Budget 2014
Just one week has gone since Bill English laid out the current state of the economy and the plans for the coming years …
As the saying goes “beauty is in the eyes of the beholder” and that could be used to sum up Budget 2014 . You could see as it dull and boring or as a steady as she goes approach. Certainly from the results of recent polls it seems to have found favour with the NZ voters with National’s popularity on the rise.
From a business point of view, Budget 2014 only produced 3 key outcomes, two of which were signalled in last years budget and are explained in more detail in this years budget. Both are tax measures in relation to the ability to “cash up” R&D expenditure and the ability to make “black hole” R&D expenditure tax deductible which currently is not deductible nor depreciable. Both this measures will take effect from the 2015/16 income year. The third outcome was that the IRD are going to be given a further $48 million of funding specifically to bolster tax compliance activities. So reading between the lines , we can expect an increase of IRD reviews and audits, so if you don’t already have tax audit insurance you my want to consider it now. Contact Anne for a quote.
From a personal point of view, those with young children will see increases in the parental tax credit and the paid parental leave period (from 14 week to 16 weeks) as from 1 April 2015. However the rules in terms of the income thresholds and abatement rules are to be changed to better target the entitlements.
Other items mentioned were cheque duty is to be abolished from 1 July 2014, the government expects to contribute an additional $50 million for the Christchurch rebuild and ACC reductions will be looked at from 1 July 2015.
From what I have read, commentators seem positive about the direction that the economy is heading but still see interest rates rising over the rest of this year and the dollar still staying strong.