Budget 2011 Announcements
Posted: 29th May 2011
Below is a brief overview of the Budget 2011 announcements:
KiwiSaver
From 1 July 2012 the Government will contribute 50 cents for
each dollar contributed by KiwiSaver members. This is the
equivalent to $10 per week.
From 1 April 2012 all employer contributions to employee
KiwiSaver accounts will be subject to Employee Superannuation
Contribution Tax (ESCT) applied at the individual's marginal tax
rate. This will therefore have a bigger impact on those on higher
marginal tax rates i.e. those with higher incomes.
From 1 April 2013 the minimum employee contribution rate will
rise from 2% to 3% for all KiwiSaver members.
From 1 April 2013 compulsory employer contributions will rise
from 2% to 3%.
The initial Government Kick-Start of $1,000 remains
unchanged.
Working for Families (WFF)
The abatement threshold will reduce to $35,000, down from
$36,827 and the abatement rate will increase to 25 cents up from 20
cents. These changes will gradually be introduced and ensure WFF is
better placed to help those families most in need.
Student Loans
Student loan eligibility will be restricted for those with an
overdue student loan repayment obligation of $500 or more and who
are in default for more than one year.
Eligibility will also be restricted for those aged over 55 to
tuition fees only.
Part-time full-year students will not be able to borrow for
course-related costs.
The inflation adjustments to the repayment threshold will be
suspended until 1 April 2015.
The repayment holiday for overseas-based borrowers will be
shortened from three years to one year. In addition, the
overseas-based borrowers will need to apply for the repayment
holiday and appoint a New Zealand-based contact person.
ACC
Future levies will be lower as a result of the cost savings
within the ACC scheme.
Christchurch
The Government is establishing a Canterbury Earthquake Recovery
Fund of initially $5.5bn to account for its share of the estimated
recovery costs. The Fund will ensure transparency and control over
the cost of rebuilding the city following the earthquakes.
The Government is creating a new Canterbury Earthquake Kiwi Bond
to give New Zealanders the opportunity to assist Christchurch by
investing in a four year maturity bond.
If you have any questions regarding the above, please call James
McQuaid on 09 308 4058 or email at james.mcquaid@tbag.co.nz