Alrighty, folks, let’s dive into the latest Budget news that’s been making waves. So, the coalition government decided to tighten its belt and cut back on spending by a cool $5.3 billion each year for the next four years. And where did they find these savings, you ask? Well, about half of it came from shaking things up with pay equity. The other chunk was scraped together by slashing KiwiSaver contributions, toughening up welfare rules for 18-and-19-year-olds, and fully means-testing the Best Start child payment.
But hold onto your seats because it’s not all about cutting back. The government also threw in an extra $6.7 billion per year in new spending. Most of that cash is going towards health, education, law and order, and defense. Oh, and there’s this shiny new $1.7 billion “Investment Boost” tax incentive for businesses that’s supposed to be the star of the show. Plus, there’s some targeted support to help with the cost of living. Sounds like a mixed bag, doesn’t it? Well, that’s budgeting for you.
Now, the Queen of the Budget, Nicola Willis, proudly presented this fiscal plan as “responsible.” She made sure to mention that it’s definitely not austerity – in fact, it’s the complete opposite. According to Willis, this is all about dodging austerity like a pro. But hey, how much did they manage to save with that pay equity shake-up? Brace yourselves, budget aficionados, because the government is looking at pocketing a sweet $2.7 billion every year thanks to those changes. And guess what? They even managed to repurpose an extra $1.8 billion from past contingencies related to the scheme. Talk about making it rain!
The KiwiSaver retirement savings scheme also took a hit in this Budget. The government decided to chop the annual contribution in half and capped it at $260.72. And if you’re pulling in over $180,000 a year, well, tough luck because you won’t be getting anything. On top of that, employee and employer contributions are getting a slight bump over the next three years. Oh, and let’s not forget about the 16-and-17-year-olds who are now getting in on the KiwiSaver action starting next April. Gotta start saving early, right?
But wait, there’s more! The Best Start child payment scheme is getting a good old income test treatment. Families will see those payments cut off once they hit the $97,000 annual income mark. And let’s not overlook the Jobseeker benefit tightening its eligibility screws for the 18-and-19-year-olds. They’ll need to pass a “parental assistance test” to prove they’re on their own. It’s all about tightening those purse strings, folks.
Now, let’s talk about the cherry on top – the Investment Boost. Willis proudly introduced this shiny new tax incentive to give businesses a little boost in their step. With this policy, businesses can deduct a chunk of the cost of new assets from their taxable income. It’s like getting a discount on your taxes for investing in your business. The government is hoping this move will give the economy a nice little nudge in the right direction. Looks like they’re putting their money where their mouth is.
And that’s a wrap, folks! The Budget is out, the numbers are crunched, and the government is ready to roll with its new fiscal plan. Time will tell if these changes will pay off in the long run. But hey, that’s budgeting for you – a little give, a little take, and a whole lot of number-crunching. Let’s see how it all pans out in the end.