Since our last newsletter the Government has announced its 2012 budget; Jim Martin, UHY Haines Norton Head of Tax provided a detailed commentary on the budget which was emailed to UHY Haines Norton clients.
In summary the major initiatives announced in the budget included the following:
- The budget was primarily focussed on delivering a government operating surplus by 2014/15
- Strict controls have been imposed on government spending
- New investment over 4 years of $385mil on research science and innovation approved
- IRD given increased funding of $78mil for more compliance and audit activity
- “Future Investment Fund” established to receive proceeds from Government asset sales of up to 49% of 4 SOEs and Air New Zealand
- Infrastructure spending maintained including roading and rail network expenditure
- Tobacco excise increased by 10% over and above inflation each year for the next 4 years
- Minimal changes made to the income tax system relating to livestock and mixed use assets such as holiday homes and the removal of the low income tax credit and the childcare and housekeeper tax credit.