The main highlights:

  • Deficit expected to be $684 million with a very slim improvement to a $176 million surplus in the 2015/16 year.
  • A $25 a week increase in four major benefits from April 1 next year aimed at addressing child poverty.
  • The package’s $790 million cost over the next four years will be partly funded by the removal of the Kiwisaver “Kickstarter” package  — a gain of $500 million.
  • But beneficiaries with children will now be expected to be available for 20 hours part time work a week once their children reach three.
  • And Working for Families payments will drop for by an average of $3 a week for those earning over $88,000.
  • A new border clearance levy of $6 for a departing passenger and $16 for one arriving is estimated to raise $100 million.
  • Inland Revenue will write off $1.7 billion in penalty payments on child support .
  •  $25.4 million over two years to pay for the army’s anti -ISIS deployment in Iraq.
  • Forecast ACC levy deductions of $375 million in 2016 and $120 million in 2017.
  • KiwiRail receives $209.8 million capital in 2015/16 from the Future Investment Fund. A further $190 million will be funded in Budget 2016.
  • The SuperGold Card off-peak public transport concession scheme will receive an additional $10.2 million of operating funding for the 2015/16 financial year. This will bring total funding for 2015/16 to $28.1 million.
  • A contingency of up to $210 million in capital funding from the Future Investment Fund secures the next stage of the Ultra-Fast Broadband (UFB) in extending it to 80 per cent of New Zealanders. This will be finalised following a business case.

 

Assumptions:

  • Growth to be 3.1% to March 2016; thereafter — 2.8% to March 2017; 2.8%, 2018 and 2.4% to March 2019.
  • Ninety interest rates are estimated to remain stable around 3.6% to the end of 2016 before rising to 4.9% in the June 2019 quarter.
  • The trade weighted exchange rate index is expected to decline in the June 2019 quarter.
  • Net migration inflows are assumed to rise to 56, 600 in  the year ended June 2015 but to fall to 12,000 a year in the eyar ended June, 2017.
  • Economic growth forecast to average 2.8 per cent over the next four years.
  • Average wages expected to rise by $7,000 to $63,000 a year by mid-2019.
  • Unemployment forecast to fall below 5 per cent in 2016.
  • In line with the allowance set in December, Budget 2015 has a net operating cost of $1 billion per year. This is made up of $6.1 billion of new operating spending over the next four years, of which $2 billion is funded through reprioritisation and increased revenue.
  • 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.
  • Net core Crown debt is forecast to peak at 26.3 per cent of GDP in 2015/16, and then fall to 19.7 per cent of GDP in 2020/21.

Tax Cuts in 2017

  • Government remains committed to $1 billion new operating allowance in Budget 2016, increasing to $2.5 billion in Budget 2017 to allow for modest tax cuts before returning to $1.5 billion a year in Budget 2018 and growing thereafter at 2 per cent per Budget.

 

 

Sorry, but access to POLITIK requires a subscription. Subs start at $15.95 per month. (All prices include GST, full details including Ts&Cs on the FAQs page) Subscriptions include the highly regarded daily newsletter, POLITIKToday. (Don't worry, you can cancel at any time.)

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nulla ac tellus sed purus sollicitudin pharetra. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vestibulum nec dolor vel ante egestas fermentum. Sed consectetur libero at mauris commodo efficitur. Nunc malesuada auctor dui in viverra. Suspendisse faucibus lacinia neque, in eleifend sapien dignissim eget. Vivamus ipsum augue, aliquet iaculis aliquam in, ullamcorper ut risus. Aliquam ut elit magna. Nunc id odio libero. Ut egestas magna et ex fringilla tristique. In volutpat elementum nisl. Vestibulum a risus efficitur, fermentum mauris in, malesuada enim.