Meanwhile, the minimum contribution will go up from the current 3 percent of wages to 4 percent in two steps over the next three years.<\/p>\n
And people earning more than $180,000 a year will receive no government contribution at all from July.<\/p>\n
But, 16 and 17-year-olds will start getting government contributions in July (they are currently excluded), and requirements for employers to match their deposits will kick in next year.<\/p>\n
Savings from pay equity changes and Best Start<\/h3>\n
Willis has revealed a controversial and last-minute change\u00a0making industrial pay equity claims more difficult<\/a>\u00a0– and halting 33 current claims – will\u00a0save the government $2.7 billion<\/a>.<\/p>\n That’s nearly half of the $5.3b of government spending\u00a0that was shaved off this year’s Budget<\/a>.<\/p>\n From April next year, the\u00a0Best Start child payment scheme will also become fully income tested<\/a>\u00a0in the same way the second and third years are, with payments cut off when a family earns more than $97,000 a year.<\/p>\n The cuts are balanced by new spending of $6.7b – mostly through increased budgets for health, education, law and order and defence.<\/p>\n The flagship policy for the Budget will create a new rule allowing businesses to write off 20 percent of the value of new assets – like machinery, tools and equipment from their tax bill in addition to regular depreciation.<\/p>\n The government forecasts this could, by encouraging investment, boost GDP by 1 percent and wages by 1.5 percent over the next two decades.<\/p>\n In a surprise change, Social Development Minister Louise Upston has announced 18 and 19-year-olds will now have their Jobseeker and emergency benefits tested against their parents’ incomes.<\/p>\n The policy is forecast to save the government about $163 million over four years, but the income levels parents will be tested against have not yet been decided by Cabinet.<\/p>\n Each year, a\u00a0return to surplus keeps getting pushed out further<\/a>.<\/p>\n By the government’s new, preferred measure (which excludes ACC and was used at December’s half-year economic update) the government is expected to stay in deficit until 2028, with a narrow ($200m) surplus forecast for 2029.<\/p>\n However, by the measure used for every modern Budget until last year, the country would still be in deficit to the tune of $3 billion in 2029.<\/p>\n See our\u00a0breakdown of the economy in simple charts here<\/a>.<\/p>\n Treasury forecast this year’s deficit, using the newly introduced calculation, to the end of June would be $10.2 billion,\u00a0about $2.7 billion lower than forecasted<\/a>.<\/p>\n The deficit will peak in the coming year at $12.1 billion, nearly $2 billion more than the December forecast, with the 2027 forecast nearly double the previous forecast at $8.1 billion.<\/p>\n The Budget\u00a0puts the handbrake on annual growth in education<\/a>\u00a0spending as past splurges on school buildings run out in the next few years.<\/p>\n Despite that, spending on teaching and learning continued to grow with what the government described as a “seismic shift” in\u00a0support for children with disabilities<\/a>.<\/p>\n Education Minister Erica Stanford said new education initiatives in the Budget totalled $2.5 billion over four years, though about $614m of that total was reprioritised from “underperforming” initiatives.<\/p>\n The government’s total spend on early on early childhood and school education would\u00a0grow by roughly $400m to $19.85b in 2025-26<\/a>, but drop to $19b and $18.9b in subsequent years.<\/p>\n The fall was partly due to the fact the $240m-a-year free school lunch programme Ka Ora, Ka Ako, was only funded until the end of 2026, and to a $600m drop in capital funding by 2027-28 and beyond.<\/p>\n The Budget revealed education’s worst-kept secret – the\u00a0axing of a major school-clustering scheme<\/a>, Kahui Ako, to help bankroll the learning support increase.<\/p>\n With many of the big ticket items already announced, it’s a\u00a0largely no-surprises Budget for health<\/a>.<\/p>\n It includes a $447m boost for primary care and urgent after-hours care, and $1b of new capital spending for health infrastructure.<\/p>\n Getting prescriptions for items for people with conditions such as asthma, diabetes and high blood pressure will get easier with a move to allow 12-month prescriptions from next year.<\/p>\n The overall health budget\u00a0now tops $31b for the next year<\/a>, up 4.77 percent.<\/p>\n The police are to get almost half a billion over four years to maintain front line services, while $246m extra over four years will be spent on trying to free up the logjammed courts.<\/p>\n With inmate numbers forecast to hit almost 11,000 by mid-2026, the Budget puts almost $400m over four years to help meet the “population and other volume pressures”.<\/p>\n Most government departments have received\u00a0no extra funding this year<\/a>, meaning they will have to absorb any increases in costs, including wages.<\/p>\n Health, education, law and order and defence\u00a0are the main exceptions<\/a>.<\/p>\nBusinesses get a tax break<\/h3>\n
Tightening of benefits for unemployed young people<\/h3>\n
![\"Flourish](\"https:\/\/public.flourish.studio\/resources\/bosh.svg\")
A Flourish data visualization<\/a><\/div>\n<\/div>\nNo surplus until 2029<\/h3>\n
A Flourish data visualization<\/a><\/div>\n<\/div>\nEducation spending changes<\/h3>\n
Health has few surprises<\/h3>\n
Law and Order spending jumps<\/h3>\n
Other changes<\/h3>\n