The Government’s 2021 Budget was announced today.
Below are the key takeaways:
- WELFARE AND FAMILIES: Benefits will increase by between $32 and $55 a week, while student living support will go up $25 a week. Overall, this will cost $3.3 billion over four years.
- MĀORI HOUSING: $380m for 1000 new homes for Māori, repairs for 700 Māori –owned homes; ring-fencing $350m of the $3.8b housing fund announced in March for at least 2700 Māori homes.
- INFRASTRUCTURE: An extra $15.1 billion (total $57.3b) from 2021 to 2025, including $810m for KiwiRail, $761m for school property, $700m for hospitals, and, in a surprise announcement, $306m for Scott Base.
- CLIMATE CHANGE $19.7m for future response to the Climate Change Commission’s final recommendations. Recycling revenue from the ETS will also add $3b over five years for this.
- HEALTH: Labour keeps election promises with an extra $200m for Pharmac, but back-down on free annual GP visit and eye check for Supergold cardholders as it is of “limited benefit”.
- COVID: There’s $5.1b left in the $62b Covid response and recovery fund. Treasury forecasts a “significant opening” of the border on January 1 next year.
- HOUSING PRICES: Treasury forecasts annual house price growth to peak in June (17.3 per cent) this year, stalling at 0.9 per cent next year, then edging up again to 2.5 per cent in 2025.
- JOBLESS: Unemployment is forecast to peak at 5.3 per cent in September this year, then fall to 4.4 per cent by June 2025.
- GROWING THE PIE: Economic growth expected at 2.9 per cent for this year, then to 4.4 per cent for 2023. Better-than-expected books mean the Government’s operating allowance this year is $3.8b.
- DEBT: The Government expects to borrow an extra $100b in the five years to 2025. Net core Crown debt peaking at 48 per cent of GDP in 2023. The next surplus is expected in 2027 – at 0.1 per cent of GDP.
As always, please feel free to contact us if you have any questions or would like to discuss the above information.