Key points from the 2010 Budget include:
•GST increases from 12.5 percent to 15 percent.
• Tax cuts; the 12.5 percent rate for income up to $14,000 drops to 10.5 percent, the rate on income up to $48,000 drops from 21 percent to 17.5 percent, and for those earning up to $70,000 the rate drops 3 percentage points to 30 percent. Higher income earners will now pay 33 cents in the dollar instead of 38.
• New spending of $1.1 billion. This was down from $1.45b last budget and is only going to increase by 2 percent from 2011-12.
• Reprioritising $1.8b over the next four years - or about $450m a year. Money was to come from tightening who gets student loans, savings on administration in health and corrections and moving underspent budgets around.
• Operating deficits expected to worsen but are improved on what was expected at last year's budget. The total Crown operating balance (before gains and losses) is forecast to be in deficit by $6.9b this year, 3.7 percent of GDP. A peak of $8.6b forecast for June 2011.
• Growth in the economy forecast to pick up, from 0.3 percent of GDP this year into positive territory for 2011 - 3.2 percent. Forecasts for the following years were fairly stable 3.1 percent in 2012, 2.0 in 2013 and 3 in 2014.
• Several clampdowns - rules for Working for Families would be reformed to ensure only those entitled got it; property owners would not be able to use losses from rental income to reduce income to gain financially, depreciation deductions won't be allowed on many business and rental properties and there would be changes to companies people set up to benefit from owning properties. Also Inland Revenue would get more to chase tax avoiders.
• Less new money for health than previous years at $488m for each of the next four years.
• Education gets $900m new money over four years plus reprioritised funds accompanied by cuts to who can offer free early childhood education hours.
• Another $1.45b in capital spending in 2010-11, the second year of a five-year infrastructure building plan. This budget's funding would focus on broadband ($248m), rail ($750m) and prisons ($337.4).
• Pre-budget announcements included tightening the tertiary education student loan system, money for Kiwirail and the Whanau Ora social policy, funding to help leaky home owners plus a significant increase for science and research.
