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On the Level – Budget 2012- KPMG Analysis

Published: Thu 24 May 2012 05:01 PM
On the Level – Budget 2012
KPMG’s Insight And Analysis Of The Budget
The Zero Budget Overview – Ross Buckley
The return to surplus by 2014 – 15 is on target but very tight. Down from $1.3 billion to $197 million. Negligible new net spending. Health and Education are the winners overall, but smokers will pay more with excise tax rising by 10% over the rate of inflation for the next four years.
ON THE LEVEL
Agribusiness Analysis – Ian Proudfoot
The Government is waiting on the private sector to kick-start projects such as Canterbury irrigation, and appears to have left open the door to use SOE sale proceeds to fund future agribusiness innovation.
AGRIBUSINESS
The Christchurch Rebuild – Paul Kiesanowski and Alex Skinner
The rebuild is expected to contribute 1% of the economy’s 3% growth between 2012 and 2016 highlighting the importance of Christchurch to our economic recovery. However, no additional funding to the $5.5 billion set aside last year for the rebuild.
CHRISTCHURCH GATHERING PACE
The Public Sector – Adrian Wimmers
Increased funding for Health and Education but the approach is preventative - spending money to save money, as evidenced by an additional $287 million of spending on Welfare reform to deliver wider savings in this area.
IMPLICATIONS FOR ECONOMIC GROWTH GOVERNMENT EFFICIENCIES
Tax and Social Welfare – Paul Dunne
No tax surprises. The focus is on plugging holes in the tax base. Changes to tax rules will affect those with holiday homes and boats. Tightening rules around live stock valuations and the removal of some tax credits are the other changes signalled.
The IRD to get $78 million of new funding but expected to deliver over $4 for every dollar spent.
TAX SOCIAL POLICY
ENDS

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