What are the biggest changes in the New Zealand Budget in 2024?

The Minister of Finance, Hon Nicola Willis, set an operating allowance of $3.2 billion to allocate in the 2024 Budget. It was a much smaller budget than recent years, signalling a different approach by the newly elected government, led by National in a coalition with the ACT Party and New Zealand First.

Tax relief for the “squeezed middle” of New Zealand was the flagship promise of National in the run up to the election and it took centre stage in budget announcements. A four year $14.7 billion tax package was announced, offering varied levels of tax relief to all income-earning New Zealanders. To check what you could receive, you can use the Budget 2024 tax calculator at this link.

Additional announcements also covered investments in policing, healthcare and infrastructure, particularly in relation to recovery from Cyclone Gabrielle. There’s also extensions of initiatives that will be important to some businesses around the country – the Regional Economic Development & Investment Unit and the Apprenticeship Boost scheme.

Why should businesses be aware of the yearly Budget changes?

New Zealand businesses have faced a lot of challenges as inflation grows and everyone’s wallets get a little lighter. The latest Budget announcements will give many business owners an idea of what to expect from the Government in terms of legislation and practical support, as everyone seeks to weather the economic storm.

Whether you’re a small or a large business, there’s a chance that these announcements will affect you in some way – even if your industry isn’t under the spotlight.

How is the NZ Budget determined?

The Budget process is one of the cornerstones of New Zealand parliament, as an ongoing examination of the Government’s taxes and spending capacity. At the end of the tax year, the analysis so far is turned into a strategic plan for the year (or sometimes years) ahead, before being presented on Budget day – usually some time in May.

The Budget process exists so that the Government can:

• Set objectives in terms of revenue, debt repayment, expenditure and investment
• Financially plan for the year ahead and beyond
• Allocate available funds and resources to match their current strategic objectives

In terms of who is involved, all Ministers in parliament have a role in the budget process. As well as being involved in the overall strategy, Ministers work on the development of initiatives relevant to their portfolios or focus areas.

What are the sectors affected by NZ budgets?

All sectors of New Zealand can be affected by government budgets, both directly and indirectly. That includes the private sector, as well as any specific industries.

The directness of a government budget towards different sectors varies year on year. Often the announcements will single out specific sectors, such as the health sector or the construction industry, if they’re deemed a priority for government initiatives.

Even if they’re not explicitly singled out in budget announcements, certain economic measures can have a knock-on effect on all types of industries. For example, a fuel tax subsidy introduced to mitigate the population’s pain at the pump can also affect any business that relies on fuel for transport. Likewise a change to the Holidays Act or how Kiwisaver is handled will affect everybody’s payroll.

Learn about the key takeaways of this year’s Budget announcement

For a more detailed look, download our factsheet. We’ll break down the key points that will affect you – New Zealand business leaders.

If you’d like to stay up to date with the latest employment law changes in New Zealand, we post quarterly factsheets with everything you need to know. Find out more here.

Disclaimer: The information in this article is relevant as at 30 May 2024, and has been prepared by Employment Hero Pty Ltd ABN (11 160 047 709) (Employment Hero). The views expressed herein are general information only and are provided in good faith to assist employers and their employees. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article.