What we know about Budget 2016

What we know about Budget 2016

In the weeks leading up to today's Budget the Government has been drip-feeding what's in store, ranging from help for the homeless to tourism infrastructure and more money for Pharmac.

It's part of a deliberate plan from Finance Minister Bill English over the years to take the excitement and expectation out of Budget Day.

He says the new spending is only a "tiny proportion" of what the Government spends throughout the year.

Prime Minister John Key has also said today's Budget won't have any major surprises.

So what has the Government announced already, and what do we know will and won't be in there?

Let's take a look.

Pharmac and health

The Government drug-buying agency gets a shot in the arm, with an extra $39 million over two years which could fund a new drug to help fight against melanoma. New Zealand has the worst rates of skin cancer in the world.

More funding for research will also be made available through the Health Research Council over four years, with the Government announcing an extra $97 million.

Provisional tax

The bane of many small to medium-sized businesses, provisional tax will get a makeover. Among the changes, small businesses with a turnover of less than $5 million will be able to choose a 'pay-as-you-go' model from April 2018. Currently, businesses can get stung with interest and other penalties if they underestimate projected earnings.

Emergency housing

The Government will make its first contribution to emergency housing, with $41.1 million over four years to fund 3000 places across the country and one-off grants. Social Housing Minister Paula Bennett says the funding will continue into the future and gives homeless shelter operators more certainty in their planning.


The bourgeoning tourism sector will get $20 million to help fund much-needed infrastructure, such as toilets for freedom campers, signage and parking. Of that, $12 million will go into a fund communities can apply for with the expectation they'll match it dollar-for-dollar. The rest will go toward Tourism New Zealand to grow overseas markets, particularly the US and India.

Maori housing

The Maori Housing Network will get $12.6 million over four years to help more whanau into new homes or have repairs done. Maori Development Minister Te Ururoa Flavell says Maori are over-represented in housing depravation statistics. Since last October, the programme has helped build 42 rental homes and helped repairs for around 165 whanau, as well as infrastructure.

Anti-doping and High-Performance Sport NZ

An extra $20 million over four years will go into High-Performance Sport and Drug Free Sport NZ ahead of the Rio Olympics. Of that money, $16 million will be for High Performance Sport NZ to prepare for Rio and the Tokyo Olympics in 2020, and the rest will go to Drug Free Sport NZ.

Cycle trail

 As part of a wider $45 million tourism package, the Government has given $25 million over four years to the New Zealand Cycle Trail, which will join four trails in the South Island. Tourism Minister John Key says communities will benefit from visitors spending more time on trails and linking regional tourist destinations.

Teacher aides

A $15.6 million boost over four years will give an extra 1250 students better access to teacher aides. Students who qualify will get five hours of teacher aide assistance each week. It's part of a Government promise to provide support to an extra 4000 students with special learning needs.

Pest eradication

The Budget has gone to the birds, with $20.7 million in new operating funding for 2015/16 to fight against an expected boom in pests which threaten native wildlife. The Battle for our Birds programme will see the Department of Conservation expand pest control by 500,000 hectares, which will include aerial 1080 drops and trapping.

Cyber-security boost

New Zealand's cyber-security infrastructure gets $22.2 million in the Budget, including $20 million over four years for a national Computer Emergency Response Team to combat cyber attacks and cyber crime. The rest will be used to set the team up. It'll be part of the Ministry for Business, Innovation and Employment and be up and running by early 2017.

Fire service restructure

The fire service is in for major changes to its funding and structure, with a new overarching organisation and fire levy. It will be renamed Fire and Emergency New Zealand from mid-2017 in a $303 million revamp over five years. 

Commercialising hi-tech companies

An extra $15 million over four years will go into two schemes to help New Zealand technology get to market faster.

Sexual violence funding:

A national sexual violence service will be set up and funding will continue for some existing programmes through $46 million in Budget spending to help fix the "fragmented" system.

More apprenticeships and training

Three announcements have been made to get more young people, especially female, Maori and Pasifika students into more trades training and apprenticeships. In total, $28.6 million was pledged over four years.

More charter schools

There will be funding for up to seven more charter schools, almost doubling the existing number, which will open sometime in 2018 and 2019. An independent support entity will also be set up at a cost of $500,000.

Tax cuts

There will be no tax cuts in this year's Budget, but Mr English says the Government is still committed to them should the stars align and the right economic conditions be met -- potentially in Budget 2017.

Debt reduction

The Budget will have a focus on paying down New Zealand's net debt, with the aim of getting it from around 25 percent of GDP to 20 percent by 2020.

New money   

Part of the $2.5 billion in new spending for 2017 will instead be spent this year, with some of that money also going to debt reduction.


In a pre-Budget speech, Mr English hinted there wouldn't be a lot to address problems in the Auckland housing market, saying it's not something "extra money" can fix. He, like Reserve Bank Governor Graeme Wheeler, says he is worried about the risk of rapidly rising house prices.

Capital spending

Money used for one-off infrastructure investments will be lowered to help debt repayment.


Treasury reported a $167 million operating balance before gains and losses surplus for the nine months to March 31, which was $334 million better than forecast. Core Crown revenue was $206 million higher than predicted, while expenses were $134 million lower than thought.

Budget focus

Mr English says creating jobs, higher wages and supporting vulnerable New Zealanders through health, education, police and other public service investment will be some of the Budget's primary aims.


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