Finance Minister Nicola Willis unveiled a $14.7 billion tax package featuring tax cuts ranging from $4.50 to $135 a week for income-earning Kiwis.
Income tax brackets will be adjusted in line with what National campaigned on to save taxpayers up to about $1043 a year.
“The last review of tax brackets was more than a decade ago. Going forward, we’d like to see a regular review to ensure we don’t see bracket creep of this scale in future,” Hope said.
He also welcomed the increase in funding for the Ministry for Regulation with the hope that “businesses are able to effect change without the burden of unnecessary compliance costs.”
However, Hope cautioned the Government will need to be rigorous in its pursuit of keeping expenditure down if it hopes to return to a surplus by the 2027-2028 window.
“This year’s Budget presents a path back to surplus, but the real test for the Government will be the need to maintain a tight grip on expenditure, with operating allowances for Budget 2025-2027 being tight,” he said.
Business Canterbury chief executive Leeann Watson said the Government delivered a “no-frills” Budget that appears to be focused on getting back to the basics.
“In a survey of over 400 businesses released earlier in the week, businesses told us that delivering outcomes in infrastructure, health, education and law and order should be prioritised… it appears this has been the case,” Watson said.
Watson said the additional $8.15b spend on health and education will be welcomed by businesses.
“Of course, it is also important that the Government continues to look at non-financial measures like regulation and red tape that holds businesses back, and the newly established Ministry for Regulation will be a key driver of this,” Watson said.
She said tax cuts “will help all New Zealanders and will go some way to easing cost of living pressures being felt, particularly important for small businesses who are the engines of growth in our economy.”
“The real proof in the pudding will be on the delivery of outcomes from this Budget, and all eyes will be on how quickly the Government can complete its so-called ‘turnaround job’ for the economy,” Watson said.
Dom Kalasih, chief executive of Transporting New Zealand – the main national association representing road transport operators – said investments in transport and tax relief will be welcome news to its members.
“Roads in New Zealand have been desperately underfunded for decades so new investment in highways, including national and regional roads of significance, is desperately needed… Kiwis can’t continue to put up with deteriorating roads that are jeopardising economic growth, which is vital for the community and businesses,” Kalasih said.
Willis’ Budget will provide for $1b in spending to accelerate land transport projects including Roads of National Significance.
Other transport investments include $939m to repair roads damaged by last year’s severe weather events in the North Island, and $200m for maintenance and renewals on the national rail network.
Another $1.2b will go to the new Regional Infrastructure Fund, and the Government will also establish a National Infrastructure Agency.
Federated Farmers president Wayne Langford also noted the no frills or surprises in this year’s Budget.
“We’re pleased to see all of the non-negotiables are still there, with continued funding for frontline biosecurity, catchment groups, and the cyclone recovery,” Langford said.
He said farmers just wanted to see the Government continue to cut unnecessary red tape and compliance costs that have been bogging them down.
“The road to New Zealand’s economic success isn’t paved with more red tape, regulation, and compliance costs - it’s paved with milk, meat, fruit and grain.
“We need to be unshackling the potential of our productive sectors who create jobs and earn and income for the country.”
James Doolan, strategic director of Hotel Council Aotearoa, said reversing the previous Government’s cuts to Tourism New Zealand funding through tapping into the International Visitor Levy was a pragmatic decision.
“But HCA would have preferred that money to come from the consolidated fund. It looks like Treasury is assuming that the IVL doubles to $70,” Doolan said.
“The IVL was originally conceived as a way to transform tourism in New Zealand through thoughtful investment in conservation and tourism infrastructure. It was not supposed to replace existing funding streams.
“Over time, the IVL has instead become a general tourism funding pot with insufficient checks and balances around how money is applied and whether good outcomes are being achieved.”
He welcomed the $4.1b of Crown Funding for the National Land Transport Fund and $1.2b of funding for the Regional Infrastructure Fund.
“High-spending international tourists demand high-quality infrastructure and amenities,” Doolan said.
