McClay urges patience on KiwiSaver for first-time farmers
We're working through it, and we'll get to it.
The Government has largely prioritised tightening spending, with Finance Minister Nicola Willis saying it secures the country's economic and fiscal recovery.
“In recent years, New Zealanders have battled a protracted period of high inflation, high interest rates and economic downturn,” Willis says. “The cost of living has soared, and the government’s books have taken a hammering, with unsustainable spending increases fuelling high levels of debt.”
Included in the budget is the establishment of the Investment Boost tax incentive, designed to encourage businesses to invest, grow and lift wages.
The policy allows for 20% of the cost of new assets to be deducted immediately from taxable income.
Kiwisaver will also experience some changes, with employer and employee default contributions increased to 4% phased in over the course of three years – the option of a 3% contribution will remain.
16 and 17-year-olds will also be eligible for the employer matched and government contributions.
The government contribution will also change, something Willis says will ensure the taxpayer cost of the scheme remains sustainable.
“The annual government contribution will be halved to 25 cents for each dollar a member contributes each year, up to a maximum of $260.72.”
Kiwisaver members with an income over $180,000 a year will no longer be eligible for the government contribution.
However, it’s health which is the big winner of the day with a $7 billion total operating funding uplift, including targeted funding to support better GP and after-hours care and funding for additional cancer treatment and other medicines.
Additionally, $1 billion in capital funding will be provided to replace and upgrade public health facilities including Nelson Hospital.
Nelson Mayor Nick Smith says the upgrade of the hospital is “awesome news”.
“Budget ’25 delivers for Nelson a new 128-bed inpatient building to be completed by 2029, the refurbishment and strengthening of the Percy Brunette and George Manson tower blocks and a new Energy Centre,” Smith says.
“This investment will enable stage two of Health NZ’s redevelopment plan and comes on top of the first stage of work already underway on an expanded emergency department, due for completion early next year. This plan is affordable and deliverable. It addresses the major issues of our shortage of beds, the poor conditions of existing wards and the earthquake strengthening.”
Meanwhile, Infrastructure New Zealand says Budget 2025 doesn’t deliver on the necessary infrastructure that would build the country's productivity.
“There’s no big bang for infrastructure, instead it signals further moves to support private sector capital investment and promises that need to be backed by future investment,” says Michelle McCormick.
“Asset management and renewal in our health system is overdue, but we know that our health infrastructure requires a lot more investment over the long-term,” says McCormick. “Today’s allocation is a good start but with no contingency funding allocated to these projects there is a lack of transparency as to where the money will go.”
