How will the latest Budget affect your business and your household? The 2023 Budget brings potential implications for Kiwi businesses, with notable changes in various areas. Trustee tax rates, early childhood education (ECE), fuel taxes, and apprenticeships are among the key areas included in the Budget. Understanding these changes is crucial for Kiwi business owners to navigate and adapt to the evolving economic environment.
Here are some of the changes most likely to have an impact on your business.
Extended free childcare hours
If you have young children, or your team members do, the extension of the ECE subsidy to include two-year-olds will be welcome news. This should make it easier for some parents or grandparents to re-enter the work force. Additionally, businesses in this sector will also feel the benefits.
Higher trustee tax rate
The trustee tax rate is now aligned with the tax rate for the highest income bracket, at 39%, up from its previous rate of 33%. Consequently this may mean a higher tax burden for trusts, but it might also take some of the accounting complexity out of trusts.
Fuel tax is reinstated, more EV infrastructure
The 25c per litre fuel excise duty was reduced last year, but it will be reinstated on 30 June. This is likely to have an immediate effect on petrol and diesel prices, which may increase your personal and business transport costs. On the other hand, for EV owners the news is more positive. The $120 million investment in EV charging infrastructure will make it easier to charge up as you drive around New Zealand. In addition, the government has also announced that public transport will be free for children under 13 years old and half price for under 25s.
Boost for construction and peripheral industries
The extended Warmer Kiwi Homes programme will help make more homes warm and dry, and provide a workstream for businesses in this sector. Those in building and construction will also welcome the investment into 3,000 new homes and new infrastructure.
Extended free apprenticeship scheme
The Apprenticeship Boost programme will enable around 30,000 apprentices to keep receiving support. If your business can participate, this may help you find young workers and help them train.
Investment in tourism, horticulture and the digital sector
For businesses involved in one of these sectors, there is investment designed to support economic resilience. Industry Transformation Plans will include training in digital skills and accreditation for tourism employers. For instance, there is a 20% rebate for the game-development sector to help grow and protect New Zealand’s domestic game-development sector. This will be available for eligible businesses who spend a minimum of $250,000 each year.
Free prescriptions
All Kiwis can now get free prescriptions – and that $5 saving all adds up for you and your employees.
No longer forecasting a recession
Treasury is now forecasting slight growth in the economy for the first quarter of 2023. This is an improved outlook compared to the previous recessionary forecast. That’s no guarantee, but avoiding a recession would give consumers and businesses more confidence heading into winter.
Questions about how this could impact you?
If you want to read the full budget summary you can find it here. You might wondering about how the new trust tax rate, or the Apprenticeship Boost scheme, or anything else in the Budget, will affect your business or finances, and our experienced Business Advisors are here to assist you.
Please feel free to contact our dedicated advisors today to discuss the changes introduced in the 2023 Budget, and explore the options available to maximize your business’s potential.
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