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May 29, 2016 | by  | in News Splash |
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Summing up the Budget 2016

Lots of money for old people, not so much for us.

 

Budget 2016: “Investing in a growing economy.”

If we’re to believe Bill English, the New Zealand economy is doing well with a “healthy set of books.”

The 2016 budget sees an expected surplus in 2015/2016 and 2016/2017, increasing to a forecast $6.7 billion in 2019/2020.

Net debt is expected to peak at $25.6% of GDP next year, and fall to 19.3 percent of GDP in 2020/2021.

The Treasury has forecast real GDP growth of around 2.9 per cent over the coming year, and 2.8 per cent average over the five years to June 2020.

Despite “future” surpluses, National will not fulfil their 2014 election promise of $3 million in tax cuts. English said tax cuts are a “decision for the future” due to “growing demand for public services.”

 

‘Key’ parts of the budget:

  • Innovation New Zealand—“a $761 million investment over four years in science, skills, and regional development to help grow and diversify the economy.” Money will be invested in STEM subjects at the tertiary level and will go toward funding 5,500 more apprentices by 2020.
  • Public Infrastructure—a $2.1 billion programme focused on building infrastructure such as transport, schools, as well as upgrading the Inland Revenue Department’s tax system administration.
  • Social Investment—$652.1 million over four years to support vulnerable New Zealanders. $200 million for vulnerable children; $50 million to reduce welfare dependence.  
  • Health—$2.2 billion over four years to ensure New Zealanders continue to have access to high quality healthcare. This includes $73 million for primary health care as well as a ten per cent increase on the price of tobacco on the first of January each year from 2017-2020.   
  • Housing—There has been $258 million allocated to housing; this includes funds for 750 additional places in social housing, and 3000 emergency housing places a year.  

 

What’s in it for students?

VUWSA President Jonathan Gee said “Students won’t see any day-to-day change to their living situation… The government has tinkered around the edges in trying to slow the ballooning student debt, and no real changes have been made.”

Tertiary Education Union president Sandra Grey said that the cut in tertiary funding will be borne by students and staff. “Tertiary education staff have been papering over the gaps caused by underfunding since 2009, they can’t keep making up the shortfall in funding.”

The government is investing $256.5 million in Tertiary Education, Skills, and Employment as part of the $761.4 million Innovative New Zealand program.

The government has proposed a two percent cap on the amount a tertiary education fee rises for domestic students, a reduction from the current four per cent cap.

The majority of tertiary education spending targets STEM subjects, including $86.1 million to increase tuition subsidies in science, agriculture, veterinary science, and undergraduate medicine.

$1.6 million in additional funding over four years will be directed to the Engineering to Employment program, to aid students’ transition from education to employment.

VUWSA supports the increase in STEM funding but said it should “be further extended to support all academic fields”.

The university sector will see $35 million worth of contingency funding for new innovation incentives.

$18 million will be allocated over the next two years to extend the Warm Up New Zealand Programme, a programme expected to see an additional 20,000 houses insulated. Gee said the policy “is a start, but it remains to be seen whether cash-strapped students will see the impact of this.’ Gee said.

 

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