Zero Budget just that
It could be best described as much ado about nothing.
The Government’s Budget on Thursday has been described as “penny-pinching, paperboy” Budget where there are more losers and no winners.
Those most affected by Finance Minister Bill English's latest decisions include families, smokers, kids in paid employment, farmers and students.
While adding nothing to its overall spending, the Government is instead shuffling existing money to fund modest initiatives in health, innovation, and education.
Extra charges on prescriptions and tobacco, tightening student loans and allowances and tweaking tax rules on paper delivery kids’ incomes, boost Government’s coffers marginally.
The Labour Party said the Budget was about penny-pinching from children to make ends meet after tax credits on children’s incomes were cut.
School aged children could no longer get a tax refund if they earned wages for part-time work.
“Picking the pockets of paper boys and paper girls is petty. It’s not really addressing the big issues,” Labour leader David Shearer said.
The New Zealand Herald called it “Our big fat zero budget”.
Business commentators yesterday said while the penny pinching may be a risky move by the Government, rising debt levels were riskier.
For university students, their loan repayment rates has been increased from 10 cents to 12 cents, removing the voluntary repayment bonus and and removing allowance eligibility for post-graduate studies.
PriceWaterhouse Coopers said: The forecast turnaround in the state of the nation’s accounts is highly dependent on bullish growth forecasts between now and 2016.
The other major contributor is rigorous control over crown spending.
“We are surprised at the 29% increase in tax and GST forecast over the next four years,” PwC chairman John Shewan said.
“This is highly dependent on growth projections averaging 3% over this period.”
Clearly, the Christchurch rebuild will have a significant impact on growth. It is sobering to note though that New Zealand has not managed average annual growth rates at these levels since the early 2000s, when the domestic and global economic climates were radically different.
“The tax changes to limit the extent of deductions allowable against income from renting holiday homes does not go as far as expected,” Mr Shewan said. “It would have been reasonable to limit deductions to the actual days a property is rented but the Government has chosen not to go this far.”
The Budget reflects constraint on Government spending over the next four years. This constraint is in both core spending on departments and on transfer payments such as unemployment and domestic purpose benefits.
The standout exception to the constraint framework is superannuation. Superannuation payments are forecast to increase by 29% over the next four years relative to an increase of just 1% in other areas.
“The forecast hike in superannuation costs demonstrates the impact of the aging population,” Mr Shewan said.
“This is an elephant that will have to be addressed if we are to avoid inevitable hikes in taxes in the next few years.”
The Fiji Club of New Zealand called it a bland budget.
“National’s budget 2012 is a visionless, non-economic, over optimistic, bland and is lacking in leadership in these challenging recessionary times,” president Alton Shameem said.
“Our government is diverting attention by fiddling with so-called tax loopholes for the miniscule wealthy, when it fact it is targeting the majority that happens to be the most vulnerable in the society.
“Lower income people, workers, paper delivery boys and girls, small and medium size enterprises, self-employed, senior citizens are the hardest hit,” Mr Shameem said.
“Government should focus on growing the economy by providing incentives to the businesses, investors, manufacturers and exporters to generate the much need jobs and the expansion of their operations.
“Incentives should also be given so that people are encouraged to save and look after their families.
“The cut back on the housing scheme will hurt the workers, first home buyers, lower and middle income and ethnic people,” Mr Shameem said.
“Right Honorable Winston Peters, leader of NZ First Party, succinctly sums it up “the reason why National {led government} has brought in this Budget is because it has simply no ideas about how to deal with the situation”.
It could be best described as much ado about nothing.
The Government’s Budget on Thursday has been described as “penny-pinching, paperboy” Budget where there are more losers and no winners.
Those most affected by Finance Minister Bill English's latest decisions include families, smokers, kids in...
It could be best described as much ado about nothing.
The Government’s Budget on Thursday has been described as “penny-pinching, paperboy” Budget where there are more losers and no winners.
Those most affected by Finance Minister Bill English's latest decisions include families, smokers, kids in paid employment, farmers and students.
While adding nothing to its overall spending, the Government is instead shuffling existing money to fund modest initiatives in health, innovation, and education.
Extra charges on prescriptions and tobacco, tightening student loans and allowances and tweaking tax rules on paper delivery kids’ incomes, boost Government’s coffers marginally.
The Labour Party said the Budget was about penny-pinching from children to make ends meet after tax credits on children’s incomes were cut.
School aged children could no longer get a tax refund if they earned wages for part-time work.
“Picking the pockets of paper boys and paper girls is petty. It’s not really addressing the big issues,” Labour leader David Shearer said.
The New Zealand Herald called it “Our big fat zero budget”.
Business commentators yesterday said while the penny pinching may be a risky move by the Government, rising debt levels were riskier.
For university students, their loan repayment rates has been increased from 10 cents to 12 cents, removing the voluntary repayment bonus and and removing allowance eligibility for post-graduate studies.
PriceWaterhouse Coopers said: The forecast turnaround in the state of the nation’s accounts is highly dependent on bullish growth forecasts between now and 2016.
The other major contributor is rigorous control over crown spending.
“We are surprised at the 29% increase in tax and GST forecast over the next four years,” PwC chairman John Shewan said.
“This is highly dependent on growth projections averaging 3% over this period.”
Clearly, the Christchurch rebuild will have a significant impact on growth. It is sobering to note though that New Zealand has not managed average annual growth rates at these levels since the early 2000s, when the domestic and global economic climates were radically different.
“The tax changes to limit the extent of deductions allowable against income from renting holiday homes does not go as far as expected,” Mr Shewan said. “It would have been reasonable to limit deductions to the actual days a property is rented but the Government has chosen not to go this far.”
The Budget reflects constraint on Government spending over the next four years. This constraint is in both core spending on departments and on transfer payments such as unemployment and domestic purpose benefits.
The standout exception to the constraint framework is superannuation. Superannuation payments are forecast to increase by 29% over the next four years relative to an increase of just 1% in other areas.
“The forecast hike in superannuation costs demonstrates the impact of the aging population,” Mr Shewan said.
“This is an elephant that will have to be addressed if we are to avoid inevitable hikes in taxes in the next few years.”
The Fiji Club of New Zealand called it a bland budget.
“National’s budget 2012 is a visionless, non-economic, over optimistic, bland and is lacking in leadership in these challenging recessionary times,” president Alton Shameem said.
“Our government is diverting attention by fiddling with so-called tax loopholes for the miniscule wealthy, when it fact it is targeting the majority that happens to be the most vulnerable in the society.
“Lower income people, workers, paper delivery boys and girls, small and medium size enterprises, self-employed, senior citizens are the hardest hit,” Mr Shameem said.
“Government should focus on growing the economy by providing incentives to the businesses, investors, manufacturers and exporters to generate the much need jobs and the expansion of their operations.
“Incentives should also be given so that people are encouraged to save and look after their families.
“The cut back on the housing scheme will hurt the workers, first home buyers, lower and middle income and ethnic people,” Mr Shameem said.
“Right Honorable Winston Peters, leader of NZ First Party, succinctly sums it up “the reason why National {led government} has brought in this Budget is because it has simply no ideas about how to deal with the situation”.
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