19 May 2011

Budget 2011 main points

5:20 pm on 19 May 2011

Spending cuts to three major government schemes - KiwiSaver, Working for Families and interest-free student loans has been announced in the 2011 Budget.

Government KiwiSaver contributions will be halved, employer contributions will no longer be tax free, and employers and employees will have to boost minimum contributions from 2% to 3%.

Eligibility and payment level changes to Working For Families - about 7000 families will lose their entitlements altogether (families on higher incomes and those with children aged 16 and 17 with no younger children most likely to be affected).

People over 55 will no longer be able to borrow for living costs, and those with more than $500 overdue on their loan payments will have their lending restricted.

The Government will campaign on partial asset sales of energy state-owned enterprises Mighty River Power, Meridian, Genesis and Solid Energy, and reducing its majority shareholding in Air New Zealand.

The public sector is expected to make savings of nearly $1 billion over three years by agencies and departments paying their own superannuation costs and finding efficiencies in 'back room' operations.