The Government announced today a Family Incomes Package to support New Zealand families, giving families more after-tax income to spend on goods and services in the coming years.
Tax thresholds have been static for many years, but will now move sharply upwards. The lowest income tax threshold will move from $14,000 to $22,000, and the $48,000 threshold will shift up to $52,000.
“This will put between $1,000 and $2,000 a year back into most earning households,” explained PwC Partner and Budget Leader Richard Forgan.
“The Government has reaped the benefit of ‘bracket creep’ for many years, and it is good to see this somewhat rectified.”
While all tax-payers will benefit, combined with changes to Working for Families, the impact will be most felt by those on lower incomes. More generally, the flow-on of income into consumer spending will strongly support growth and businesses over the next few years.
“Budget 2017 hasn’t offered a lot for small businesses. The challenge for the country’s businesses is to make the most of growing consumer spending if they also want to reap the benefits of this year’s Budget,” said Mr Forgan.