After the dramatic tax announcements in March 2021, particularly in regards to the new 39% tax rate, extension of the Brightline rules to ten years and the progressive phasing out of interest deductions for residential rentals, it was all quiet on the tax front in the 2021 Budget. The anxiously awaited definition of “new builds” as they apply to the concessionary five-year Brightline rule, together with clarification as to whether in fact new builds will still qualify for full interest deductibility, has yet to be determined.
Key Highlights –
Welfare and Families: The main benefit rates will increase by between $32 and $55 per week. The increases are to be implemented in two stages, with an immediate $20 per week per adult on 1 July 2021 and a second increase on 1 April 2022. For families with children, the main benefit increases by a further $15 per week per adult. Student living support increases by $25 per week on 1 April 2022.
Extending the Training Incentive Allowance for employment-related training.
Infrastructure spending of $57.3 billion from 2021 to 2025.
Funding for a digital skills training program for NZ small businesses, with supporting advisory services to help businesses create digital business action plans.
$200m to drive recovery in tourism.
$15m to support Maori tourism operators.
In the Health Sector, Pharmac has been allocated an extra $200m over 4 years.
