2017 Budget Highlights

Budget purse prised open for election year

Finance Minister Steven Joyce’s inaugural budget continues the theme of steady-as-she-goes stewardship, but was not without a sprinkle of election-year treats. Not so much an election-year lolly scramble – more a smattering of paleo snacks.
The key tax announcement is a change to the tax thresholds. Previously the tax thresholds looked like this:

Income tax bracket Tax rate
$0 – $14,000 10.5%
$14,001 – $48,000 17.5%
$48,001 – $70,000 30%
$70,000 and higher 33%

From 1 April 2018, they will look like this:

Income tax bracket Tax rate
$0 – $22,000 10.5%
$22,001 – $52,000 17.5%
$52,001 – $70,000 30%
$70,000 and higher 33%

Working for Families and the Accommodation Supplement

  • The family tax credit rates will increase from 1 April 2018. The rate for the first child aged under 16 will increase by $9 a week; the rate for each subsequent child will increase by either $18 or $27 per week, depending on the age of the child. However, the family tax credit will abate at 25c in the dollar above an income of $35,000.
  • The Independent Earner Tax Credit (which was up to $10 per week) has been removed.
  • The accommodation supplement rates (which had been unchanged since 2005) are to increase from 1 April 2018. For a two-person household this represents an increase of between $25 and $75 a week, while larger households will receive an increase of between $40 and $80 a week.
  • The accommodation benefit for eligible students will also increase by up to $20 a week.

Call for consultation on black hole expenditure

The Revenue Minister, Judith Collins, announced the release of a discussion document on feasibility expenditure which contains proposals to allow these costs to be deductible. Currently, most expenditure of this nature is neither depreciable nor deductible.