Pitched as tax relief for the 'squeezed middle' — low- and middle-income workers whose pay had crept into higher tax brackets over 14 years while the thresholds stood still.

The Policy: National Back Pocket Boost — 2023 Election →

What it does:

• How it works: Budget 2024 lifted three of the lower personal income tax thresholds from 31 July 2024 — the first change since 2010. The 10.5% band now runs to $15,600 (was $14,000), 17.5% to $53,500 (was $48,000) and 30% to $78,100 (was $70,000); the 33% and 39% top brackets were left unchanged (IRD / Work and Income).
• How much: the Government estimated savings of about $4–$40 a fortnight depending on income — up to roughly $20 a week for an average full-time earner, and as much as ~$102 a fortnight for an average-income household once FamilyBoost and In-Work Tax Credit changes are counted.
• Who it is for: around 3.5 million people — roughly 90% of households (anyone earning over $14,000). The wider tax package was costed at about $3.7 billion a year (Deloitte).
• The catch: because the thresholds had been frozen since 2010, the rise only partly recovers 14 years of 'fiscal drag' (bracket creep), so the real-terms gain is smaller than the headline.

The result:

National delivered the cuts on schedule and they reached almost every earner — a clearly kept promise. But the relief is modest per person, and the brackets still are not indexed to inflation: tax advisers at Deloitte and economists at Infometrics noted the change does not fully offset inflation since 2010, and that — unlike 17 other OECD countries — New Zealand does not automatically adjust its tax brackets, so without an ongoing commitment fiscal drag will quietly erode the gain again (The Conversation). Verdict: kept and broadly spread, but real-but-small and likely to shrink over time.