28 May 2009

Tax cuts, Super Fund on hold in NZ Budget

4:47 pm on 28 May 2009

The New Zealand Government has delivered its Budget for 2009, in which its promised tax cut programme for 2010 and 2011 has been deferred.

The Government says the worst economic circumstances since the 1930s have forced it to make some tough decisions.

Finance Minister Bill English says the tax cuts have been delayed to avoid further increase in debt and will be re-assessed on an annual basis.

The move will save the Government about $98 million next year and $494 million in 2011, rising to more than $800 million in the following years.

Automatic contributions to the New Zealand Super Fund will be suspended until the Government's books improve, at this stage predicted to be around 2020.

Mr English says the Government will make a $250 million contribution to the Super Fund next financial year to assist its guardians to find New Zealand investment opportunities.

An initial review of Government department spending has identified total savings of $2 billion over the next four years, which the Government says will be re-prioritised into other areas.