New Zealand Budget 2024: Business support MIA

• Welcome restraint on spending
• Little additional support for small businesses
• Return to surplus by 2028

The New Zealand government’s “darkest before dawn” Budget delivered a sensible mix of modest tax relief and government spending discipline, according to leading global professional accounting body CPA Australia.

Finance Minister Nicola Willis stuck to her pre-Budget line with “relief for today” in the form of tax bracket adjustments costing $3.7 billion per year, and worth on average $30 per week to New Zealand households.

The Treasury’s Budget Economic and Fiscal Update forecasts the government will get back into surplus by the June 2028 year, one year later than forecast in the Half-Year Economic and Fiscal Update published on 20 December 2023.

Willis said: “What is apparent now, compared to six months ago, is that the current downturn started earlier, has been deeper, and is expected to last for longer, than previously thought”.

Treasury downgraded its forecast for GDP growth to 1.7 per cent for the June 2025 year.

CPA Australia Regional Head Rick Jones welcomed the tax bracket adjustments, but said the Budget speech barely mentioned business, emphasising instead “relief for the squeezed middle”.

“While the one-off bracket adjustment is long overdue, we would support indexation so that bands are adjusted annually for average increases in wages.”

Jones said modest income tax relief would be of little help to small business owners struggling with high interest rates, still-high inflation and softening demand.

“There was nothing in this Budget to help small businesses embrace technologies that enhance efficiency and growth, a factor CPA Australia has identified as critical to our poor performance compared to Asia-Pacific peers”.

The Budget Economic and Fiscal Update, released yesterday, sees core Crown tax revenue continuing to decline in the June 2025 year.

Core government expenditure remains broadly unchanged.

Net core Crown debt is forecast to climb from $187 billion to $210 billion in the June 2028 year. 

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Nick Stride
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