Listen to Auckland Tax partner Bruce Bernacchi on Newstalk ZB
Workers and families are the winners in the Government's election year Budget. It delivers more cash in the hand to almost everyone. Finance Minister, Steven Joyce, has followed through on pre-Budget commitments to streamline Working for Families tax credits. From April the rate for an eldest child will increase to $9 a week and for subsequent children by up to $27 a week. And Mr Joyce says abatement rate thresholds will also be cut.
Approximately 310,000 families will benefit from these increases to the family tax credit and it will be slightly more targeted to lower income families by those threshold and abatement changes.
Mr Joyce has also announced changes to tax thresholds. KPMG's Bruce Bernacchi, told Kerry McIvor and Mark Dye what that means for your pocket.
If you're earning $22,000 it's an extra $11 a week. If you're earning $52,000 or above $22 a week.
A little bit of money for almost everyone. Finance Minister, Steven Joyce, expects his Budget to give 1.3 million families an average of $26 extra a week with 750,000 superannuants and 41,000 students also getting a little extra every week. Changes to tax thresholds from April next year will leave $2 billion a year in workers pockets, but the biggest boost comes for beneficiaries and those on low incomes who get Working for Families tax credits and accommodation supplements. Those in high rent areas such west and south Auckland and Christchurch will get up to $145 a week more. Mr Joyce says with the increases to wages it will come into effect from April next year. Payments to pensioners will increase too.
STEVEN JOYCE: The couple rate for superannuitants will increase by $13 a week on 1 April next year in addition to the normal adjustments because of wage indexation.
NEWSREADER: However, there are concerns the current super scheme may be unsustainable over the long term. KPMG's Bruce Bernacchi told Kerry McIvor and Mark Dye, the Government's plans to gradually increase the super age won't be enough. He says it could make KiwiSaver compulsory or increase employer and employee contributions.
BRUCE BERNACCHI: There's an opportunity there given the strong financial position the country finds itself in to do something more in terms of government contributions to KiwiSaver.
KPMG has launched a state of the art digital platform that enhances your experience and provides improved access to our content and our people, whatever device you are on.