Budget 2024: Home economics

Key announcements from Budget 2024

Those who follow government budgets know that the media have a habit of assigning nicknames to them (likely to the disdain of Ministers of Finance). Some of the more infamous budgets from a tax perspective include the 2005 “chewing gum budget” where some taxpayers would be 67c better off a week… in three years’ time, and the 2008 “block of cheese Budget”, which offered $16 a week to the average worker.

On its last sitting day (31 August 2023), the 53rd Parliament introduced the Digital Services Tax Bill (DST Bill). The controversial Bill proposes to apply a 3% tax on digital services revenue earned from New Zealand customers by large digital services companies.

Health affords us boundless freedom until we no longer have it. It is therefore not surprising that health is always a big election focus for any new government. Many believe our current health system is in crisis. As a nation we are facing a shortage of health professionals, increasing equity gaps in health outcomes, an ageing population and a health system that is struggling to find its mojo post-reform.

Social investment has been the talk of the town since this Government established it as a key organising principle for changing the delivery of social services. This has led to a flurry of announcements, media releases and editorials on the topic.

The 2024 Budget is coming out a little later than normal, due to the time taken to form the coalition Government, and with clear indications that while infrastructure is a priority, the state of the books (and the Government’s fiscal approach) means there is not a lot of money available for new infrastructure announcements.

Tax is something which can be a divisive subject, with everyone seeming to have an opinion about the optimum level of tax collected, the mix of that tax, and who should be paying more or less tax.

Auckland is the economic engine of New Zealand. It’s a busy port, the gateway to Aotearoa for many overseas travellers and a cultural centre. It is home to the largest proportion of our population and it’s the hub for so many of our greatest business success stories.

In our Election Survey with Business New Zealand and Chapman Tripp last year, we noted the primary sector had turned out in force, with nearly half the respondents coming from agriculture, forestry and fishing. On the eve of the 2023 General Election, the primary sector was feeling the pressure on all fronts. The burden of regulation in general had increased the cost of doing business, climate-related policy was having a huge impact, and – interestingly – skills and human capital had become a much larger concern than it had been in 2020.

As part of today’s Budget 2024 announcements, the new Coalition Government has kept its promise from the campaign trail with a tax package that is consistent with the “Back Pocket Boost” package that the National Party campaigned on. Who gets how much will vary based on their level of income, and other circumstances (such as number of children) with middle-income earners being the biggest benefactors of the tax changes.