Kiwis shouldn't expect any changes to KiwiSaver to be
announced in Thursday's Budget despite Labour's controversial
proposals for the superannuation scheme.
Mark Lister, head of private wealth research at broker Craigs
Investment Partners, said he expected Finance Minister Bill
English to confirm a small surplus in Thursday's Budget, but
not much in the way of other lollies.
"We expect health and education to get decent mentions,"
Labour recently proposed to make the KiwiSaver compulsory and
use it to control inflation and reduce interest rate
"They (National) are happy to paint that Labour policy as
Lister said any announcement to counter it would be an
acknowledgement of the policy.
Housing could also be a surprise winner, Lister predicted.
"There could be something for housing - there could be
something that comes out of left field."
Lister said National had not dealt with the housing issue as
well as others and it was shaping up to be a big election
issue although it was something mainly driven out of
"It doesn't really affect those outside of Auckland but that
is still a third of New Zealand's population. It's not
something that can be ignored."
Geof Nightingale, a tax partner at accountants
PriceWaterhouseCoopers said tax cuts were unlikely.
"I think we are going to see some modest measures targeted at
individuals, paid parental leave, we might see some more
targeted social assistance.
"I don't think we will see anything across the board."
Nightingale said the government would probably rely on
economic growth being enough to deliver something for middle
income New Zealanders.
"It's going to be pretty boring - but I would give that a big
A boring Budget with no surprises would give certainty to the
financial markets, he said.
Nightingale said he would be looking closely at what the
government's plan was for the next three years.
"How will they keep us in surplus?"
He said a growing economy should boost the tax take and give
the government room to move.
While the tax take was lower than the government had forecast
in the latest accounts Nightingale said it was still about $4
billion ahead of last year.
Nick Tuffley, chief economist at the ASB, said the government
didn't have a lot of choices because this year's surplus was
expected to be so slim but looking ahead over the next few
years there could be something "meatier".
Tuffley said he hoped to see a focus on reducing debt.
"We have run up a bit of debt to shield ourselves from the
GFC and the Canterbury earthquakes."
While the Government had indicated it would spend around
about $1 billion extra this year and there was some potential
for reprioritisation of spending there was not much scope for
announcing big bang policies.
"You don't have a big wish list when Santa's got a big sledge
- it's a bit much to ask for a big present."
Tuffley said could be some movement to reduce red tape for
businesses to help improve productivity in the face of the
high exchange rate.
- By Tamsyn Parker of the New Zealand Herald