The Annual General Adjustment for main benefits will also see an increase of between 4.66 per cent and 5.28 per cent, according to Work and Income. 370,977 people were receiving a “main benefit” in the week ending March 15.
- A single person on Jobseeker Support without children will see their benefit go from $337.74 to $353.46 a week, while a couple will receive $601.46 a week or $300.73 each, up from $574.70 total or $287.35 individually.
- The Sole Parent Support benefit goes from $472.79 a week to $494.80. A couple with one or more children will receive $635.10 together, up from $606.86.
- Pensioners living alone will receive $1038.94 in New Zealand Superannuation a fortnight, while couples who both qualify will receive $1598.36. That’s an increase of $46.20 and $71.68 respectively. Figures from June 2023 show 883,239 people were receiving superannuation.
However, in amongst those boosts, a new charge and a new tax increase will also come into effect.
- Road user charges will be introduced for full or battery electric vehicles, working out at $76 per 1000km, and for plug-in hybrids at $38 per 1000km (read about the grace period, admin fees and other elements in the Herald’s RUC Q&A).
- The trust tax rate goes up from 33 per cent to 39 per cent to match the top personal tax rate, though trusts earning less than $10,000 a year will be exempt under proposals from the Government.
- The Government is also planning to make commercial and industrial property owners pay about $575 million more tax a year by preventing them from deducting depreciation as an expense from April 1.
Speaking to The Front Page about these changes, NZ Herald business editor at large Liam Dann said that the trust changes bring a “degree of fairness” to them.
“A lot of wealthy people have the ability with access to lawyers and accountants to create trusts to effectively keep their money in an entity, which allows their family over time to benefit, but if it means avoiding tax, that other people have to pay who don’t have those trusts, I think it probably isn’t fair.”
Dann said it is trusts that make a profit and keep the money in the trust that would be taxed, as anyone who is paid money from their trust would be taxed at their own personal tax rate anyway.
“The last Labour Government was looking at basing the minimum wage rises on either inflation or wage rises, whichever was the larger. This Government is taking a tighter approach and is basically saying we are going to index it to inflation, which of course should be coming down, and should eventually be around 2 per cent. And so that means it’s going to be a smaller increase over time for some people.”
Dann said that questions remain at a macroeconomic level what these changes could do for the economy as it battles inflation, or for the tight Government accounts.
“Obviously they are a bit tighter than they would have been if Labour was in charge, but maybe a bit less inflationary. The difficulty is right now that when we’re trying to get inflation out of the economy. Anything a government does to ease the pain by actually just handing money back to people is going to get spent in the economy and is going to add to inflation.”
Listen to the full episode for a full breakdown on the changes coming on April 1.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.
