and support a recovery, according to a statement picked up by Argaam. He added that the Kingdom has a long-term vision to bolster economic transformation. Accordingly, such reforms helped foster a more flexible Saudi economy and provided a comprehensive range of policy options to deal with possible shocks. Further, given the tightening of global financial conditions, increasing economic fragmentation, and continued fluctuations in commodity prices, fiscal policy was mainly used to shape the economic response globally and regionally, according to Alkhalaf. These circumstances require governments to have a mix of fiscal prudence, rapid response, strategic sector investments, and private sector support, the official continued.
Yahoo
25-05-2025
- Business
- Yahoo
Need for More Fiscal Austerity: Axonic's Cecchini
Axonic Capital Principal and Head of Research Peter Cecchini says tariffs and fiscal setup add a risk of uncertainty in credit and fiscal austerity is required. He speaks with Vonnie Quinn on "Real Yield." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
