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17.04: CTU economist Dr Bill Rosenberg describes today's
budget as "fundamentally unfair".
"Someone on the minimum wage of $26,520 gets an extra
$4.13 a week but someone on four times the minimum wage
or $106,080 gets an extra $43.08 a week," he said.
"Their tax cut is 10 times more than the worker on the
minimum wage."
"Even worse, someone on ten times the minimum wage gets
a tax cut of $153.92 a week, which is around $150 more a
week than the person trying to get by on the minimum
wage."
16.58:The Green Party says cuts to the budget for
improving and buying state houses - from $120m to $18m -
will hurt New Zealand's "most vulnerable people".
"There are over 10,000 people on Housing New Zealand
waiting lists, and John Key, who grew up in a state
house, has decided that they do not matter," said
co-leader Metiria Turei.
16.53: Budget tax revisions designed to take distortions
out of the rental property market are not expected to
have a significant long term effect on house prices or
rents, says Real Estate Institute of New Zealand
president Peter McDonald.
"REINZ supports the government's moves to make the
taxation system fairer and close the loopholes that
enabled some people and businesses in all sectors to
rort the system," he said, adding that "other property
investors will replace those who were primarily
attracted by the tax breaks,"
16.28: Employers and Manufacturers Association chief
executive Alasdair Thompson describes the Budget as the
fairest in more than a decade. "Business will welcome
the tax rebalancing being put in place in the budget as
it will be much fairer," he said.
16.26: The Researched Medicines Industry Association (RMI)
has welcomed a medicine funding increase of $80 million
over the next four years, with the Government
contributing an additional $40 million of that funding.
16.18: Andrew Casidy of bank workers' union Finsec has
described today's tax cuts as "simply unfair."
"The wealthiest New Zealanders will benefit the most
from today's tax cuts," he said, "the very people who
can best afford to contribute more to a fairer society.'
16.10: Children will be the big losers in today's
budget, says New Zealand Kindergartens. Clare Wells,
chief executive of the national group representing 29 of
the 33 kindergarten associations across New Zealand,
said members were deeply shocked at the Government's
decision to cut funding to early childhood education
services, saying the Budget will strip over $12m per
year from kindergarten budgets.
16.02: Labour Party early childhood education
spokeswoman Sue Moroney said 108,000 children would be
affected by a policy change in ECE to cut funding to
centres that have more than 80 per cent qualified staff.
Affected centres would be reluctant to fire their
qualified staff and would likely pass on extra costs to
parents, Ms Moroney said.
Three of five children in ECE centres would be affected,
she said.
16.00: Business owner structuring income to claim for
Working for Families - $153.03c per week worse off.
15.58: Labour Party health spokeswoman Ruth Dyson said
the level of health spending would leave a "huge hole"
and force DHBs to make cuts in services.
"This isn't enough for the health sector to stand
still," Ms Dyson said.
Costs would increase due to the GST rise and the money
allocated was hundreds of millions of dollars short of
what had been estimated as necessary to maintain
services, she said.
15.52: Food and Grocery Council chief executive
Katherine Rich says today's Budget is a significant step
forward. "Changes to the GST system have a direct impact
on the grocery sector, but these were signalled well in
advance by the Government back in February. This has
given the sector a head start in thinking about and
preparing for the required changes," she said.
15.46: Wellington Regional Chamber of Commerce CEO
Charles Finny says the Budget will provide a solid
platform for economic growth. "The rebalancing of the
tax system away from income tax is a sound move that
will improve New Zealand's economic performance by
increasing incentives to work, save and invest," he
said.
15.32: The Government intends to issue $12.5 billion of
bonds in the year to June 30, 2011, which is $2b less
than signalled in the December half-year update.
15.26: nzherald.co.nz poll shows mostly positive
reaction to today's Budget, with 70% voting it a
'winner'.
15.21: Community Gaming Association chairman John Burke
says GST increase to 15% will mean less money for
community groups from proceeds of gambling. He notes
that, on top of GST, the Government already takes 20% of
net revenue as a Gaming Duty, more than 1.5% as a
Problem Gambling Levy and about another 1%-2% as fees
for monitoring, licensing and compliance activities by
the Department of Internal Affairs.
15.18: Business New Zealand says the Budget will be
viewed by companies as a positive move toward a more
competitive, higher-earning economy. Chief executive
Phil O'Reilly said the tax provisions were pointing in
the right direction and the consistency of 28 percent
for company and PIE taxes would make the system fairer.
15.15: Standard & Poor's said that its views on New
Zealand's sovereign creditworthiness was not immediately
affected by today's budget. It has New Zealand on an AA
plus long-term rating. "Although the deficit in 2011 is
large, we note that the outlook has improved since the
last budget and there remains an achievable and
believable path to return the operating position to
surplus,' credit analyst Kyran Curry said.
15.01: An extra $26.6 million funding over four years
will help Inland Revenue to increase property
transaction audits and compliance activity to ensure
people who trade in property comply with law and pay tax
on trading gains, said Peter Dunne.
14.58: An email poll of key Auckland retailers by
Newmarket Business Assn shows 82 percent of respondents
believe the timing of the Government's GST increase is
"bad'.
14.52: The Government will provide $2 million in new
funding in 2010/11 so the Department of Labour can
provide "more robust ACC policy advice" says ACC
Minister Nick Smith says.
14.50: Budget tax changes" won't stop anyone leaving for
Australia," says CTU's Bill Rosenberg. "Treasury
calculates the net benefit will be 0.7 percent for those
on high and low incomes, and 0.4 percent for middle
income New Zealanders" and that "these figures are
hardly enough to bridge the 20-30 percent income gap
with Australia."
14.45: Deloitte tax partner Allan Bullot says businesses
will need to prepare quickly for October 1 GST rises
(12.5% to 15%). "Many businesses, particularly small to
medium-sized ones, weren't around when GST was last
increased in 1989 and possibly haven't considered all
the practical implications of an increase."
14.43: Greens slam Budget, with co-leader Dr Russel
Norman saying: "The Government is borrowing to pay for
poor quality spending on tax cuts that heavily favour
the wealthy, more motorways for more congestion, and
subsidies for the worst climate polluters." Party labels
Budget "of fiscal, social and environmental deficits
when smarter options were available"
14.41: Maritime Union says Budget is an attack on
working class new Zealanders. GST increase was taking
money from the pockets of workers to pay for tax cuts
for wealthy says general secretary Joe Fleetwood.
14.38: There has been no move to change the 20-hours'
early childcare subsidy as some had predicted.
14.37: Budget includes an extra $93 million for
disability support services over the next four years -
"This Government is spending more than has ever been
spent on disability support services," says Health
Minister Tony Ryall.
14.35: Disability Issues Minister Tariana Turia says
$6.8m to be invested over next three years - $1.5m to
help promote design standards for homes; $2.34 million
to help promote, protect and monitor the rights of
people with disabilities in line UN convention; $3m for
public awareness campaign
14.31: NZ sharemarket response to Budget muted -
benchmark NZX-50 index improved only slightly to
3120.472 from 3118.837.
14.30: The New Zealand dollar responded positively to
today's Budget, rising against those of our main trading
partners. It was worth an even US68c at 2pm and then
rose to US68.27c, and against the Australian dollar, up
to A80.89c, from A80.63c
14.29: Social Development Minister Paula Bennett says a
$26.7m investment in Job Ops programme will double
placements of un- or under-qualified 16-24 year olds in
programme to 12,000.
14.26: An extra $1.4 billion is allocated to education
over four years and increases operational funding for
schools by 4 per cent, well above the rate of inflation.
14.24: New personal tax thresholds rates are -
$0-$14,000 will drop from 12.5 percent to 10.5 percent;
$14,001-$48,000, 21 percent to 17.5 percent;
$48,001-$70,000, 33 percent to 30 percent; over $70,000,
38 percent to 33 percent.
14.22: Associate Corrections Minister Pita Sharples says
Budget funding for two reintegration units for prisoners
will help to reduce re-offending and re-imprisonment
rates. Budget allocates $19.8 million over four years
for building and operating two new 16-bed units by
2011/12.
14.20: Health will get $1.95 billion in operating costs
over the next four years. Of this, $186m was re-prioritised
from within vote health, mostly coming from admin
services cuts.
14.19: Owners of both commercial buildings and rental
houses will no longer be able to claim depreciation on
them.
14.16: Business Roundtable executive director Roger Kerr
rates the Budget 6.5 out of 10 - "There is not much we
would be critical of," he said, "The budget reveals
sound steps but not step changes."
14:15: Communications and Information Technology
Minister Steven Joyce says a further $248m will be
provided for broadband initiatives as part of $1.5bn
fibre investment. A further $200m allocated towards
Crown Fibre Holdings broadband infrastructure for
2010/11.
14.12: Defence to get an extra $35 million a year to
fund increased costs and new equipment for the New
Zealand Defence Force.
14.11: Prisons get $69.3m over four years - $24m towards
new Wiri prison, South Auckland; $45.3m for 245 beds at
Mt Eden Prison; $11.2m for literacy, numeracy and
work-based training for prisoners.
14.09: An extra $93 million for disability support
services over the next four years, Health Minister Tony
Ryall and Disabilities Issues Minister Tariana Turia
say.
14.06: Bill English says across the board personal tax
cuts, and other changes will leave average wage earners
about $15 a week better off, and average family about
$25 per week better off.
14.03: "Last year's Budget was focused on getting New
Zealand through the worst global crisis in living
memory," says Finance Minister Bill English.
"This Budget is about our long-term objective of lifting
New Zealand's growth rate and New Zealanders living
standards."
14.00: BUDGET QUICK POINTS
- GST increases from 12.5pc to 15pc
- Company tax rates fall from 30pc to 28pc
- All income tax brackets fall, with the top rate levied
on income over $70,000 per year coming down from 38pc to
33pc.
- Landlords and businesses will no longer be able to
claim depreciation on buildings that are expected to
increase in value.
- Rules around 'loss attributing qualifying companies'
often used by property investors to reduce their tax
payments are being tightened.
- All benefits including NZ Super and working for
families will increase by 2.02pc to compensate for the
increase in GST.
- An extra $2.1bn is being spent on health over the next
four years, which includes $1.7bn of new operating
funding.
- Funding for schools is going up by $1.4bn over the
next four years, which includes $350m in new operating
and capital funding for school property.
Source:
New Zealand Herald, New Zealand, dated 20/05/2010
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