Photo: RNZ
While Finance Minister Nicola Willis promised her 2025 Budget wouldn't be a lolly-scramble, there's plenty of big changes coming.
From changes to Kiwisaver and benefits, to a tax break from businesses, a changing economic forecasts, here's some of the major announcements made on Thursday.
Big changes for KiwiSaver
The amount the government adds to Kiwisaver accounts is being halved to 25c for every dollar savers deposit, to a maximum $261 a year.
Meanwhile, the minimum contribution will go up from the current 3 percent of wages to 4 percent in two steps over the next three years.
And people earning more than $180,000 a year will receive no government contribution at all from July.
But, 16 and 17-year-olds will start getting government contributions in July (they're currently excluded), and requirements for employers to match their deposits will kick in next year.
Savings from pay equity changes and Best Start
Finance Minister Nicola Willis has revealed a controversial and last-minute change making industrial pay equity claims more difficult - and halting 33 current claims - will save the government $2.7 billion.
That's nearly half of the $5.3b of government spending that's been shaved off in this year's Budget.
From April next year, the Best Start child payment scheme will also become fully income tested in the same way the second and third years are, with payments cut off when a family earns more than $97,000 a year.
The cuts are balanced by new spending of $6.7b - mostly through increased budgets for health, education, law and order, and defence.
Businesses get a tax break
The flagship policy for the Budget will create a new rule allowing businesses to write off 20 percent of the value of new assets - like machinery, tools and equipment from their tax bill in addition to regular depreciation.
The government forecasts this could, by encouraging investment, boost GDP by 1 percent and wages by 1.5 percent over the next two decades.
Tightening of benefits for unemployed young people
In a suprise change, Social Development Minister Louise Upston has announced 18 and 19-year-olds will now have their Jobseeker and emergency benefits tested against their parent's incomes.
The policy is forecast to save the government about $163 million over four years, but the income levels parents will be tested against have not yet been decided by Cabinet.
No suruplus until 2029
Each year, a return to surplus keeps getting pushed out further.
By the govenrment's new, preferred measure (which excludes ACC and was used at December's half-year economic update) the government is expected to stay in deficit until 2028, with a narrow ($200m) surplus forecast for 2029.
However, by the measure used for every modern Budget until last year, the country would still be in deficit to the tune of $3 billion in 2029.
See our breakdown of the economy in simple charts here.
Education
The Budget puts the handbrake on annual growth in education spending as past splurges on school buildings run out in the next few years.
Despite that, spending on teaching and learning continued to grow with what the government described as a "seismic shift" in support for children with disabilities.
Education Minister Erica Stanford said new education initiatives in the Budget totalled $2.5 billion over four years, though about $614m of that total was reprioritised from "underperforming" initiatives.
The government's total spend on early on early childhood and school education would grow by roughly $400m to $19.85b in 2025-26, but drop to $19b and $18.9b in subsequent years.
The fall was partly due to the fact the $240m-a-year free school lunch programme, Ka Ora, Ka Ako, was only funded until the end of 2026, and to a $600m drop in capital funding by 2027-28 and beyond.
The Budget revealed education's worst-kept secret - the axing of a major school-clustering scheme, Kahui Ako to help bankroll the learning support increase.
Health
With many of the big ticket items already announced, it's a largely no-surprises Budget for health.
It includes a $447m boost for primary care and urgent afterhours care, and $1b of new capital spending for health infrasture.
Getting perscriptions for items for people with conditions such as asthama, diabetes and high blood pressure will get easier with a move to allow 12-month perscriptions from next month.
The overall health budget now tops $3.1b for the next year, up 4.77 percent.
Law and Order
The Police are to get almost half a billion over four years to maintain front line services, while $246m extra over four years will be spent on trying to free up the logjammed courts.
With inmate numbers forecast to hit almost 11,000 by mid 2026, the Budget puts almost $400m over four years to help meet the "population and other volume pressures".
Other changes
Most government departments have received no extra funding this year, meaning they will have to absorb any increases in costs, including wages.
Health, education, law and order, and defence are the main exceptions.
As teased, the Budget includes some targeted cost-of-living support through an increase to Working for Families abatement thresholds and rates.
The changes are expected to deliver an extra $14 a fortnight on average to about 142,000 families, most earning less than $100,000 a year.
The SuperGold card rates rebate will also be slightly expanded to provide more support for up to 66,000 more retirees. A new income abatement threshold is being added and the maximum rebate lifted from $790 to $805.
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