- Realistic spending decisions in tough economy
- Small businesses left with little additional support
- New Zealand tipped to avoid recession but future still uncertain
New Zealand’s Budget 2023 shows a realistic balance between current and future spending requirements, according to leading global professional accounting body CPA Australia.
“The government took a prudent approach but there was very little support for small businesses in the budget”, said CPA Australia New Zealand Country Head Rick Jones.
“These are tough times. New Zealand is facing a rising current account deficit. At the same time, costs are rising for businesses and households.
“Today’s budget shows the government tightening its belt as it promised, even though some of the fiscal and economic projections are rosier than they were in the December update.”
The Budget documents showed the Treasury’s fiscal and economic forecasts have brightened somewhat since the December update. The economy is now forecast to avoid recession.
“It’s pleasing to see a light at the end of the tunnel. Households and businesses have been doing it tough with rising costs and economic uncertainty.
“Despite this glimmer of hope, many businesses will struggle to see a path forward. Business owners should seek help from professional advisors to assist them through this difficult period.”
“We welcome the recovery provisions for the damage inflicted by Cyclone Gabrielle on businesses. Outside this recovery spending, there was little else for businesses.”
As expected, the trustee tax rate will be lifted to match the 39 per cent top personal tax rate from 1 April 2024. Treasury forecasts $1.1 billion of additional tax to be raised over the first four years. The government expects a small proportion of trusts will pay most of the additional tax.
A return to fiscal surplus is now forecast for 2025/26, a year later than predicted in December. Core Crown debt is at 19.1 per cent of GDP.
“Debt is comfortably below the Government’s 30 per cent ceiling. However, the government is clearly willing to borrow more. It’s important the government continue to take a balanced approach when making spending decisions.”
Jen Duke, External Affairs Lead, CPA Australia
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