New Zealand’s size and lack of scale compared with other countries means that our businesses are not as green in their actions compared with other countries.
The Budget spells out a programme of new and continuing spending including $1 billion for “modernising and transforming schools,” $12 billion on state highways over 12 years, $76m for a new technology institute, $4.6 billion Transpower upgrade of the national grid, $1.35 billion rollout of the ultrafast broadband, $300 million for rural broadband, a $385 million increase in science and innovation and $287 million to reduce welfare dependency over 4 years.
Any thoughts of further fundamental changes to the tax system have well and truly been put to bed by a budget devoid of any real tax substance. The headline tax change being the rise in excise duty on tobacco confirms the fact that, for now, everything major has been done.
With focus on a zero budget, there was little room for movement on fundamental policy changes. Changes to tax policy were no different. The headline change was an increase in tax excise on tobacco products. Other changes included...
An austerity budget is no surprise, but don’t we need a slightly more balanced approach with some stimulus from the government to give the economy a kick start?
More funding for Inland Revenue: Today’s budget provides a tick of confidence for the Inland Revenue with an extra $78.4m of funding over the next 4 years to be used to extend its successful tax compliance activities in dealing with the hidden economy, debt collection and taxpayers who have not filed their returns.
They say that necessity is the mother of invention. Out of the Canterbury earthquakes emerged new ways of delivering public services. Borne out of necessity. Often difficulty or crisis is the only way that innovative change and real leadership occurs.
At a glance, vote health is one of the main benefactors in the budget. “Despite tight financial times, the Government is spending $14.12 billion in 2012/13 on health – the biggest investment ever,” Health Minister Tony Ryall says.
A commitment by Prime Minister John Key in the run up to the last election not to touch the New Zealand Superannuation scheme (NZ Super) means that it will again be missing from this year’s Budget, but the whale in the fish tank is only getting bigger.
Be prepared for a cat amongst the pigeons come Thursday, 2pm with an announcement of the introduction of a Capital Gains Tax (CGT) for New Zealand.