The Budget

Today, the Minister of Finance, Bill English, read the Budget in Parliament. The Budget is a plan of how much money the government has and how the government will spend it. For the last few weeks, Bill English has told us some of the things that would be in the Budget so there were not too many surprises. We knew that the tax cuts that National had promised, would probably not happen so we were not surprised to hear that they will be delayed until some time in the future. We knew that the government had less money than last year so there is not much extra spending.

We knew that the government would probably stop putting money into the Superannuation Fund. Usually the government puts $2 billion into that fund every year. We didn’t know they will stop this for about 10 years. People aged 65 and over will still get their New Zealand Superannuation but in the future there may be changes. The government could increase the age to 67 or cut the amount of money people receive for Superannuation in the future. At the moment, people on Superannuation get two thirds of the average wage.

The Budget did not make cuts to Social Welfare benefits. This was a surprise. However, we knew that the government did not plan to cut money for Health or Education but the increases in these areas are smaller than usual. Universities will find it hard as there is not enough money for the extra students who are studying this year but there is money for training 200 more doctors at the two medical schools.

There will also be more police. There is money for about 600 more police. There will also be money for insulating 180,000 older homes to make them warmer. This should help to keep people healthier because cold homes make people sick. We knew about more money for roads and the cycle tracks that the Prime Minister promised.

This Budget has very little extra spending because the government was worried about our credit rating from the international agency Standard and Poors. If we have a poor credit rating, the government has to pay more interest on money they borrow. The government has to borrow more than $7 billion but our credit rating looks good. Other countries which lend us money will see this as a stable government.






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