Budget 2010
The Government's Budget for 2010 was announced on Thursday May 20, 2010. Here is a summary of relevant announcements. Please use the comment box to add your feedback on the budget.
Highlights include:
Tax Cuts
All personal income tax rates will be cut from 1 October 2010.
$0 - $14,000 per year tax rate will come down from 12.5% to 10.5%
$14,001 - $48,000 cut from 21.0% to 17.5%
$48,001 - $70,000 cut from 33.0% to 30.0%
Over $70,000 cut from 38.0% to 33.0%
Company Tax
The company tax rate will fall from 30 per cent to 28 per cent from the 2011/12 income year.
Fact Sheet: Company tax cut
GST
GST will be increased from 12.5 per cent to 15 per cent from 1 October 2010.
Fact Sheet: Tax changes at a glance [PDF]
Related Link: www.taxguide.co.nz
Arts and Culture
Announcement from Minister for Arts, Culture and Heritage Christopher Finlayson.
Creative New Zealand agreed to the Government’s one-off reprioritisation of $5.5 million from its baseline funding in 2009/10.
• the New Zealand Historic Places Trust will receive a grant of $3 million to address critical repairs and maintenance to NZHPT heritage sites and buildings, improving visitor safety and tourism opportunities.
• Pukaki Trust (Rotorua) will receive $100,000 in 2010/11 to investigate options for a permanent and sustainable long term location for the carving known as Pukaki, which features on the New Zealand 20 cent coin.
• One-off additional funding of $400,000 in 2010/11 has been allocated to the Ministry for Culture and Heritage’s Cultural Diplomacy International Programme to assist Rugby World Cup initiatives.
* 2009/10 - New Zealand Film Archive will receive a grant of $2 million to address urgent film preservation needs.
Broadband
A further $248 million for the Government's broadband initiatives, as part of the $1.5 billion fibre initiative.
The Budget allocates a further $200 million of that capital funding in 2010/11 for investment in ultra-fast broadband infrastructure by Crown investment company Crown Fibre Holdings.
Announcement from Communications and Information Technology Minister Steven Joyce
Research, Science and Technology
The Government has pledged $321m for research, science and technology. The centrepiece of the funding increase is a $234 million boost for support for business research and development over four years.
This includes:
* $189.5 million over four years for technology development grants to support R&D in businesses that already do significant amounts of R&D
* $20 million over four years to trial technology transfer vouchers, to encourage links between companies and publicly-funded research organisations
* $11 million over four years to support technology transfer from research organisations to businesses and commercialisation of new products and processes
* $13.7 million over four years in contingency funding for initiatives to improve the transfer of technology from research organisations to the private sector
The other major new initiatives are:
* $25 million over four years for the Rutherford Discovery Fellowships which will support early to mid-career researchers
* $9 million over three years, starting in 2011/12 to attract top science entrepreneurial talent to New Zealand
* $44.3 million over four years in contingency funding for proposed large-scale science infrastructure, subject to Cabinet approval.
Announcement from Budget 2010 Minister and Prime Minister John Key
Tourism
The tourism industry will receive $30 million in new funding for 2010/11
Most of the new tourism funding ($25 million) will be used to increase the marketing of New Zealand as a tourism destination internationally. The other $5 million will be allocated to joint venture initiatives.
Announcement from Prime Minister and Minister of Tourism John Key
Comments
Someone of John Key’s wealth might get over $100,000 back from taxes annually under the new budget (assuming they are not already on a trust, and can generate 5% on their 50 million wealth)- paid by us. Since most of their income is reinvested they will pay little or no GST on the investment –paying less GST as a percentage than most of us. Someone on $40,000 will both get hit with a flat tax rise of GST- and if they need to borrow to make ends meet, then will then pay more GST with a higher effective GST rate. AND if the overall intake will be less, we can guarantee equal cuts in services, cuts in the arts, the end of Radio NZ etc. (It will certainly happen after an evitable "debt blowout".)
Now it is back to the future of the 90’s where NZ almost fell off the map economically and the difference between rich and poor was one of the “highest in the developed world”. (Massey Report) Meanwhile we get nothing but praise from the Herald and other “balanced” media as they scream: “Budget 2010: Experts praise tax cuts for all”! Guess who these “experts” are... the Employers and Manufacturers Association, the Business Roundtable, etc.
More: http://www.scoop.co.nz/stories/HL1005/S00216.htm http://gordoncampbell.scoop.co.nz/2010/05/25/gordon-campbell-on-the-plan... - Dr. Bill Rosenberg, CTU Economist, said: “Someone on the minimum wage of $26,520 gets an extra $4.13 a week but someone on four times the minimum wage or $106,080 gets an extra $43.08 a week. Their tax cut is 10 times more than the worker on the minimum wage.” “Even worse, someone on ten times the minimum wage gets a tax cut of $153.9...2 a week, which is around $150 more a week than the person trying to get by on the minimum wage.” The Budget has forecast annual inflation to hit 5.9 percent by March 2011, partly as a result of the rise in GST, so those on low and middle incomes will be facing even harder times by then. There are many other issues of concern in the Budget – the reduced allocation for health spending, the cuts in early childhood education and the fact that total education spending has not even kept up with the rate of inflation...." For the highest 10 percent of households, only 4 percent of their total income or 6 percent of their disposable income goes on GST" due to saving their profits. http://www.scoop.co.nz/stories/HL1005/S00216.htm http://gordoncampbell.scoop.co.nz/2010/05/25/gordon-campbell-on-the-plan... (of course Key has a "blind trust" with no talk of bold reforms on these, of course)