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Budget 2015 in 60 seconds

A quick-fire summary.
 
Rob Hosking discusses the big announcements in Budget 2015 with Nick Grant on NBR Radio and on demand on MyNBR Radio.

Thu, 21 May 2015

With most measures pre-announced, the only major surprises in Budget 2015 were the size of the child poverty package and the elimination of the $1000 Kiwi-saver kick-starter payment.

The key elements:

  • A deficit of $684 million forecast for 2014/15, moving to a surplus of $176 million in 2015/16 and growing to $3.6 billion in 2018/19.
     
  • A $790 million child poverty package that includes $25 a week to benefit rates for families with children (from April next year), the first increase beyond adjustment for inflation in 42 years, plus Working for Families tax rebates for households earning up to $88,000 a year. Work testing for sole parents to start when youngest child is three, down from five. Work testing obligation increases from 15 to 20 hours a week.
     
  • Operating allowance of $1 billion a year for the next two years and then $2.5 billion in 2017, which will include “modest” tax cuts if fiscal and economic conditions permit (including projected GDP growth of 2.8% a year and projected average wage growth from $56,000 to $63,000 by 2019).
  • $1000 kickstart for KiwiSaver eliminated, effective immediately. The government says the move will save $500 million.
  • ACC levy cuts of $500 million over two years.
     
  • New airport tax of $16 for inbound passengers and $6 for outbound; aims to raise $100 million, which is earmarked to boost border security.
  • All non-residents and New Zealanders buying and selling any property other than their main home must provide a New Zealand IRD number, an NZ bank account number and their tax identification number from their home country, along with current identification requirements such as a passport.
     
  • A new “bright line” test will be introduced for non-residents and New Zealanders buying residential property. Under this new test, gains from residential property purchased on or after October 1 and sold within two years will be taxed unless the property is the seller’s main home, inherited from a deceased estate or sold as part of a relationship property settlement.
     
  • $52 million capital contingency fund for housing development on Crown-owned land in Auckland.
  • A further $107.8 million in operational funding for Canterbury’s earthquake recovery (takes the government’s total contribution to the Canterbury rebuild to $16.5 billion).
  • $400 million from the Future Investment Fund for KiwiRail ($210 million in 2015/16 and a further $190 million as a pre-commitment against Budget 2016)
     
  • $360 million more for faster broadband, on top of the $2.1 billion already allocated to the UFB, RBI and N4L.
     
  • $1.7 billion more for health over four years.
     
  • $443 million more for education over four years including $63 million for special needs kids
     
  • $113 million more for tertiary education.
     
  • $164 million more for Police.
     
  • $40 million for other Justice and Courts initiatives, including the Investing in Justice programme, the Harmful Digital Communications Bill and helping build the Christchurch Justice and Emergency Services Precinct.
     
  • $50 million more for Whanau Ora.
     
  • $264 million more for NZ Defence Force.
     
  • $97 million for regional highways and $40 million for urban cycleways.
     
  • $20 million more each for SIS and GCSB.
     
  • Up to $25 million over three years to support the establishment of new privately led Regional Research Institutes.
     
  • An $80 million operating boost over four years to R&D growth grants administered by Callaghan Innovation.

 

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Budget 2015 in 60 seconds
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