Last week, Bill English delivered the first budget of the National Government. In it, he confirmed the deferral of the planned personal tax cuts in 2010 and 2011. This came as no surprise to many.
We have outlined a very brief summary below of the main budget items which will have tax implications for many New Zealanders.
- Personal tax cuts that came into effect from 1 April 2009 remain unchanged.
- Revenue Minister, Peter Dunne announced that the KiwiSaver mortgage diversion facility is to be closed to new applicants from 1 June 2009.
- Automatic contributions to the New Zealand Superannuation Fund (NZSF) have been suspended. A contribution of $250 million will be made to the NZSF in 2009/10.
- $323 million allocated to fit homes with insulation and clean heating devices. More than 180,000 homes will be eligible for grants of up to $1,800.
- Total of $3 billion allocated to improving health access and services between 2008/09 and 2012/13;
- $1.3 billion in operating spending for education and $340 million in capital spending between 2008/09 and 2012/13.
- $701 million in operating funding and $256 million in capital funding over the next four years across the justice sector. This includes, Government spending to put 600 new police onto the streets by 2011 and to construct nearly 1,000 extra prison beds.
- $1 billion over the next three years to be spent on roading. Total spending is estimated at $10.7 billion over the next decade.
- $258 million of new rail funding;
- Up to $1.5 billion allocated to accelerate the roll-out of ultra-fast broadband; and
- $114 million in operating spending and $17 million in capital spending for research, science and technology.
So what does this mean to you?
If you would like to discuss how these measures may affect you and your financial situation, please contact us.