Budget 2017 spread firmly across middle and lower income New Zealand
Fiscal headroom from material surpluses provides an opportunity for Government in an election year

Deloitte CEO Thomas Pippos says that Budget 2017 looks to cement the current Government even more firmly across middle and lower New Zealand.

Mr Pippos says that the fiscal headroom provided by material and growing surpluses has afforded the Government an opportunity to provide something for everyone in Minister Joyce’s first Budget.

“Compared to many other countries, most notably the United Kingdom, Australia and the United States, New Zealand is in an enviable position able to invest its initiatives around its Family Income Package, Infrastructure, Social Investment, Public Services, Growing Economy package, while reducing debt as a percentage of GDP,” says Mr Pippos.

“Today’s Budget is a marker in a journey rather than a destination in itself. The new team of English and Joyce has used it to start to re-set the agenda in a predicable way. Before Kiwis go to the polls in September, they have a further opportunity to restate the destination which they will inevitably take.”

Mr Pippos saw the Budget as about crowding out others, looking to provide material cash and services dividends to the masses, with equally material social cohesion and economic resilience dividends to businesses and those further up the food chain.

“It’s about standing back and looking at the total picture. At a simplistic level, business nirvana may include lower corporate tax rates that mirror global trends, but social cohesion and resilience was the dividend they were offered today,” says Mr Pippos.

“There is no doubt however, that with the passage of time and assuming we don’t face future shocks, that all tax rates will be heading down under the current Government. It’s just maths” he said.

Deloitte’s team of experts look at today’s Budget announcement, particularly how it supports resilience and helps New Zealand shape its place in an increasingly uncertain world.

For Deloitte’s full Budget 2017 commentary and analysis go to www.deloitte.com/nz/2017budget.

© Scoop Media