Yesterday the New Zealand Government made the 2016 Budget announcement.  Many have commented that this was a very safe budget with not much to discuss.  On the whole more funds are being put into core services such as health and education which is of benefit to all New Zealanders. 

On the tax front there was very little to say.  The pay-as-you-go option for small businesses which we mentioned in our earlier blog was confirmed along with the reduction in use of money interest and penalty charges. However, no tax cuts were announced this year and there was also no mention of introducing a land tax.   

The big winners were:                                                                           

  • Healthcare with an extra $2.2 billion being spent, including $1.6 billion for district health boards over 4 years.
  • Education with $1.44 billion more spending, including $882.5 million for classrooms and nine new schools.
  •  $652 million social investment package targeted at disadvantaged children with the aim to help the most vulnerable through early intervention and to help youth who are at risk of long term welfare dependency.
  • $2.58 million to provide at least 750 more social housing places in Auckland and $100 million to free up more Crown land in Auckland for housing. 
  • $20.7 million allocated to help fund the largest pest control operation in New Zealand's history to help save our native birds including the flightless Kiwi. 

The big losers:

  • Smokers with a 10% per year increase in tax on tobacco for the next four years. 
  • Criminals with an additional $837 million spending on the justice sector over the next four years.