The New Zealand government has unveiled its 2024 Budget with a core election promise delivered regarding tax relief of $2.57b through bracket adjustments.
With an adjustment to income brackets, tax rates remain the same but the thresholds are raised.
Here at JBM we have been pushing for the tax brackets to be moved from the moment we started. The Government pushing inflation, then raising wages without moving tax brackets was the equivalent of theft in our opinion so we are glad there is some final movements in these brackets.
The Budget stated that 1.9 million households would benefit from the overall relief package by an average of $30 a week. Households with children would benefit by $39 a week on average.
The Independent Earner Tax Credit is being expanded, with the upper limit for eligibility rising from an income of $48,000 to $70,000, with amounts reducing from $66,000+ instead of $44,000+.
The in-work tax credit will also go up by up to $25 a week from 31 July. National had campaigned on that kicking in from 1 April. The relief package also includes a childcare payment for low-and-middle-income households as already announced. Keep an eye out for a future blog post as we will run you through how to claim this.
New Tax Thresholds
Rate | Current Threshold | New Threshold |
|---|---|---|
10.5% | Less than $14,000 | Less than $15,600 |
17.5% | $14,001 to $48,000 | $15,601 to $53,500 |
30.0% | $48,001 to $70,000 | $53,501 to $78,100 |
33.0% | $70,001 to $180,000 | $78,101 to $180,000 |
39.0% | More than $180,000 | More than $180,000 |
Other key government expenditure items in the budget include:
$155m on Independent Earner Tax Credit eligibility changes in line with National's election campaign
$182m on In-Work Working For Families Tax credit by $25 a week, in line with National's election campaign
$729m on restoring interest deductibility for residential rental property
$45m on adjusting the Brightline Test