Benefit, tax changes kick in tomorrow

April Fool's Day will mark the implementation of a raft of Government initiatives.

Tomorrow is the beginning of the 2006/2007 financial year when many assistance programmes take effect.

Besides increases to the Working for Families package, there are changes to business tax, superannuation, student loans policy, benefits and accident compensation levies.

Finance Minister Michael Cullen said among the changes were the most comprehensive business tax cuts since the late 1980s.

The measures are estimated to cost $1.1 billion in lost revenue over the next four years.

Under the changes, fringe benefit rates on cars will fall from 24 per cent to 20 per cent and work tools such as cellphones and laptops costing less than $5000 will be exempt.

From April 1 new migrants and returning New Zealanders who have been overseas for 10 years will get a four-year tax holiday on foreign-sourced income.

Depreciation rules will change as will the threshold at which assets must be accounted for.

Superannuation and the veterans' pension will rise from 65 per cent of the net average wage to 66.12 per cent.

This means a married couple will get $12.44 more a week while singles living alone will receive an extra $8.09.

The increase takes in inflation adjustments and a New Zealand First election promise for super to be above 66 per cent of the net wage.

An inflation adjustment of 3.16 per cent kicks in for beneficiaries, but it is not all good news for recipients.

Instead of a special benefit a "temporary additional support payment" will be introduced.

People with student loans will stop paying interest on them.

ACC also changes its levies, but while it gives on one hand it takes on the other.

More than 180,000 small businesses will be able to apply for a 10 per cent discount on their levies, if they have a workplace safety plan in place

However, self-employed workers will be hit with a 10 per cent increase, taking their levies to $3.54 for every $100 of earnings.

The employers' levy remains the same but the levy on all employees increases nearly 9 per cent, to $1.16 for every $100 of earnings.

Employers also say that tomorrow will mark the beginning of a year-long headache for them.

From April 1, 2007, all employees will be entitled to a minimum four weeks' annual leave.

Employers say accounting practices mean they have to start putting money aside for it now as the cost accrues.

- NZPA