Budget 2018: What does it mean for Hawke's Bay?

Nick Stewart is hoping the Budget will deliver. Photo / Warren Buckland

With the coalition Government due to reveal its first Budget on Thursday, Hawke's Bay businesses will be hoping there will be money to continue the region's economic "purple patch".

And with one of Hawke's Bay's top finance experts hoping for possible changes to the KiwiSaver scheme, the region's low income earners could be on to an extra $500-a-year winner, if those pan out.

Stewart Group managing director Nick Stewart said although not detailed in Finance Minister's pre-Budget announcements, "mooted" changes to the KiwiSaver retirement scheme could have big benefits for Hawke's Bay residents.

"Personally, as a financial advisor, we are hoping that the government go back to the roots, so to speak, of the original KiwiSaver savings scheme and put back in place some of the fundamental building blocks that both the John Key-led and Bill English-led National governments removed."

Chief amongst those was National's halving of the tax-member tax credit, reducing it from $1040 to $520, a move carried out as a result of the Global Financial Crisis.

"We're now 10 years past the GFC and it still hasn't been reinstated, so that would be good to see. It would be phenomenal for savings.

"It would mean that every person that's contributing the maximum amount that's available, instead of getting an (annual) $520 free incentive from the government, it goes back to Labour's original $1040 amount, and $1040 does get people motivated to save for their retirement."

The KiwiSaver scheme and the member tax credit of $520 (Formally $1040 pre 2009) very much favours lower income earners due to the earning cap.

"As Hawke's Bay has one of the lowest wage pools in New Zealand, only above Northland and Marlborough, seeing enhancements to KiwiSaver is helpful for Hawke's Bay."

The other big win for Hawke's Bay would be the return of the scheme's original free $1000 Kickstart grant to new KiwiSaver members.

"That again was removed by John and Bill and that decimated the number of sign-up immediately. It's been mooted in the last couple of weeks that Labour would like to go back and reinforce what was started in 2007.

"That's a big one because that floats a lot of boats."

Stewart said he expected the government would stick to past statements that there would be no major tax changes until post 2020, following the findings of the Government's Tax working group.

There was nothing concerning for Hawke's Bay in what he had seen in the Finance Minister pre-budget announcements to-date.

"The bad is that we have seen some pretty serious commitments to infrastructure, which a lot of people in the community - certainly those that work in Napier and live in Hastings, and vice versa, have been disappointed to here that the four-lane expressway won't be taking place."

He added he hoped the full Budget would not put anything in place to hinder the region's economy.

"We are in a purple patch, the Hawke's Bay regional economy is flying, so to see us not nurturing that growth would be a crying shame."

Earlier this month, Finance Minister Grant Robertson announced that the rebuilding of critical public services would be at the core of Budget 2018.

The heart of that would stand on the Government's net capital investment over the next five years of $42 billion.

That would provide a boost to Health to ensure that hospitals were fit for purpose and could cope with a growing and ageing population.

Education would also get a "significant boost" to support schools, while the Government would also upgrade the transport network through the Land Transport Fund.

The Government has also already committed to lifting its Research and Development investment to 2 percent of GDP inside 10 years - a 50 per cent increase.