10.56am 25 May 2017 – Pre Budget Announcements (see below for actual budget notes)
So we’re counting down the moments to the 2017 budget for our country to see which direction the National Government wants to take us in. It’s fair to say that this government has been relatively kind to small and medium sized businesses in New Zealand. There have been moves to simplify compliance for small business and some additional initiatives have already been released for this budget which impact positively for business:
Tourism is getting a boost to fund some desperately needed infrastructure for our rapidly growing visitor numbers. DOC gets $76 million to put towards its efforts to improve the visitor experience from more information to improving the great walks of New Zealand. In addition, $102 million is going into an infrastructure fund to be used in partnership with local authorities for car parks, toilets and freedom camping facilities. Part of this fund is re-purposed from other funds ($40 million) as opposed to additional money – but still all good.
Although the contribution to our economy is in the region of $23 billion so this money is a mere 0.7% of annual visitor spend so maybe not as substantial as it should have been.
Particularly when you compare to increased funding for the movies which gets $309.3 million over the next 4 years.
Innovation is also being given a boost with an extra $74.6 million available to businesses looking to expand through research and development.
Value added products and free trade deals are also enabled with additional funding of $91 million for MFAT. Also $53 million for the trade expo in Dubai, signalling that the government is looking to boost exports -whether this is the best option is another matter.
Farmers also get some limited help for their irrigation projects of $27 million – weird that we are simultaneously giving it away to overseas interests and paying for more water here!
Transport is funded to repair the broken road link between Picton and Kaikoura to the tune of $812 million which is good news for any South island clients who are suffering with the extra kms to get from top to bottom of the mainland.
However, has the government done much to push us into a future where we have affordable homes, clean water, a secure environment and high productivity translating into good incomes for Kiwis? Have we moved from primary industries to smart new tech? Not so much.
Let’s see what else 2pm brings!
Notes from Budget 2017
Tax bracket changes means more money in the pocket for most. The bottom tax bracket will be increased from $14,000 to $22,000 delivering an extra $11 per week and the $48,000 to $52,000 delivering an extra $20 a week. An average couple will be $41 better off a week.
Working for Families Tax Credits has an $2 billion increase targeting middle income families and the accommodation supplement has been increased to reflect increases in rental costs.
Independent earner tax credit has been scrapped so $10 per week lost to people earning between $24,000-$48,000.
Strong growth being forecast of 3.1% per annum for 5 years due to immigration, construction, tourism and exports although there are economic threats from China and a rise in global protectionism.
Massive spend up on an infrastructure programme of $32 billion over next 4 years which is 40% increase over the last 4 years. This includes rail, roading, broadband and a spend on all sorts of public sector capital programmes from schools to hospitals.
Innovation gets more money across a range of sectors – applied science, tertiary education and innovation – $373 million in total ( $82 million for applied science fund, $132 million to tertiary education, $75 million to Callaghan).
$134 million to advancing trade agreements in the form of new embassies and other initiatives.
$93 million for Maori economic development
$7 billion over 4 years – expand in health, education, law and order and social development – meet growing population demands with $3.9 billion for health sector and $224 million for mental health.
OK, that’s enough numbers. Overall this budget does deliver some great spend on infrastructure, innovation and the core public sector areas with some nice little tax cuts snuck in as changes to the tax brackets.
It lacks, as the National Party always does, any vision for the future of New Zealand and any real movement from the status quo of farming, logging, mining and tourism – would have been fantastic to see some real innovative thinking about our future as as smart economy, taking on the world in the digital age.
Oh, and maybe, stop giving away our valuable water resource whilst at the same time propping up the farmers with some money for irrigation!
What do you think? Contact email@example.com with any budget thoughts.