Across the board tax cuts which the Government says will more than compensate for an increase in GST are the main feature of Finance Minister Bill English's second budget.
A person on the average wage of $50,000 a year will get an extra $29.40 a week - a net gain of $13.70 when GST at the new rate of 15 percent is taken into account.
The gains are smaller on income below that but, according to the Government's figures, no one will be worse off.
On income above $50,000 the gains increase, and someone earning $120,000 will get an extra $89 a week and a net gain of $56.
Superannuation, all main benefits and student allowances will be lifted to offset the increase in GST.
Loopholes used by wealthy people to reduce their tax liability are being closed and those who invest in property are going to pay more tax because they won't be able to claim depreciation.
"There is compelling evidence of widespread avoidance, mostly brought about by taxpayers exploiting different tax rates,'' Mr English told Parliament in his budget speech today.
"The system lacks integrity and fairness.''
To deal with that he is levelling out income tax and the rates on trusts and other investments.
New spending is capped at $1.1 billion, with health and education getting most of it.
The Governmment's health priorities ar elective and cardiac surgery, primary care services and new equipment.
The money for education will go into operational funding for schools, new schools, and early childhood education.
Most government departments will have to get by without increases and Mr English said that situation would continue for the next few years.
The budget deficit is estimated at $8.6 billion, which is forecast to steadily decrease and turn into a surplus in 2015 _ three years ahead of last year's projection.
Mr English said it would take at least a decade of tight management to deal with the effects of the global financial crisis but he was optimistic about the way New Zealand was coming out of it.
"New Zealand has successfully navigated the worst global crisis in a generation,'' he said.
"We have changed the tax system to rebalance the economy, to put cash into people's hands and to encourage them to save more and consume less.
"We now have our debt under control and unemployment is beginning to fall.''
Mr English said there were still risks ahead.
"A mountain of debt hangs over a number of our export destinations, and will also influence the markets that lend to New Zealand,'' he said.
"We cannot take for granted the contribution the Australian and Chinese economies have made to our growth.
"However, we are on track to a position most developed economies will envy.''
