30th May 2024
BUDGET DAY 2024 ANALYSIS
The Government has released their Budget for 2024 and the following is a brief overview of the key announcements.
EXECUTIVE SUMMARY OF BUDGET 2024
Tax cuts are being delivered through tax bracket adjustments, to the tune of $2.57 billion.
Surplus is expected to arrive in 27/28, one year later than previously envisioned.
Health receives a $16 billion dollar boost to funding over the next four years.
$2.68 billion towards roads, rail, and public transport, with $103 million set for addressing pressures in New Zealand’s infrastructure pipeline.
Current operating costs will be $3.2 billion, with future operating costs set for $2.4 billion.
TAX
Nicola Willis delivered her first budget yesterday. Leading up to the reveal, it had been described as a ‘No Bells, no Whistles’ budget. Suffice to say, Willis delivered on those promises with operating costs not seen since Joyce’s budget back in 2017. Further budgets will lower Willis’s current $3.2 billion operating cost to $2.4 billion. This comes with the forecast that the Government will reach surplus by 2027/28, one year later than originally envisioned, but a signal nonetheless of the direction of this government.
If there was one aspect of Budget 2024 that was eagerly anticipated, it was tax cuts. There were always going to be questions as to how much Kiwis would see back, how it was funded, and whether or not it required borrowing to achieve. It was the first thing that Willis mentioned in her speech, setting the tone for the rest of the day. Willis invited Kiwis to use their own tax calculator to figure out how much they will receive.
Included in the detailed tax plan was an announcement of the adjustments of the tax brackets. The changes are as follows…
From 31 July, personal income tax thresholds will rise.
They will rise from $14,000 to $15,600; from $48,000 to $53,500; and from $70,000 to $78,100. This reduces income tax for anyone earning over $14,000.
Willis claimed that over 700,000 kiwis will benefit by at least $75, with a further 187,000 benefiting by $100. On average, households will benefit by $60 a fortnight, jumping up to $78 for houses will children.
To read Willis’s opening speech click here, to read her tax release, click here.
HEALTHCARE
The Health sector received a $16 billion dollar boost to funding over the next four years. This includes an increase to Pharmac funding by $1.7 billion, but unfortunately the trade-off being that the ring-fenced funding for the 13 specific cancer drugs was not included.
Of the $16 billion dedicated to Health, this includes the operating and capital costs for…
$3.44 billion for hospital and specialist services through Te Whatu Ora - Health New Zealand
$2.12 billion for primary, community and public health through Te Whatu Ora - New Zealand
$1.77 billion for Pharmac
$31.2 million to gradually extend free breast screening to an additional 60,000 women each year
$31 million for increased security at emergency departments, to ensure safety for patients and staff
$22 million to train 25 more doctors each year
$9.7 million to establish a National Mental Health and Addiction Community Sector Innovation Fund
Besides investment into the frontline services, there is also $103 million put towards supporting infrastructure in the Health sector. If you would like to read Shane Reti’s full release, click here.
TRANSPORT
Transport was not as heavily featured as other areas such as Health, Tax and Infrastructure. That doesn’t mean, though, that there weren’t announcements made. In fact, there were some surprising revelations included in the transport section, which have been surprisingly absent from most media discussion.
$939 million has been allocated to repair roads across the North Island that were damaged due to severe weather events last year
$59.7 million will be spent on decarbonising bus fleets
$44 million will be given to support the Civil Aviation Authority
$266.9 million to upgrade and maintain the Rail networks in Auckland and Wellington
$200 million has be allocated to KiwiRail, for maintenance and repairs of the national Rail network
To read Simeon Brown’s transport release, click here.
INFRASTRUCTURE
Infrastructure got some crucial funding commitments yesterday. Leading up to Budget Day, the announcement of the Roads of National Significance essentially signalled the government's interest in that area. The announcement totalled over $6 billion dollars of infrastructure spending.
Highlights of the infrastructure funding include $1.2 billion for the Regional Infrastructure Fund, $2.68 billion for roads, rail and public transport, of which the 17 new roads of national significance make up $1 billion of that amount.
One of the headlines in the leadup to Budget 2024 was the government’s change to social housing, with the promise than come Budget Day, there would be an announcement around how they it will operate going forward. To that effect, they have put $140 million into delivering 1,500 state houses.
Infrastructure is undoubtedly going to be a key issue for this Government for years to come, as Chris Bishop said in his release today, which you can read here.
“Budget 2024 is just the start of the coalition Government’s commitment to fixing New Zealand’s infrastructure system and addressing our massive infrastructure deficit.”
