Date posted: 19/05/2022

NZ Budget 2022 – Highlights and key measures

Chartered Accountants Australia and New Zealand brings you our highlights of the NZ Budget 2022 - 2023.

In brief

  • 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.

NZ Budget 2022

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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.

Find out more here

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.

Find out more here

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.

Find out more here

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.

Find out more here

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.

Find out more here

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.

Find out more here

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.

Find out more here

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.

Find out more here

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.

Find out more here

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