What's in the Budget 2015 | KPMG | NZ

What's in the Budget 2015

What's in the Budget 2015

Find out what's in the Government's 2015 Budget, that's relevant to you.

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For families with children:

  • The centrepiece of Budget 2015 is a package aimed at reducing child ‘hardship’. Worth $790m over four years, the package has $25 per week increases in both benefits and student allowances for families with children, a modest increase in Working for Families for low income families, and an increase in the Childcare Assistance rate for low income families. The package comes with new obligations attached; based on the Government’s belief that getting beneficiary parents into work is the best way to reduce child hardship. Most sole parents and partners of beneficiaries will have to be available for work when the child turns three, rather than five as at present, and all beneficiaries with part time work obligations will be expected to work 20 hours per week rather than the current 15. Beneficiaries receiving Sole Parent support will now have to reapply for their benefit every year. 
  • There are new measures to tackle child support debt and encourage parents to pay what they owe for their children. Some or all of the penalty debt will be forgiven in certain circumstances such as where liable parents are meeting current payment requirements.

For home buyers and investors:

  • On the demand side, a suite of tax measures announced ahead of the Budget requires all buyers and sellers of property other than the family home to provide an IRD number. This imposes identity requirements on non-resident buyers and introduces a new ‘bright line’ test that will typically see investment property taxed for capital gain if on-sold within two years. A withholding tax on non-residential investors is also being considered for introduction in mid-2016. 
  • On the supply side, Budget 2015 includes $52m to facilitate housing development on Crown-owned land in Auckland, $35m to support the Social Housing Reform Programme, and $48m targeted at improving Maori housing outcomes. The Crown has also previously announced that the Tamaki Redevelopment Company will build around 7500 new houses in East Auckland.

For travellers:

  • There is a new Border Clearance Levy of around $16 for arriving passengers, and $6 for departing passengers, to fund passenger-related biosecurity and customs activities.

For business:

  • Reductions in ACC levies worth $375m in 2016, and a further $120m in 2017. 
  • An increase of $80m over four years to R&D growth grants. 
  • $25m over three years to support the establishment of privately-led Regional Research Institutes.

For savers:

  • Removal of the Kiwisaver $1000 ‘kick-start’ incentive payment.
  • No change to the annual government subsidy or employer contribution rules.
  • These changes do not effect existing Kiwisaver holders and, with 2.5 million New Zealanders already signed up, the Government’s assessment is that removal of the kick-start payment will not substantially change the uptake rate.

For users of social services:

  • An increase of $1.7 billion over four years for public health services, particularly targeting elective surgery, palliative care, orthopaedic conditions and bowel cancer screening. 
  • An increase of almost $50m to further develop Whanau Ora. 
  • $8.5m for intensive case management of beneficiaries, as part of the Government's 'Investment Approach' to social spending.

For students:

  • New spending of $443m on early childhood, primary and secondary education; including $63m over four years for special education, a 1% boost to school operating grants, and 300 extra Trades Academies places. 
  • $112m of funding for tertiary education, targeting tuition at degree level; and raising the profile of engineering, growth in Maori and Pasifika trades training among other measures. 
  • $100m capital for a rebuild of the science facilities within the Lincoln Hub redevelopment; and $244m for new schools, kura and classrooms.

For Christchurch rebuild:

  • An additional $108m over four years to support progress in developing the Anchor Projects.

For infrastructure users:

  • Additional capital of around $200m per year for the next two years for KiwiRail; 
  • $97 million for regional highways; 
  • $52m to replace the Waitangi Wharf on the Chatham Islands; 
  • $40m for urban cycle ways; and $40m capital investment in Te Papa’s buildings.

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