The 2017 budget at a glance

Economy  

• Budget surplus of $1.62 billion to June 2017
• Increase operating surplus of $2.9 billion in 2017-2018 to $7.2 billion by 2020-2021 
• Real GDP growth to average around 3 per cent over the next five years. Peak at 3.8 per cent in 2019   
• Reduce government debt to 20 per cent of GDP by 2020 which was driven up by the Christchurch earthquake and GFC 
• Highest employment rate ever - 67.1 per cent of people aged 15 years or older are working, that’s more than 2.5 million people
• By 2020-2021, it’s anticipated that unemployment will drop to 4.3 per cent with 150,000 jobs to be created, and average wages rising faster than inflation to increase a further $7,500 to $66,000.

Education

• $1.1 billion over four years for schools and early childhood centres
• $61 million in grant funding for schools and $35 million in targeted funding for early childhood centres   
• $392 million for six new schools and 305 new classrooms around New Zealand 
• 11 new special education satellite units 
• $63 million to support students with additional learning needs including more teacher aide hours and a new programme for parents and teachers of young children with autism
• Expand the number and quality of teaching graduates with specialist skills in maths, science or technology with $5.2 million of reprioritised funds to expand Teach First NZ over the next four years. 

Families and children

• Family Incomes Package start from 1 April 2018 costing $2 billion a year
• Package is made up of four parts including changes to the income tax threshold which will benefit low to middle income families 
• $424 million Ministry for Vulnerable Children, Orgna Tamariki 
• $321 million Social Investment Package which includes 14 cross-agency initiatives designed to help most vulnerable and tackle long-term issues  
• Expand Family Start, an intensive home visiting programme, and more support for children with behavioural issues, communication problems or a challenging family environment. 

Infrastructure:

• $11 billion over four years 
• $812 million to repair earthquake damaged road and rail links to Kaikoura including the State Highway 1(SH1) between Picton and Christchurch
• Auckland Housing Programme - $2.2 billion to go towards building 34,000 new houses in Auckland over the next 10 years 
• EQC (Earthquake Commission) premiums to go up by $69 each year from 1 November 2017 to replenish National Disaster Fund. 
Maori economic development:
• $93 million in new Māori Development initiatives
• $10 million to support the development of Māori tourism, and $17 million for Māori housing initiatives  
• The funding will also allow for an extra 2,500 families to access Whānau Ora, and additional support for the continued revitalisation of te reo and Māori culture.  
Trade and business:
• New Zealand’s Trade Agenda 2030 including opening new embassies in Dublin and Colombo - $134 million over four years
• $91.3 million over four years to target free trade agreements covering 90 per cent of New Zealand’s goods exports by 2030  
• Includes $35.3 million for primary industries to work on boosting value of exports and $20 million for MFAT to focus on improving market access
• $373 million in second round funding for Innovative New Zealand programme which includes $132 million for tertiary education to ensure young New Zealanders obtain the skills and $74.6 million to meeting growing demand for Growth Grants programme (research and development).
Health

• Total allocation of $3.9 billion over four years
• Pharmac to receive an extra $60 million over four years to make new medicines available and increase subsidies on existing medicines and treatments
• Over $200 million for Disability Support Services, and $38 million more in primary care
• Additional $224 million over four years for mental health services  
• 375 new emergency medical and paramedic roles will be creating over four years to ensure all emergency road ambulance call outs are double crewed by 2021 Investment to cost $59.2 million.


The 2017 New Zealand budget in more detail

Economy

The New Zealand economy has been performing strongly, supported by high levels of construction activity, exports (particularly tourism) and a growing population and low interest rates. The government has therefore increased its operating allowance to $1.8 billion embracing trade opportunities, new technologies, innovation and investment. The government says a strong and successful economy can’t be taken for granted and must be nurtured. Despite rising surpluses, the government remains focused on keeping tight control of spending so that it can pay down debt and support New Zealanders in the event of a future economic shock or natural disaster.

Education


Education continues to be a key focus area for the government with new funding pledges over the next four years. 

The teacher training programme, Teach First NZ, will receive a $5.2 million investment over four years to recruit 90 more participants who will be trained to teach STEM subjects. The graduates will be trained to teach in schools with a high proportion of Māori and Pasifika students, and students from lower socio-economic backgrounds. This is part of the government’s commitment to make the education system more responsive to the needs of learners, raise educational achievement and to improve life outcomes and employment options.  

Families and children 

The Family Incomes Package is carefully designed to assist low and middle income earners with young families and higher housing costs. The package consists of four parts and will benefit 1.3 million families, considered to be low to middle income earners, on average by $26 per week. The package consists of changes to the income tax threshold, updating the Accommodation Supplement, lifting Family Tax Credits and removing the Independent Earner Tax Credit of up to $10 a week.    

The social investment package cover areas like helping kids get a better start in life; addressing barriers to employment and independence; and reducing criminal reoffending.

The government expects an extra 1000 children, under the age of eight, will receive specialist behavioural support such as working with an educational psychologist or special education advisor to help improve their attention in class and create a less disruptive learning environment for other children.  

The package also includes $6 million over four years to support three and four year olds with oral language difficulties. Up to 1920 teachers working in early childhood education in lower socio-economic areas will be upskilled to help them better support young children showing difficulties with the building blocks of literacy, such as letter and word awareness and listening comprehension.

Extra funding to Family Start will provide intensive support to over 7,100 at-risk families at any one time, lead to higher participation in Early Childhood Education and ensure more mothers who need it can access community-based mental health services.

Health

More New Zealanders will benefit from increased funding to Pharmac with a budget of $870 million for 2017-2018. Additional funding over four years means more medicines will become available and existing medicines and treatments will be subsidised even further. Around 3.5 million New Zealanders receive a funded medicine each year.

Infrastructure 

This budget delivers an unprecedented level of infrastructure investment in New Zealand. 

Since the November earthquake, the government’s priority has been to get the community moving again by restoring the transport links to Kaikoura and its surrounding communities. The corridor is planned to reopen before the end of 2017 with funding to be provided over the next two financial years. The total cost of reinstating the road and rail corridors is now estimated to be between $1.1 and $1.33 billion. 

The government’s efforts in rebuilding earthquake ravaged communities has also been aimed at building resilience and providing support in times of hardship.  

Maori economic development


This year’s budget sees an extra $8 million go towards the Māori Housing Network which has supported 140 housing projects worth $37.5 million covering a wide spectrum of housing needs since October 2015. The $27 million package will also help more whānau live in safe, secure and healthy homes and achieve more housing independence through The Pathways to Home-Ownership program which will receive $9 million over three years.  

Trade and business

The trade and business initiatives continue to put New Zealand in a position where it can shape globalisation to its advantage. An extra $74.6 million in funding, or a total of $657.2 million is now available through the Growth Grants programme over four years to encourage high-tech innovative businesses to increase their investment in research and development and bring their products and ideas to the market sooner, which has the potential to significantly increase export revenues.

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