Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Budget 2010 – Building the Recovery

20 May 2010

Budget 2010 – Building the Recovery

Focuses on growth, helps Kiwi families get ahead

• Delivers the biggest reform of the New Zealand tax system for nearly 25 years, typically leaving someone on the average wage about $15 a week better off and an average family about $25 a week better off.

• Strongly supports research, science and technology – a key engine for a faster growing economy - with $321 million over four years.

• Provides an extra $2.1 billion for frontline health priorities over the next four years – including an extra $512 million in 2010/11.

• Invests an extra $1.4 billion into better schooling and early childhood education over four years – including an extra $417 million in 2010/11.

• Takes more steps to control rising debt and returns the Government to surplus by 2016 - three years sooner than in Budget 2009.

Biggest tax reform in 25 years

• Tax package provides incentives for Kiwis to get ahead, leaves the vast majority better off and tilts the economy towards savings, exports and productive investment.

• From 1 October, all personal tax rates cut, GST rises to 15 per cent and NZ Superannuation, Working for Families and benefit payments will all rise.

• From the start of the 2011/12 income year, the company tax rate will fall to 28 per cent and tighter rules around the taxation of investment property take effect.

• At all taxable income levels, the across-the-board personal tax cuts will more than offset the rise in GST –low, middle and high income groups receive broadly similar proportionate increases in disposable income.

Improved public services

• Another $1.8 billion of lower priority Government spending is freed up over the next four years for priority areas such as healthcare, education and law and order. This is in addition to the $2 billion of lower priority spending found in Budget 2009.

Sound financial management

• The Government will live within its $1.1 billion annual operating allowance for new spending in Budget 2010 It will restrict subsequent increases in the allowance to 2 per cent annually.

Budget initiatives at a glance

(All figures four years to 2013/14, unless stated otherwise)

Investing in NZ’s future – research, science and technology

• $321 million over four years for new science, research and technology initiatives. The centrepiece of the extra funding is a $234 million boost for supporting business R&D – including technology development grants for firms doing significant R&D

Health

Budget 2010 includes an extra $2.1 billion investment in health priorities – including an extra $512 million in 2010/11.

• District Health Boards receive an extra $1.4 billion.

• An extra $51.5 million for additional elective surgery, plus an extra $8 million for breast reconstruction surgery.

• Mental health services funding rises by $40 million.

• $24 million for a national bowel cancer screening pilot programme.

• 20 new medical training places in 2010/11.

• Funding for medicines increased by $80 million.

Education

An extra $1.4 billion will be injected into better schooling and early childhood education – including an extra $417 million in 2010/11.

• Total funding for Early Childhood Education rises to $1.3 billion in 2010/11 – up $107 million on the previous year – and continued funding for 20 hours’ ECE.

• $155.9 million in new operational funding for schools.

• $349.3 million in new operating and capital funding for school property, including $82 million in 2010/11 to fix leaky school buildings.

• $48.1 million for the Youth Guarantee, increasing the number of places available from 2000 to 2500 next year.

• $48.3 million to build ultra-fast broadband support for schools.

Tertiary Education - Savings across the tertiary sector allow for the purchase of 1735 additional full time places at universities and 3173 extra full-time places at Polytechs and Institutes of Technology than previously budgeted, to respond to demand. This will mean the number of places in universities will be 765 greater than this year’s record number and the number of places at Polytechs and Institutes of Technology will be 455 greater than this year.

Social Development

• $90.5 million into a fund for non-government organisations to deliver extra high-quality services.

• $14.9 million invested in services for teenage parents.

• $267 million in 2010/11 to expand the Job Ops programme – doubling the places for 16-24 year olds with low or no qualifications to 12,000.

Housing

• $20 million to extend the Housing Innovation Fund for another year.

• $16 million for grants and loans to support social and affordable housing and a further $4 million to cover loan impairments.

• The Welcome Home Loan limit extended from $280,000 to $350,000 for first home buyers in higher priced areas.

Infrastructure

• Another $1.45 billion for projects in 2010/11 – the second year of a five-year $7.5 billion infrastructure programme.

• Broadband - $200 million for the roll out of ultra-fast broadband, as well as $48 million more for broadband in schools.

• Rail - $500 million for electrification of Auckland rail lines, as well as $250 million for the wider rail network and rolling stock.

• Prisons - $337.4 million to lift prison capacity and manage justice sector pressures.

• Schools - $177.4 million for new schools and school property.

• In addition, $10.7 billion over the next 10 years for State Highways and $3.3 billion in the next five years to upgrade the national grid.

Protecting our borders

• $75.9 million of capital funding for a new joint border management system (JBMS) to replace ageing border clearance systems run by the Ministry of Agriculture and Forestry and the New Zealand Customs Service.

Treaty of Waitangi

• An extra $6.5 million over the next three years to help settle all historic Treaty claims by 2014.

Other key initiatives

• Nearly 40,000 Kiwi households have joined the Government’s home insulation and energy efficiency programme. The Government is investing $347.3 million to retrofit 180,000 homes with insulation and clean heating devices.

• The number of Police has grown by 350 in the past 18 months; the Government is on track for 600 extra frontline Police by the end of 2011.

Budget figures at a glance

• An operating deficit before gains and losses of $8.6 billion forecast for 2010/11 – up from $6.9 billion the previous year, partly due to timing issues around the tax package, which will be fiscally neutral over the forecast period. Deficits will continue until 2016.

• Net Crown debt forecast to rise from 14.1 per cent of GDP in the current year to a peak of 27.4 per cent of GDP in 2015, before falling.

• The Government will live within its $1.1 billion annual operating allowance for new spending in Budget 2010 It will restrict subsequent increases in the allowance to 2 per cent annually.

• Total Core Crown expenses increase by $5.9 billion to $70.7 billion in 2010/11 – including adjustments to welfare benefits and NZ Super, and higher Government finance costs, which fall outside the operating allowance.

• An additional $1.45 billion in capital spending is included in the Crown accounts over the forecast period.

• Gross domestic product is forecast to increase 3.2 per cent in the March 2011 year, compared with the 2.4 per cent predicted in December.

• Budget 2010’s tax package is conservatively forecast to add about 1 per cent to the size of the economy by 2017.

Economic and fiscal data at a glance

budget 2010
table
Click for big version


ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Peters/Ardern Triumph

There are a lot of good reasons to feel joyful about this outcome. It is what so many young voters – the best hope for the country’s future – wanted.

Far more important than the implications for the Economy Gods ( is the dollar up or down? ) last night’s outcome will also mean many, many vulnerable New Zealanders will have a better life over the next three years at least.

Yet the desire for change was in the majority, across the country..>>>More


Reaction

Labour on its agreement |Peters: Post-Election Announcement Speech | Greenpeace “cautiously hopeful” about new Government | ACT - Madman on the loose | E tū ecstatic | Chamber welcomes the outcome | Greens on their joining Govt | EDS welcomes new govt | Immigrant groups worry | Feds ready to engage new coalition government | Labour Ministers of the Crown announced

 

Climate: Increasing Greenhouse Emissions Hit NZ

New Zealand is seeing impacts of excess greenhouse gas emissions in our climate and oceans, according to the latest national report from the Ministry for the Environment and Stats NZ about the state of the atmosphere and climate…More>>

ALSO:


Wellington.Scoop: Arrests At Blockade Of "Weapons Expo"

“We encourage people in Wellington to get down to the Westpac Stadium now for a day of awesome peace action. There will be plenty of food, music and activities to keep us sustained through the day.” More>>

ALSO:

Rorschach Restructuring: PSA Taking Inland Revenue To Court Over Psychometrics

The Public Service Association will be seeing Inland Revenue in Employment Court over its intention to psychometrically test employees reapplying for their roles at the department as part of its controversial Business Transformation restructuring plan. More>>

ALSO:

Nuclear Disarmament: Nobel Peace Prize 2017 Awarded To ICAN

Congratulations from iCAN Aotearoa New Zealand to international iCAN, the other iCAN national campaigns and partner organisations, and the countless organisations and individuals who have worked so hard for a nuclear weapons-free world since 1945. More>>

ALSO:

Expenses: Waikato DHB CEO Resigns

An independent inquiry has identified that Dr Murray had spent more than the agreed $25K allocated for relocation costs, and other unauthorized expenses involving potential financial breaches of the chief executive’s obligations. More>>

ALSO:

Wellington.Scoop: Sad About The Trolley Buses?

The Regional Council’s MetLink is today spending money to tell us that it really loves Wellington’s trolley buses, even though they’re all being taken off our roads by the end of this month. More>>

ALSO:

Post-Election: Preliminary Coalition Talks Begin

New Zealand First will hold post-election preliminary discussions in Wellington with the National Party tomorrow morning and the Labour Party tomorrow afternoon. More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election