Finance Minister Nicola Willis announced that households can expect to see an increase of up to $102 every fortnight starting July 31st.
According to Minister Willis, the passage of the bill fulfills the coalition Government’s pledge to alleviate the financial strain felt by many New Zealanders amidst a prolonged cost of living crisis. With over 3.5 million Kiwis set to benefit, the average household stands to gain approximately $32 per fortnight.
The core of the bill revolves around adjustments to the bottom three tax thresholds, along with expansions and enhancements to various tax credits. Notable changes include extending eligibility for the independent earner tax credit, augmenting the in-work tax credit, raising the minimum family tax credit, and introducing the FamilyBoost payment tailored for families with children in early childhood education.
One significant aspect of the bill is its focus on redistributing benefits towards low to middle-income working families, who have borne the brunt of escalating living costs. Minister Willis emphasised that these adjustments aim to provide targeted relief where it is needed most.
Analysis conducted by the Treasury estimates that a substantial number of households will experience tangible benefits, with over 727,000 households projected to gain at least $75 per fortnight and 187,000 households poised to receive at least $100 every fortnight.
On average, households can anticipate a boost of $60 per fortnight, while those with children will see a slightly higher increase of $78 every fortnight. Minister Willis underscored that these measures are in line with the National Party tax plan, albeit with modifications to accommodate coalition agreements.
The scheduled implementation date of July 31st allows employers and payroll providers ample time to adjust their systems accordingly, ensuring a seamless transition for all stakeholders involved. Minister Willis also reassured that the package is fully funded, thus alleviating concerns of exacerbating inflationary pressures. While some funding is sourced from revenue measures, the bulk of it stems from prudent savings initiatives.
In essence, the passing of the Taxation (Budget Measures) Bill represents a concerted effort by the Government to provide meaningful relief to New Zealanders grappling with the economic repercussions of a prolonged cost of living crisis. By targeting tax adjustments and credits towards low to middle-income families, the Government aims to foster greater financial stability and resilience within communities across the nation.
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