The Minister of Finance, Steven Joyce, read the Budget to Parliament this afternoon. Every government has a budget which gives details of how much money is coming in from taxes and investments, and what the government will spend it on.
This year, just like other recent years, the government has a surplus which means money left over after spending. This year’s Budget makes promises for the next four years. Some of the spending will be for infrastructure like roads, rail, hospitals, new schools and more school buildings for crowded schools. More and more immigrants are arriving in New Zealand and more infrastructure is needed. Also, the government needs to catch up on areas that have been short of money for a long time.
More money will go to families on low incomes for each child under 16. The tax threshold will be raised. The threshold is the maximum a person earns before they have to pay a higher tax rate. At the moment, someone earning less than $14,000 a year pays 10.5% tax rate, and from $14,000 the rate is 17.5%. That threshold will be raised to $22,000 a year. The threshold for middle income earners goes up from $48,000 to $52,000 a year. Anyone earning that amount will pay a tax rate of 30%. The top tax rate of 33% for those earning over $70,000 stays the same.
Those people on low incomes who get an accommodation benefit will get extra money to pay their rent. Students on a student allowance will also get extra money for their accommodation.
Some money will also go to pay off some debt. New Zealand borrows money from overseas. When the New Zealand dollar is high, it is easier to pay off debt.
There are many other promises made in the Budget but they all depend on this government continuing after the November elections. If National loses the election, the new government will make its own budget.
(Note: If you are interested in past Budgets, type budget in the search box on this page)
Vocabulary
New vocabulary (eg. budget, surplus, threshold) is defined in the text.