The Fiscal Budget 2015


At 1400 hours yesterday, the Minister of Finance Bill English delivered the seventh fiscal budget of this Government. It had both nice surprises for beneficiaries with children and nasty ones, along with some unexpected taxation. So, what did Mr English offer in the 2015 Fiscal Budget?

First, lets be clear: the books have $684 million of debt on them that is expected to last until early next year when Mr English expects a surplus to be achieved, though he said it will be only about $176 million. In other words wafer thin. And the prognosis is that the deficit could potentially linger until as long as 2018. So, on that account Mr English was totally honest.

I have to admit to being surprised to hear, after Prime Minister John Key’s comments earlier this week that hinted at no plans to try to further assist children in poverty like situations, that at the cost of N.Z.$790 million over four years, National is allowing $25 extra per week to assist solo parents. Although I was not at all surprised that behind the dangling carrot was the wooden spoon of said parents having to go back to work, training after just three years instead of waiting until children start school.

The axe fell on the $1k kick start for Kiwi Saver with immediate effect this afternoon. If you try applying for Kiwi Saver today, the account will start with no government boost.

The other big surprise today was hearing that from 01 January 2016 there will be a $22 tax on travel outside of New Zealand. Effective from that day all travellers leaving New Zealand will be expected to pay $6, and $16 for entering, or a round trip of $22 or $88 for a family of four.

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So, perhaps Mr English does have some tricks still up his sleeve. They were however not the ones I was expecting or hoping that he would pull. Credit though where it is due on beneficiary payments. The payment had not increased noticeably for several years.

But all in all, Mr English is not out of the woods yet. He failed to keep his promise of National achieving a surplus in 2014/15 and his response has been to further tighten the spending by looking for areas of social spending to cut into. None of this was lost on the Opposition in the House of Representatives today. His Government has failed to significantly address the very pressing issue of the housing market and there is little room to manoeuvre on other spending areas, such as health, education, police and so forth.

 

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