- Forecast GDP growth of 1.2%.
- Inflation increasing to 6.7%.
- Decrease in unemployment to 3.1%.
The Budget includes forecast GDP growth of 1.2%, inflation of 6.7% falling over time to 2.2% by June 2026, and unemployment of 3.1% growing slowly to 4.7% by June 2026. The current budget deficit (before gains and losses) is forecast to be $19 billion in the year to June 2022. A return to surplus is forecast for by June 2025.
Download the infographic in My CADownload here
Chartered Accountants ANZ highlights the key initiatives set out in the New Zealand Wellbeing Budget 2022:
1. $1.2bn towards tackling the cost of living
The Government is rolling out a target payment of $350 over 3 months to low- and middle-income earners not eligible for the Winter Energy Payment. In addition, the temporary reduction in public transport fares, fuel excise duties and road user charges will be extended by an additional two months at a cost of $365m. The Warmer Kiwi Homes programme will be extended by a year at a cost of $73m.
2. $562m for Police
This four-year funding allocation for Police includes $164.6m to expand the Tactical Response Model which trains, equips and supports existing Police. $94m will be targeted specifically at policing gangs and organised crime. The police funding will also be used to increase the number of frontline Police to meet the government’s target of one police officer for every 480 citizens.
3. $11.1bn for health reforms
This includes a funding boost of $3.1bn over two years to Health NZ to enable it to start deficit free as it takes over from the DHBs on 1 July. Additional funding of $191 over 2 years was also announced for Phamac, $166m for new ambulances, $100m towards the establishment of a new mental health and addiction service, and $76m over four years towards the national health workforce.
4. $2.9bn for climate change
The government will invest $2.9bn from its multiyear Climate Emergency Response fund in decarbonisation initiatives and initiatives aimed at increasing New Zealand’s energy independence. This includes $1.3bn to decarbonise the transport sector, $764m for immediate industrial decarbonisation initiatives, $380m funding to support the agricultural industry with decarbonisation and developing emissions mitigations, and $156m to establish native forests at scale.
5. $316m to continue existing apprenticeship schemes
The Government will continue funding the Apprenticeship Boost Scheme, Mana in Māori and Māori Trades and Training Fund for a further year.
6. $4.7bn over 5 years for infrastructure
This includes funding of $1.3bn to fund the redevelopment of Hillmorton, Whangarei and Nelson Hospitals; $777m for 280 classrooms at 40 schools; $349m for new locomotives and wagons for the national rail network; $88m for rebuilding Christchurch schools; and funding for $200m towards Auckland light rail, $349m for rolling stock for rail.
7. $100m capital for a Business Growth Fund
The new fund will provide finance to support the growth of small and medium businesses. The Business Growth Fund will mainly be funded by private banks, with the Government’s maintaining a minority shareholding with its $100m investment. The fund mirrors similar initiatives introduced in Canada and the UK.
8. $580m towards Māori health and wellbeing
To support hauora Māori health services including $168m over four years to support for Whanau Ora Commissioning Agencies to enable direct commissioning of services.
9. $264m for specific industry transformation and regional support
The Regional Strategic Partnership Fund received funding of $116m to invest in targeted local projects including broadband infrastructure. The Government also allocated $148m to support specific industries including construction, manufacturing, agritech, digital tech, forestry, wood processing, food and beverage and fisheries transformation plans.
Register for Sharing Knowledge: NZ Budget webinar and hear from our advocacy experts on what the budget will mean for you, your clients and the nation.Register now
Join the conversation
Engage with other CA members about the budgetVisit My CA
NZ Budget 2022 – The CA ANZ Scorecard
Peter Vial FCA, NZ Country Head of Chartered Accountants ANZ, eyeballs Budget 2022.