On May 19 the Labour government announced the details of budget 2022, including new spending of almost $30 billion.
At the centre of the budget are initiatives to help Kiwis cope with record inflation and the rising cost of living, while the health sector and climate change initiatives also receive large investment.
But what’s in it for every day Kiwis? We’ve taken a closer look at 11 ways you could benefit from Budget 2022.
Cost of living
1. You could receive a $350 cost of living repayment
With record inflation and a runaway housing market, the cost of living in New Zealand is putting a strain on millions of Kiwis. To help, if you earn less than $70,000, the Government may provide you with a total $350 payment over three months from 1 August 2022.
The payment is estimated to support an estimated 2.1 million New Zealanders and will cost a total of $814m.
2. Getting around will remain a little cheaper until August 2022
Have you noticed your weekly grocery shop and trip to the petrol station are costing an arm and a leg lately?
The rising cost of fuel and transport has been a huge contributor to the cost of living crisis so the Government has funded a number of initiatives designed to lighten the load. That includes:
- Continuing the $0.25 a litre reduction in fuel excise duty until August 2022.
- Continuing to fund a nationwide 50% reduction in public transport fares until August 2022.
The government will also introduce a new ongoing 50% fare discount for Community Service cardholders. If you have a Community Services Card, you may be eligible for a 50% discount on standard adult fares for public transport from September 2022.
3. Groceries may get cheaper (one day)
A Commerce Commision report from March 2022 found that supermarket prices and profits were high due to insufficient competition in the sector. To increase competition, the Government has banned restrictive land covenants, which supermarkets previously used to block competitors from entering the sector.
Housing
4. First Home Loan price caps are removed
The First Home Loan scheme, which provides eligible first home buyers with low deposit loans underwritten by Kāinga Ora, will no longer have house price caps.
The house price caps for First Home Grants have also increased in many parts of the country, to reflect recent house price inflation.
If you're looking to buy your first home and meet the criteria, this may make it a little easier.
5. Transitional and public housing are getting a boost
Housing is receiving a large investment of $1.8 billion as part of Budget 2022, with funding for progressing the Homelessness Action Plan and the Affordable Housing Fund.
The extension of the Warmer Kiwi Homes fund until June 2024 will also enable give more homeowners access to grants to cut energy bills.
Health sector investment
6. The health system receives huge investment
The health system is set to receive one of its biggest ever funding boosts, with $11.1 billion in spending earmarked. Much of this will go into scrapping the local DHB system and establishing one universal system, led by Health New Zealand and Te Mana Hauora Māori (the Māori health authority).
These changes include a $100 million investment in providing specialist mental health and addiction care.
7. More medicines are being funded
PHARMAC, the government agency that decides which medicines will be funded in NZ, has received $191m in operating funding, which is designed to help them offer a wider range of medicines to all New Zealanders.
8. Dental treatment is easier to access
If you're a low income family or receive income support you may have previously been entitled to an emergency dental grant of $300.
Budget 2022 has allocated $126m to increase the emergency dental grant to $1,000.
Climate change and transport
9. Investment in low emission public transport and business
Budget 2022 includes a record investment of $2.9 billion in climate change initiatives, aiming to lower carbon emissions from transport, industry and agriculture. This includes measures to increase public transport uptake, initiatives to support a shift to zero carbon energy, and packages to help the forestry and agriculture industries lower their emissions.
10. Buying an EV may be cheaper for some
As an early trial of a new Clean Car Upgrade programme 2,500 low income families will receive assistance to purchase electric vehicles. This $69m initiative is a ‘scrap and replace’ trial, meaning that if you're eligible, you'll receive a subsidy to sell or dispose of your own car and replace it with an EV.
Disclaimer:
This Money and You Industry News, How could Budget 2022 affect you? (Industry News), is accurate at the date of publishing, 31 May 2022 and contains general information only.
This Industry News is not intended to constitute financial advice and does not take your individual circumstances and financial situation into account. We encourage you to seek assistance from a trusted financial adviser, legal or other professional advice.
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31 May 2022
