KEY POINTS:
Key points in today's Budget:
* $3 billion to enhance the KiwiSaver scheme, including a tax credit of up to $20 a week for employees contributing to the scheme. Compulsory employer contributions starting on April 1, 2008 beginning with 1 per cent of an employee's gross salary with the rate of compulsory employer contributions increasing to 4 per cent by 2011/12. Employers will be reimbursed for this, also with a tax credit of $20 per week per employee.
* The company tax rate to be reduced from 33 per cent to 30 per cent, which will cost the Government $2.1b over four years in lost revenue;
* $630 million over four years on a tax credit for research and development, $87.8m over four years to help firms take new products to new markets, and $53m over four years for industry training also part of the Government's business tax reform package;
* The $1890 rebate threshold on charitable donations made by individuals and the 5 per cent deduction limit on donations made by companies and Maori authorities to be scrapped, a move estimated to cost the Government $65m over four years in lost revenue;
* $500m in capital funding over four years towards the electrification of Auckland's rail network, upgrade and maintenance of Wellington's network and improvements to the national network. $145m set aside for unexpected costs associated with the state highway construction programme;
* Provision for a regional fuel tax for specific transport projects. A regional fuel tax in Auckland would see 10 cents per litre added to the price of petrol and diesel, raising about $120m a year;
* An extra $3b over four years for health which includes $1.9b to sustain inflation-adjusted health costs per person;
* A tertiary reform package that sees $259.1m of operating funding over four years redirected to improve the sector;
* $238.3m of capital funding to include for the building of 14 new schools, 180 new classrooms, 10 new school gymnasiums, and modernising existing buildings;
* $133.4m for 702 extra Year 1 teachers to bring the teacher to pupil ratio down to 1:18 by the start of the second term in 2008;
* An increase in the overseas aid budget to bring it to $246m by 2010/11 which means it will rise to 0.35 per cent of gross national income (GNI);
* $72.4m towards energy efficiency intiatives including help fitting insulation and energy efficient heating into homes;
* $194.6m in operational funding and $10.2m capital costs for the second tranche of the 1000 extra cops previously announced.
* Real gross domestic product growth is expected to slow to 1.6 per cent in the March 2009 year, before increasing to around 3 per cent in the following year;
* Operating surplus at the end of the current financial year of $6.3b, up from the $5.8b forecast in December.
- NZPA
