Accelerate Budget Special Alert 2023
accelerateonline • May 21, 2023
‘Support for today building for tomorrow’
Like the rest of the world, New Zealand has reeled from the aftermath of Covid, rising inflation and interest rates, and the cost-of-living crisis. This year we also have a massive storm damage repair bill.
The 2023 Wellbeing Budget was distinctly lacking in lolly scramble. Treasury believes we have headed off recession for this year. Inflation is predicted to fall to 4.5% by late 2023. The budget forecasts a $7.6b deficit for this year, rowing back to a $0.6b surplus next year. Growth of 3.2% is predicted to June 2023, slowing to 1.0% by June 2024.
In this special budget alert:
Accelerate - December 2023
Accelerate August 2023
Inland Revenue have recently announced this year’s livestock Herd Scheme Values and we think this is a great opportunity to update you on the latest movements. The Herd Scheme Values are the National Average Market Values, determined by a process involving a review of the livestock market as at 30 April.
The values for Dairy this year have seen a fall in values across all female classes, but increases across all male classes. The fall in R1 heifer values can be attributed to the prohibition of live export by sea commencing from 30 April 2023. For the first time the National Average Market Value for R1 Heifers is less than the National Standard Cost of breeding and rearing an R1 Heifer.
In contrast to Dairy values Beef values have increased on average 9% and are almost at record values for all classes.
Sheep values have all fallen from the high of 2022, slipping back an average of 10.2%. Whilst values have fallen, they are still either the second or third highest that they have ever been depending on which class of sheep you are looking at.
Goat values have increased on average 7.8% with almost all classes of fibre and meat producing goats at record highs. The value of milking goats continues to be well down from historic highs, except for breeding bucks which are at their highest value.
Any tax cuts, or changes to the tax thresholds were vetoed in Budget 2023 as this was viewed as worsening inflation.
Budget 2023 builds on the $889m already provided in response to this year’s storms. A further $6b is allocated for a National Resilience Plan , for rebuilding after weather events. $71b is committed to new and existing infrastructure projects: not only storm damaged communications, power and roading, but schools, hospitals, public housing, rail and road.
Most Budget 2023 changes affecting household budgets centre on younger families. The 20-hours free early childhood education (ECE) currently available to 3-5-year-olds is extended to include 2-year-olds, with more money for teachers and childcare centres as well. This may free up some parents for greater workforce participation and ease household budgets. But as interest rates remain high and measures lowering petrol prices at the pump by 25c/litre end on 30 June 2023, there is no shortage of other pressures.
