Key points of Budget 2023
The Minister of Finance, Hon Grant Robertson, delivered the Wellbeing Budget 2023 on Thursday, 18 May 2023.
The Budget included 3 revenue measures:
• The trustee tax rate will be raised from 33% to 39% to align it with the top personal income tax rate for the 2024–25 and later income years from 1 April 2024 for most trusts.
• From 1 July 2024, the Government will make a 3% KiwiSaver contribution to recipients of paid parental leave who make their own contribution of at least 3%.
• The Budget also reflects an increase in revenue from imposing a tax on some large multinational enterprises operating in New Zealand.
These measures will be included in an upcoming taxation Bill.
Some of the other measures included in the Budget are as follows:
Cost of living support
The Budget provides the following support:
• extending 20 hours free early childhood education to 2-year-olds from 1 March 2024
• continuing pay parity for early childhood education teachers, up to 18.6% pay increase
• an increase of 5.3% to subsidies for playcentre, kōhanga reo and home-based early childhood education services from 1 January 2024
• a one-off grant of $3 million to support the sustainability of Playcentre Aotearoa
• continuing free school lunches
• delivering 300 more classrooms and up to 4 schools
• providing free public transport for children under 13 and permanent half-price fares for under 25s
• removing the $5 prescription co-payment
• lowering household energy bills through an expanded Warmer Kiwi Homes Programme, and
• providing extra support for students in need.
Cyclone recovery
Budget 2023 builds on the $889 million already provided in the immediate response to the Auckland Anniversary floods and Cyclone Gabrielle.
Building for tomorrow
The Government has committed $71 billion across the next 5 year for new and existing infrastructure investments, in addition to funding set aside for projects that are still in the planning stage.
In addition to the existing pipeline, the Government is allocating $6 billion into a new National Resilience Plan to support medium and long-term infrastructure investment.
Science and technology
Budget 2023 positions the New Zealand economy for the future with a major investment into science, digital and horticultural technology sections. This includes:
• initiatives to help meet a government target of spending 2% of GDP on research and development
• $451 million to set up 3 research and technology hubs in Wellington
• $160 million to give video game developers a 20% rebate, aiming to help keep this growing industry in New Zealand with similar rates seen overseas
• $75 million funding for Industry Transformation Plans, including for Horticulture, Digital and Tourism, and
• providing $38 million for New Zealand to join the European Union’s Horizon Europe initiative, allowing researchers based in New Zealand to work closely with European researchers to solve global challenges, including climate change, energy and global health issues.
Public services
Through Budget 2023, the Government is making significant investments to protect and improve the critical public services. These include:
• 3,000 additional public housing places
• investing in a range of initiatives to boost skills, improve achievement, reduce class sizes, and lift teacher pay
• permanently reinstating the training incentive allowance to assist sole parents, disabled people and their carers to study, and
• continuing to focus on winter, workforce and waitlists, as well as health reforms and equity by including more than $1 billion to increase pay rates and boost staff numbers, and $20 million to lift COVID-19 immunisation and screening coverage for Māori and Pacific peoples.
Climate emergency response fund
The following measures are included in Budget 2023:
• $120 million to expand the growing network of charging hubs to underserved areas
• $300 million in new money to help accelerate private investment in low-emissions activities through New Zealand Green Investment Finance Ltd
• $50 million to improve access, affordability, and security of energy in remote, low-income, and energy-insecure communities
• $45 million to improve data on the impacts of climate change, and
• $32 million to help decarbonise energy in hard-to-abate sectors by investing in green hydrogen.
Māori and Pacific
Budget 2023 includes a range of investments to support Māori and Pacific peoples. These include:
• improving Māori housing and infrastructure
• strengthening the Whānau Ora system
• providing funding to repair 250 whānau Māori homes impacted by North Island weather events and building Māori communities’ resilience by improving their access to key climate data
• improving access to Pacific language learning resources, supporting Te Reo Māori revitalisation, boosting funding for Te Matatini and the New Zealand Māori Arts and Crafts Institute, and providing resources for vibrant Matariki celebrations, and
• providing funding to implement the Pacific Employment Action Plan, and Pacific Wellbeing Strategy, to help Pacific workers into employment and training, and build the capability of this workforce.
Source: Budget at a Glance, budget govt nz website, 19 May 2023