Government pedals for growth

2014 Budget Brief

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Budget 2014 is first and foremost a conservative budget. You could only be disappointed if you went into it expecting something spectacular. This budget didn’t disappoint because we got exactly what we expected: more of the same.

The much promised return to surplus, a key plank of the Government’s strategy over the last few years, has been delivered. The surplus is forecast at $372 million for 2014/15, and expected to grow to $3.5 billion in 2017/18.

No changes have been announced to personal or corporate income tax rates or to the GST rate.

An explicit capital gains tax or fundamental reform of New Zealand’s tax system is off this Government’s agenda.

The Government focuses on economic fundamentals - investment, skills and productivity.

At a glance:

  • Two new measures to support business R&D, both expected to apply from the 2015-16 income year
  • Duties on some building products will be removed temporarily
  • A further $40 million will be invested in Crown Irrigation
  • Science and innovation funding receives a boost
  • Further ACC levy cuts may be possible in 2015-16, particularly for motor vehicle levies and possibly for employers and the self-employed
  • An additional $171.8 million over 4 years to enhance parental leave provisions
  • Funding for three major Maori economic initiatives, to support implementation of He Kai Kei Aku Ringa, the Maori Economic Development Strategy and Action Plan