Comment
Budget 2015 was as generally expected and reflected a centre-right government's approach to economic management.
Businesses will be broadly supportive of the Budget themes, with no radical surprises and a little more focus on targeted tax assistance.
One issue the Government has grappled with is how to ensure Working for Families is appropriately focused.
Under the Labour government's extension of the scheme, we saw what most would consider as high-income families benefiting from Working for Families.
This Budget starts to realign this by increasing entitlements as well as increasing the abatement for high-income families.
The greater work expectations of beneficiaries once the youngest child turns 3 and the increased child-care subsidies will also be seen as a positive step by many National Government supporters as it further aligns expectation on those drawing a benefit but also provides assistance (a stick and a carrot).
Businesses will, however, feel they are bearing more and more of the cost of KiwiSaver with this year's Budget signalling a stepping away from the $1000 Government kick-start subsidy.
We have seen the National Government progressively reduce its commitment to KiwiSaver first by reducing the employer rebate, taxing the employers' contribution and now by eliminating the kick-start subsidy.
Ultimately, the scheme still looks attractive to employees but most of the cost now rests on the employer.
There will, however, come a tipping point where uptake of the scheme will start to diminish and business support will fall away.
Clearly, the Government does not believe these changes will take us to that point, but time will tell.
It was also hinted that there maybe income tax cuts starting in 2017, but there is no indication of who this will be aimed at or what the cuts will be.
• Michael Turner is the tax partner at Polson Higgs.
