2012 Budget highlights
May 24th, 2012 at 2:22 pm by David FarrarHere’s some of the more significant aspects of the 2012 Budget:
- Household savings rate is positive for the first time in a decade, and is forecast to increase to almost 4% by 2016
- Unemployment is forecast to drop below 5 per cent by 2015
- Forecast fiscal surplus in 2014/15 is $197 million
- Core Crown expenses to fall progressively from 33.5 per cent of GDP in 2011/12, to 30.2 per cent of GDP in 2015/16
- $385 million of new investment over four years in research, science, and innovation
- $250m from asset part-sales going towards Kiwirail
- Deferring the auto-enrolment exercise for KiwiSaver, until surplus is locked in
- Goals No 2 and 3 of 10 announced - reducing prisoner reoffending by 25% in five years and increasing the rate of participation in early childhood education to 98%, up from 94.7% currently
- $1.5 billion extra to Vote Health over four years – will include 4,000 more elective ops a year
- Tobacco excise tax to increase 10% (plus inflation) on 1 Jan 2013 and repeat for the next three years (so a real 40% increase in excise tax)
- $512 million towards new frontline education initiatives
- $104m for housing
Tags: Budget
May 24th, 2012 at 2:31 pm
“Core Crown expenses to fall progressively from 33.5 per cent of GDP in 2011/12, to 30.2 per cent of GDP in 2015/16″
is t really expenses falling? or just not increasing as the economy grows?
250 mil for kiwirail makes me sick. thanks midget.
“Tobacco excise tax to increase 10% (plus inflation) on 1 Jan 2013 and repeat for the next three years (so a real 40% increase in excise tax)”
the left will no doubt rejoice. more financial hard ship inflicted on the poor. to go with their rates increases in auckland..
Vote:May 24th, 2012 at 2:39 pm
as russell norman pointed out:
..’if you add up the increases over the budgets of this govt..you see that the middle class and the poor are being slowly boiled..
..the richest did very well out of the 2010 tax cuts…’
phillip ure@whoar.co.nz
Vote:May 24th, 2012 at 2:42 pm
Bill’s onto it.
http://www.stuff.co.nz/the-press/news/6979409/Budget-2012-Englishs-nickel-and-dime-Budget
Children will now have to pay income tax on their after-school jobs but will have a limited exemption for cash-in-hand earnings such as babysitting.
Vote:May 24th, 2012 at 2:47 pm
That’s a very sad list of ‘highlights’ especially given that the first three items are rose tinted crystal ball gazing.
When did prisoner reoffending targets become part of a budget?
What happened to being back into surplus a year earlier?
And the increase in revenue by broadening the tax base?
Vote:May 24th, 2012 at 2:52 pm
I think the policy of children paying tax on their after-school jobs is f**king STUPID.
All that will do is encourage them to give up the jobs and try to squeeze a bit more (untaxed) pocket-money out of Mum and Dad.
Anyway – what is the government going to do to non-tax-paying children? Throw them in jail?
This tax will cost more to administer than it brings in. Typical bloody stupid Bill English thinking. This is National’s equivalent to Labour’s “no GST on fruit and veges”.
What the Nats SHOULD have done was axe Working for Families. For starters, that was a Labour policy anyway, and most of those receiving it would be Labour voters, so there’d be stuff-all votes lost.
Axing WFF would have saved FAR more than taxing children’s jobs will bring in. John Key and Bill English have gone “off the edge” with this policy – they’ve completely lost the plot.
Vote:May 24th, 2012 at 2:55 pm
thor – a kid working for countdown cant really just not pay their tax.
dont kids earn $12.50 an hour or something? if so then they should be paying tax
Vote:May 24th, 2012 at 3:00 pm
God Shearer is a weak babbling speaker. Lot of piss and wind about fuck all.
” The poor are being slowly boil” blah blah blah, sick of been poor, get off your sorry arse.
Vote:May 24th, 2012 at 3:02 pm
Well said thor42.
Vote:May 24th, 2012 at 3:10 pm
What ever moron came up with the idea of removing the child tax rebate should quickly run to the top of the beehive and jump off it, before they are pushed.
Its moronic plain and simple.
The political cost, and the economic cost (of not getting children into work), far outweighs the revenue they gain from taxing kids.
I get that the rebate is a money go around, but surely they could have just had a new special tax rate of say 5% for under 18′s who are in education. Then it would be quick and easy and no need for tax returns and rebates.
Yet Key won’t touch the generous amounts given to retirees.
I now know I definately won’t vote next election, there’s no one worth voting for. National just lost my vote, and ACT will probably be dead.
Vote:May 24th, 2012 at 3:20 pm
The budget did not through up any surprises and was simply a business as usual budget without any real initiatives to stimulate growth but equally addressing the deficit so the government ends up with a surplus if its forcasts are correct in 2014.
nothing to praise or overly criticize but taxing kids ffs. I am not so sure that is a vote catcher.
If working for families goes then pressure will have to come onto wage rates as people need to be able to eat. But that said why should the tax payer be subsidising lower wage rates which is the net effect of WFF.
Axing the subsidies for kiwi saver and making the scheme compulsory would have saved the government about $500m per year which seems such a simple thing to address. Raising the retirement age to 67, now is it English and Key who are the only ones too dim to see that that is inevitable. Alternatively means test Superannuation from 65 to 70 and then have universal super only from 70. We could be back in the black much quicker if they addressed just these two issues.
Vote:May 24th, 2012 at 3:20 pm
Watching Key’s response to Shearer in Parliament – never watched him before – he is in fine form – actually funny
Vote:May 24th, 2012 at 3:24 pm
NNNOOOOOOOO!!!!!!!!!
Kiwirail is a financial dead end. The only rational owner NZ Rail has ever had, in 150 years, was Fay & Richwhite. They were the only owner with the financial acumen and the balls to say “This business does not merit any further investment, the only rational option is to run it down and then close it”.
The country might be better off if we each just took a $5 note out of our pocket and burned it.
Vote:May 24th, 2012 at 3:27 pm
@vm
12 $5 notes I am afraid
Vote:May 24th, 2012 at 3:30 pm
Gotta love it – tax cuts for the rich one budget – tax increases for the paper boy the next!
Vote:May 24th, 2012 at 3:38 pm
Watched the budget on parliment TV, all I can say is that Labour are a clueless and very rude bunch of light weights.
Vote:May 24th, 2012 at 3:41 pm
Ah but is not the donation to Kiwirail a cunning ploy to neutralize the anti asset sales lefties who also happen to be lovers of nationalized rail?
Vote:May 24th, 2012 at 3:42 pm
I have to say it’s not much of a budget but really could it have been, taxing kids takes the cake (that’s low) is that really going to help get the country back in to surplus. By the next budget Any youth trying to make a few buck by baby sitting, washing the neigbours car etc will have to be GST registered as they are self employed and have an accountant to take care of the books.
Sad.
Vote:May 24th, 2012 at 3:44 pm
Philu can still get out of working, therefore the budget entirely misses the mark. National still too scared to cut the fat where it needs to.
Vote:May 24th, 2012 at 3:54 pm
More recycling of moronic sound bites huh phil?
..the richest did very well out of the 2010 tax cuts…’
So, come on then, think for yourself – define rich. And then, richest. And then we can talk about why that statement from the green leader is crap. Do you really think people are so fucking stupid that they actually believe that shit? Or do you just judge them on your level of smarts?
Vote:May 24th, 2012 at 4:19 pm
“Core Crown expenses to fall progressively from 33.5 per cent of GDP in 2011/12, to 30.2 per cent of GDP in 2015/16″
To put this in perspective I like to compare it to body mass index.
“BMI Categories:
Underweight = <18.5
Normal weight = 18.5–24.9
Overweight = 25–29.9
Obesity = BMI of 30 or greater"
http://www.nhlbisupport.com/bmi/
Obesity, it's a huge problem.
Vote:May 24th, 2012 at 4:46 pm
And the strategy for this laudable goal? Increasing the costs for parents, of course!
That’ll work.
Vote:May 24th, 2012 at 4:50 pm
Very good Rightnow.
hmmokrightitis, don’t expect an answer. When he’s out of his depth he disappears.
Vote:May 24th, 2012 at 4:57 pm
No, the rich were paying a much greater percentage of their earnings in tax than others, and now they’re paying a much greater percentage of their earnings in tax, just slightly less so.
Look at the community wood pile. If you’re taking more wood than you’re contributing, you’ve got a cheek to call others greedy.
Vote:May 24th, 2012 at 5:00 pm
/Not counting tax dodgers, but then tax cuts didn’t apply to them!
Vote:May 24th, 2012 at 5:04 pm
All comes down to whether or not you accept capitalist economic systems as being just – and therefore whatever one makes is rightfully yours. If you accept that it is just, then all taxation is theft and progressive taxation is targeted greater theft.
Vote:May 24th, 2012 at 5:15 pm
A capitalist system depends on the rich to prosper. And on a government prepared to redistribute their earnings. Otherwise, the money-go-round simply freezes up.
That said, the best way to ease the income tax burden is to broaden the definiton of income to include all income, including unearned income (capital gains). Low tax rate, high tax take. Nicely progressive.
Simple, really.
And I see the corporate tax take is only 9% of the total tax revenue. Does anyone know how this has been trending over the previous decade?
Vote:May 24th, 2012 at 5:39 pm
You’re somewhat begging the question, since you obviously don’t believe that as an anarchist. Perhaps you can cast an alternative vision using the already introduced metaphorical community woodpile, since that is a suitably appropriate aspect of an anarchist commune.
Vote:May 24th, 2012 at 5:48 pm
“And I see the corporate tax take is only 9% of the total tax revenue. Does anyone know how this has been trending over the previous decade?”
Lazy bugger, research it yourself.
Vote:May 24th, 2012 at 5:51 pm
This.
Without question the cleanest and most simple explanation of capitalism as understood by a far-lefter, that I have ever seen.
Because the rich can just squat on their money, probably using it for a refreshing dip every morning like Scrooge McDuck – unless the People’s Representatives take it off them for redistribution throughout the general population.
Comedy Platinum.
Vote:May 24th, 2012 at 5:58 pm
Yes, a capitalist economy redistributes earnings through buying goods and services, paying wages and investment without government redistribution.
Vote:May 24th, 2012 at 6:20 pm
One thing I never understand, is why people expect budgets to hand out money like it were free.
This looks like a great budget to me.
Except, i reckon kids who do a paper round or something like that should only pay 3% tax –enough to teach them, but not enough to really deter them from their efforts.
Vote:May 24th, 2012 at 6:22 pm
Shit – so John Key is thowing 250 million away to an enterprize that no-one can make work and enforcing his socialist views on tobacco onto people who freely choose to smoke? What a C U Nxt Tuesday.
Vote:May 24th, 2012 at 6:31 pm
Not very much to say on this. It is a exactly the right budget for now.
@ thor42, sheesh I hate being around idiots. Just think about the ramifications of getting rid of working for families. Think about what benefits might arise from tax being paid on all incomes from the beginning and what life lessons this will support in children about reality. How you can even compare this policy with WFF in any logical, rhetorical or realistic sense baffles me, because it is an utterly stupid, invalid and meritless comparison. Think about the political consequences of getting rid of WFF at this particular time. Think about the practical consequences of such a measure for families. Think about the heritage of the national party, and whether this would enhance or be to the detriment of this. Think about what kids actually earn, and whether they really will simply not get a job because they are introduced to the often unfair realities of tax at a young age. Similarly to Rolla. Thor if you don’t vote out of pique, because you don’t have the capacities to actually think through political realities within policies, then you may as well vote Labour. If you don’t vote national, you are by implication voting for the left who will have it far easier under MMP. So if you want to vote Labour not out of principle but just some cretinous brainfart, why don’t you f**k off, get lost, and join the ranks of the clueless and the ignorant no hopers who make up the majority of that parties voting demographic. Get on the benefit and vote for the party that despises you, not just your views, and gives you a little money while you rot. Seriously dude your comment is so bereft of merit, it just resonates.
Vote:May 24th, 2012 at 6:50 pm
Only detail I can find is Judith Collins’ plan to “allow money saved in one justice sector agency to be used in another”.
So now, instead of just rushing to spend their budgets before EOFY so as to avoid having it cut the following year, bureaucrats will be doubly determined to spend it so as to prevent the b*****ds in the competing agency from getting their hands on it.
Better to have:
Vote:1. Identified parts of the justice system that aren’t delivering, chief amongst which would be recidivism prevention.
2. Put a nominal figure on the cost of running those under-par aspects of the system.
3. Seek proposals from within the bureaucracy, from NGOs and from private companies interested in running research based programs.
4. Pick those that look most promising and run them under contracts that pay handsomely for results (e.g. a small payment if a newly released prisoner makes it to 3 months without offending, a larger one if they make it to 6 months and so on… up to a fat bonus if they make it past 3 years, which statistics suggest means they’re unlikely to offend again).
5. Be prepared for the cost to exceed the savings identified at 2 because that will mean you’ve purchased some highly effective programs.
5. Every three years or so, start at 1.
6. Then when you’ve seen how effective alternative (to the bureaucracy, I mean, not sitting round weaving daisy chains) interventions can be, start looking at how we can save millions of dollars by using these alternatives, along with community service sentences, for all non-violent offenders, thus saving the taxpayers millions in needless imprisonment costs.
May 24th, 2012 at 7:05 pm
Gotta love it – tax cuts for the rich one budget – tax increases for the paper boy the next!
That’s based on ignorance or a lie. There will be few if any paper kids who earn more than the $2,340 exemption that’s still in place. All the change does is remove an obsolete Muldoon era tax law.
See Budget: the paper boy pinch
Vote:May 24th, 2012 at 7:15 pm
Thank you Tom. I do believe that’s the nicest thing you have ever said to me.
And I thought I would let you know I seem to be on the same page as a Nobel Prize winner in economics, one J Stiglitz.
Read his commentary here: http://www.project-syndicate.org/commentary/after-austerity. But a small extract just for you:
A long-recognized principle is that balanced expansion of taxes and spending stimulates the economy; if the program is well designed (taxes at the top, combined with spending on education), the increase in GDP and employment can be significant.
Vote:May 24th, 2012 at 8:13 pm
So National’s big plan is to tax children, take more money off sick people and sack a couple of hundred teachers, all the while hoping the CHCH earthquake rebuild finally kicks in.
The no-idea budget that didn’t even manage to lead One news.
Vote:May 24th, 2012 at 8:38 pm
I might not be the biggest fan of John Key when it comes to his left wing policies but you simply have to agree that he has become one of the houses best ever performers. The way he destroyed Shearer, Cun(t)liffe and the rest of the corrupt Labour party during the budget debate was outstanding.
Vote:May 24th, 2012 at 8:39 pm
Luc
So any muppet gatekeeper on status quo and increase taxes and spend more… that’s pretty much all Labour did for 9 years. But it always tanks a few years later and that’s another long recognized principle. Sadly one that Labour party apologists never seem to remember when they call for more taxing and spending.
Vote:May 24th, 2012 at 8:41 pm
Wonderful budget.
Nothing like teaching kids to do cashies before they grow up to be real chippies, plumbers and sparkies!
Who said trade training was fucked?
Vote:May 24th, 2012 at 11:35 pm
Personally I think the WFF policy sucks – encouraging people to have kids they can’t afford is a mind-bogglingly stupid idea, not to mention the admin required in taxing people then giving the money back to them again. I would have put through at least 10 phone calls to the IRD in the last year trying to figure out who owes who in regards to WFF.
But does National have enough majority to start dicking with this policy? It’s not like they are super-popular as it is and they would definitely drop a few points when middle-income National voters lose their $100 a week. I’d probably continue voting National but they would have no hope of claiming my wife’s vote after touching WFF.
Vote:May 25th, 2012 at 12:45 am
WorkingForFamilies cost $3.1 billion last year, it’s the second single biggest item of expenditure after National Super. Abolishing WFF would allow a personal income tax free threshold income of over $12,000+ for everyone, it would take over 25% of all taxpayers (the lowest income quartile) straight out from under IRD. I thinks that would be sellable if National had some ‘nads and made a decent fist of explaining it.
Vote:May 25th, 2012 at 7:24 am
This budget is an
Vote:anti-kids
zero-hope
budget
May 25th, 2012 at 7:41 am
HB – zero hope for the pessimism pushers. David Shearer seems to be willing everyone to leave for Australia – or at least all National voters.
In the days preceding the budget, media talked up a tight, bland, holding steady budge
Now, the media talk down a tight, bland, holding steady budget.
Well, what did you expect?
Vote:May 25th, 2012 at 9:18 am
kids are paying with larger class sizes, technology subjects being cut from intermediates and by being taxed. Try telling them its a bland, holding steady budget.
This government needs to grow some balls and up the retirement age to 67
Vote:May 25th, 2012 at 9:20 am
As I explained to my 12 year old daughter this morning – you don’t count, you don’t get to vote – that is why they don’t care about you.
Vote:May 25th, 2012 at 9:27 am
HB – it’s up to parents to care about their children. They can’t expect the Government to do everything for them, can they.
Vote:May 25th, 2012 at 12:19 pm
no shit PG
Vote:I never said that.
I do expect them to care about the education of my children though.
I do expect them to make decisions based on evidence, not ideology, no matter how ‘sensible’ it may appear to be.
May 25th, 2012 at 12:25 pm
“..All the change does is remove an obsolete Muldoon era tax law…”
tell that to the kids..
topic of conversation in schoolyards today..and ongoing..every pay-day..?
..what bastards this govt/national are..
..huge tax cuts for the richest…and a clawback on school-kids…
..it’s gotta be a fucken nadir of sorts…
..phillip ure@whoar.co.nz
Vote:May 25th, 2012 at 12:40 pm
This morning I listened to the Leader of the Opposition on the Budget.
This was
David Shearer
Dr Russel Norman
Winston Peters
Hone Hike
Guess what – they all spoke from the same songsheet. Nothing different from anyone of them, only the language used.
Vote: