Some may say dull as ditch water, but that would be unfair. The Budget delivers a steady as she goes approach in the lead up to the
2017 election and health is a major focus. Including bold incremental tax
increases for cigarettes that will see the average packet cost $30 by 2020.
If carbon emissions are a byproduct of your business then the
announcement to phase out Emissions Trading Scheme subsidies is going to bite.
Nonetheless, New Zealanders are definitely winning
overall and with the focus on core services the benefits are well spread:
·The Crown’s books show rising surpluses and
·Big dollops of cash for tourism
infrastructure, social housing, social investment initiatives, many already
announced, education and health, roading projects, KiwiRail, funding to free
up more land for housing in Auckland
·Establishment of a Fresh Water improvement
fund to remediate rivers
·Money to tackle TB in livestock
·National Policy Statement on Urban
Development to be released
·Two-year trial to streamline border
processing for low-risk travellers to make it easier for them to visit New
There will be some excitement around the Innovative NZ
package: The $761 million Innovative New Zealand package is designed to
encourage entrepreneurship, skills and economic growth. The package has three parts:
1. Investment in science and innovation will
increase by $411 million over the next four years. A number of different science and research funding
streams have been boosted, including those that have a strong potential impact
on New Zealand’s economy, environment and society. The Marsden Fund – which supports excellence in research
– will be expanded, as will funding for the Health Research Council.
2. Support skills and employment – investing
$257 million in more tertiary education and apprenticeship programmes,
particularly in the areas of science, engineering and agriculture. Tuition subsidies will be increased in a number of
subject areas and the Government will fund 5,500 more apprentices by 2020. Funding will be provided to help second-chance learners
gain basic skills and to strengthen workplace literacy and numeracy programmes.
3. Support regional economic development – introducing a series of initiatives worth $94 million that will unlock
business opportunities and benefit regional communities.
Health – the big winner
Over the next four years, $2.2 billion of
additional funding will be provided for new health initiatives and to meet
Pharmac will receive an additional $124
million over four years to provide more New Zealanders with access to new
medicines, including new treatments in a range of areas, including for melanoma
and hepatitis C.
The Budget also provides $39 million for a
national bowel screening programme which, when fully implemented, is expected
to screen over 700,000 people every two years.
A further $96 million over four years will
increase the number of elective operations.
Budget 2016 provides $169 million more for
disability support services and a further $73 million for primary healthcare.
This includes extra support for the free doctors’ visits and prescriptions for
under 13s that we announced in Budget 2014.
District Health Boards will receive $1.6
billion over four years to invest in services, meet population growth and
deliver better results.
and delivering a modern, flexible tax system
Further support for businesses – particularly
small enterprises – comes through a $187 million SME-friendly tax package,
which the Prime Minister announced last month.
Further changes targeted at multi-national
companies – New Zealand recently signed an international agreement that will
make it harder for multi-nationals to artificially lower their tax liabilities.
Government will soon introduce legislation to
increase the amount of tax compliance information shared between treaty
Have commissioned an independent review of
the disclosure requirements for foreign trusts, which is due by 30 June.
The environment and who pays
The Government will phase out a subsidy in
the Emissions Trading Scheme that was introduced as a temporary measure during
the global financial crisis and has allowed some businesses to pay one
emissions unit for every two tonnes of pollution they emit.
Government says it’s time businesses move
towards paying the market price for their emissions and says removing the
subsidy will positively impact the operating balance by $356 million over the
next four years, based on a New Zealand Unit price of $12.
The Budget also establishes a $100 million
fund to help clean up New Zealand’s rivers, lakes and aquifers over the next
decade. The Freshwater Improvement Fund will contribute to projects that help
communities improve water quality. Priority will be given to projects involving
the private sector or philanthropic funds.
Political commentator Vernon Small commented it should be
called the Forrest Gump Budget. It's like a box of chocolates - with a
range of sweet choices but no nasty surprises. We agree.