NZ BUDGET 2024

Hello  Everyone,

In politics land the equivalent of Christmas Day is Budget Day.  This year the Budget was delivered on Thursday 30 May 2024.  Like Christmas Day, some will be happy with what Santa Claws Nicola Willis provided.  Others will be suffering disappointment, citing Grinch behavior at the austerity of what’s on offer.

Prior to election, National’s campaign centered around assisting New Zealanders with the high cost of living we’re suffering.  In particular, National promised to introduce policies to provide taxation relief and effect changes to health, law and order and education.  Did the Government uphold their promises via the Budget.  Keep reading to see.

SNAPSHOT BUDGET 2024

TAXATION RELIEF

• $14.7b pledged comprising:
  • Adjustment to personal income tax brackets by increasing thresholds for the lower three income tax rates, corresponding increases to FBT and ESCT thresholds;
  • Extended the independent earner tax credit threshold from $48 to $70K ($10 a week);
  • Increased the in-work tax credit and the minimum family tax credit; and
  • Introduced Family Boost

From 1 August 2024 when tax cuts come to fruition, employees will feel some relief.  Other credits will assist those needing some benefit support. The Family Boost will provide support to households and assistance with early childhood education costs.

HEALTH

• $8.15b pledged to ease cost pressures our health system experiences and increase services including some medication via Pharmac kiwis rely upon. 

National said it wanted to improve access to services and delivery of services for Kiwis hence this allocation in the Budget. Disappointing however the 13 cancer drugs mentioned in National’s pre-election manifesto wasn’t covered by Budget 2024.

LAW AND ORDER

• $2.9b committed to improve law and order which includes expanding Waikeria Prison facilities.

Law and order was a pivotal issue National identified kiwis were worried about.  Their spend pledge under this Budget is in line with providing for additional policing and correction officers, addressing youth offending and purchasing of assets such as police vehicles.

EDUCATION

• $1.5b pledged to build new schools and classrooms and upgrade existing buildings.

National wants to improve the education every child in New Zealand gains, so they possess the skills and qualifications needed to fulfil their potential.  This spending is one way in which they intend to realise that aim.

CONSTRUCTION AND INFRASTRUCTURE

• $2.68b committed over 4 years for roading, rail and public transport.
• $1.2b pledged for Regional Infrastructure Fund.

The aim is to grow regional economies via new and existing infrastructure project investment.

HOUSING

• $1.5b pledged to build 1500 new social housing properties.

National promised to reduce social housing wait lists and this commitment is made to achieve the objective.

WINNERS AND LOSERS

At a micro level, under this Budget it's expected 83% of New Zealanders will come out winning via the adjustment made to income tax brackets.  Families and those with children receiving early childhood education will be pleased at what’s on offer .  From a macro perspective, police and those operating in the health care sectors do well too.  Whilst policies were announced pre-Budget release, residential property investors will be on the winning side of the ledger via reduction of the Brightline period and reinstatement of interest tax deductibility. Clearly not a winner are those in commercial building ownership with the scrapping of commercial building depreciation.  Nor has the business sector benefited.  It didn’t expect much under this Government’s first Budget and it certainly wasn’t disappointed. Perhaps assistance will come as the books become more balanced.

SUMMARY

We all like those who keep their promises.  That is exactly what National and Nicola Willis have done – upheld their pre-election pledges in this Budget.  Whether the Budget will prove to be fiscally neutral as the Government purports however, is a wait and see game.  We’ve been told savings and reprioritization initiatives to offset tax cuts and new spending allows delivery without causing an increase to inflation.  Let’s hope that’s correct because a population fighting high costs of living won’t be happy with a Government that makes good on its promises at the expense of driving up costs of survival.

Any questions on the Budget, feel free to contact your Greenlion advisor.

Your Greenlion Team

Ph: 09 601 8391
E: hello@greenlion.co.nz