Aotearoa New Zealand's Budget 2024 was delivered on 30 May by the Minister of Finance, Hon Nicola Willis.
Budget 2024 delivers on the government's promised tax cuts and reductions in spending across the government. But what's in Budget 2024 for DSPs? Below, we'll walk you through our Budget takeaways and associated impacts on DSPs.
Members will have already received access to our full Budget breakdown spreadsheet.
Our Key Budget Takeaways
Tax Changes
Budget 2024 will deliver $14.7 billion back to New Zealanders, funded through new revenue measures and savings across the government. The government's tax plan includes:
- $10.3 billion on adjusting the personal income tax brackets from 31 July and increasing the Independent Earner Tax Credit eligibility.
- $2.9 billion on restoring interest deductibility for residential rental property.
- $746 million on introducing the FamilyBoost payment for Early Childhood Education costs from 1 July.
- $620 million on increasing the In-Work Working for Families tax credit.
- $180 million on adjusting the bright-line test.
One initiative expected to raise $586 million is the government's investment in Inland Revenue's Tax Compliance Activities. Within the Budget, it notes that one of these activities is increasing the rate charged on overseas-based borrowers' student loans and for late repayments.
The government also expects to raise $4.7 million to support the Insolvency and Trustee Services funding through a levy on all companies as part of their annual returns.
While payroll and tax software providers will be kept busy accommodating these changes, there will be significant impacts for payroll
providers as they operationalise the personal income tax thresholds by 31 July.
Compliance and Regulation
Following election promises, Budget 2024 provides funding to establish and operate the Ministry for Regulation, led by Minister David Seymour. The funding for the new Ministry will be partly provided through shutting down the Productivity Commission.
We're yet to see the full details for the Ministry for Regulation. However, it is expected to undertake regulatory sector reviews, ensure compliance with new regulatory principles, and provide quality assurance of regulatory impact statements.
The Budget also provides funding for developing and administrating a Crypto-asset Reporting Framework, which will follow the OECD's
standard to ensure tax administrators have sufficient information to enforce tax laws on taxpayers who derive income from trading
crypto assets.
Reduced Government Spending
Throughout Budget 2024, there are many initiatives to reduce spending on low-value programs and non-essential back-office functions and to reduce staff in some departments.
We expect this reduced spending will affect many departments' capacity for change over the next few years and may lead to
service changes.
What does Budget 2024 mean for DSPs?
Tax and payroll software providers will be kept busy as they make the government's tax changes available in their products and services.
The reduced government spending and cuts to private sector employees come at an interesting time, with DSPs expecting investments in the tax and social policy ecosystem as Inland Revenue follows OECD tax administration 3.0 concepts.
With many departments operating on reduced budgets, we'll likely have more clarity on the full impacts on different teams and projects over the next few months.
DSPANZ looks forward to working with our members and government to enable these Budget initiatives.