The Budget can seem boring and overwhelming, so Re: News’ Mandy Te and Anna Harcourt went along to the Parliament lock-up to break it down for you.
Prime Minister Chris Hipkins says it’s a “no-frills budget that befits the times and makes targeted investments where they are needed most”.
Here’s the key things you need to know:
- Half-price public transport for under-25s
- No more paying a $5 fee when you get a prescription
- Funding boost for Te Matatini and Matariki
- 100,000 more houses will be insulated
- 20% tax refund for video game developers
- Treasury says we will avoid a recession ?
WHAT’S NOT HAPPENING: NO TAX CUTS AND NO GROCERY DISCOUNT
There are no tax cuts: Prime Minister Chris Hipkins says tax cuts would make current inflation worse.
“This package addresses the immediate cost of living challenge households face without exacerbating inflation pressures, as tax cuts would.”
He says today’s Budget focusses on the “bread and butter” issues households are facing.
No changes to GST on food: Finance Minister Grant Robertson says removing GST off groceries wasn’t considered as it would be a “very indirect way of supporting low and middle-income New Zealanders”.
He says the Budget needed to focus on initiatives that would not increase inflation.
Instead he says initiatives like removing prescription fees, expanding early childhood education and reducing public transport fees for young people “will genuinely ease the pressure”.
A role called the Grocery Commissioner will be established, to help lead the Commerce Commission’s monitoring of New Zealand’s grocery industry and undertake and enforce anticipated legislation regulating the Grocery Industry. ($28.837 million over four years.)
COST OF LIVING
The cost of living measures are:
- Free public transport for kids and half-price for under 25s
- Free early childcare education will now include two-year olds (previously it was only available for three to five years olds)
- Free prescriptions: no more $5 co-payment
HALF PRICE PUBLIC TRANSPORT FOR UNDER 25s
People under 25 will get half-price fares on public transport and children under 13 will get to use public transport for free from July.
This half-price fare also includes Community Service Card holders and Total Mobility Users.
In a statement, Prime Minister Chris Hipkins says this will help over 1.6 million New Zealanders.
Bus driver pay rise: New Zealand’s public transport has not been super reliable over the past year so the Government is using the Budget to enable public transport authorities to raise the base wage rate for urban drivers to $30 and $28 for regional bus drivers.
The Government is also using the Budget to help introduce split shift allowances of $30 per split shift and penal rates for those working after 9pm.
Hipkins says “this delivers an average 58% increase to bus drivers pay since we took office”.
SCRAPPING PRESCRIPTION FEE
Removing $5 prescription charges: they estimate this will impact three million people.
In a statement, Minister of Health Dr Ayesha Verrall says removing this charge would make it easier and cheaper for New Zealanders to access the medicines they need and would have an extra impact on people who have multiple prescriptions to fill on a regular basis.
Verrall says this would benefit almost 770,000 New Zealanders over 65 who received prescription medicines last year.
“As a doctor, there were times when my patients did not collect their medication, and in fact we know more than 135,000 adults did not collect their prescription because of cost in 2021-2022.”
($618.6 million over four years.)
TE MATATINI AND MATARIKI
Funding for kapa haka festival Te Matatini: to help expand the festival and fund a rohe-based kapa haka network.
“Te Matatini is more than just an event that takes place every two years. It is a reason for Māori to connect to their culture and support their wellbeing,” says associate minister for Arts, Culture and Heritage Willow-Jean Prime in a statement.
($32 million over two years.)
Matariki celebration fund: An $18m fund that communities can apply for.
“The aim is to see expanded public awareness and understanding of Matariki through more resources, practices and customs on a national scale,” says Prime Minister Chris Hipkins.
($18 million over four years.)
GAMING AND TECH
20% tax refund for video game developers: game studios will be able to get a tax refund of up to $3m a year.
The Government wants to invest in our tech sector so we become more like Japan or Germany, aiming to move our focus away from farming and towards low-emission, high-wage tech jobs.
Last year our video game industry made more than $400m, and our digital tech sector grew grown at twice the rate of the rest of our economy.
CLIMATE: ELECTRIC VEHICLES, NATIONAL RESILIENCE PLAN FOR CLIMATE WEATHER EVENTS
More electric vehicle charging stations: all towns of 2000+ people will get EV chargers.
The Government is aiming to have EV charging hubs every 150km to 200km on main highways.
Cars are the largest source of transport emissions in New Zealand, and the Government is aiming for more people to switch to EVs.
($120m over four years.)
National Resilience Plan to help recover from weather events: to rebuild after Cyclone Gabrielle and the Auckland floods, and to protect from future weather events.
HOUSING AND POWER BILLS: 3000 MORE PUBLIC HOUSING PLACES, 100,000 MORE HOUSES INSULATED AND HEATED
3000 more public homes: the Government says these will be built by June 2025, on top of the 14,000 already funded.
They will also add an extra 80 housing places for homeless young people.
100,000 more houses will get insulation and better heating over the next four years: through expanding the Warmer Kiwi Homes programme.
This is predicted to help reduce electricity use by 16% in those homes.
Five million LED lights: the Government will subsidise LED lights, saying switching to LED lights can save a household $100 a year.
($402.6 million over four years.)
ECONOMY: TREASURY SAYS WE WILL AVOID A RECESSION
The Government is predicting:
- Inflation will fall to 1-3% by next year. It’s currently at over 6%
- Economy will grow by 3.2% this financial year
- Unemployment will hit a peak at 5.3% next year
Boost for Alternative Education: a programme that helps support students re-engage in learning.
($41 million over five years.)
Extend 20 hours free Early Childhood Education to two-year-olds: from March 1 2024.
($1.2 billion over four years)
There will also be an increase of 5.3% to subsidies for play centre, kōhanga reo and home-based Early Childhood Education services.
This means these places will be able to meet rising costs and reduce fees for parents and caregivers, Associate Education Minister Jo Luxton says.
Boost for kaupapa Māori and Māori schooling: The Government will invest directly into Māori education – this includes more building being built and and modernised, as well as more learning support.
Online resource hub and public information campaign to create a new platform for Pacific language learners and speakers: providing them with resources to help them on their language journey.
($4.1 million as part of $13.3 million plan to implement the Pacific Languages Strategy)
This is part of their $46 million Budget 2023 Pacific Package, which is also going towards introducing a Pacific Community Wellbeing and Resilience Fund and a programme that aims to enhance employment and education pathways for Pacific people.
Ending the Minimum Wage Exemption: currently disabled people are paid less than minimum wage. The Government wants to end this by mid-2025.
Minister for Disability Issues Priyanca Radakrishnan says “this unfair exemption currently affects about 800 disabled people who are legally able to be paid less on the basis they’re perceived to be less productive”.
“We will start work on this immediately,” she says.
How this will be done: A wage supplement to support businesses to employ disabled New Zealanders - this will cost $27.3 million total operating and $10 million total capital.
Through the Budget, the Government is also providing $863.6 million to “help ease cost pressures” on disability support services, Radhakrishnan says.
As well as the funding for Te Matatini and Matariki:
- $225m for Māori education: for investment in buildings and learning support at kura kaupapa and Māori medium schools
- $10m for Aotearoa New Zealand histories curriculum: for 57 more iwi to develop local content for schools and kura
- $200m for Māori housing initiatives
- $8m for the Māori tourism industry
- $51m for Māori media
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