2008 Budget
The 2008 Budget has been released – how do you feel about it?
The New Zealand government announced last week that from October 1 it will introduce tax cuts to the tune of $10.6 billion, but media rife leads us to believe many are still unsatisfied with it.
Giving the average Kiwi $16 extra in the hand each week, the tax cut program was dubbed the “Colby Budget” just hours after it was released – signifying it is merely enough to buy a block of cheese with (what is our obsession with cheese in this country?). The Christchurch Press coyly pointed out that they could not find a block of cheese at the supermarket for more than $12.55, which I found quite amusing.
All workers will benefit from the tax cuts, in particular people working on minimum wage salaries. By 2011, when the final stages of the budget are rolled out, it is estimated that there will be 300,000 taxpayers throughout the country who will no longer face the highest tax bracket: 39%, and will instead fall into the 33% category.
Remember that if you earn above any threshold, only the excess in your wages is taxed at the higher rate, not the entire amount.
Here are the details of the cuts:
| Current Rates |
New Rates based on 2008 Budget |
||
|
|
From 1 October 2008 |
From 1 April 2010 |
From 1 April 2011 |
|
15% to $9,500 |
12.5% to $14,000 |
12.5% to $17,500 |
12.5% to $20,000 |
|
21% to $38,000 |
21% to $40,000 |
21% to $40,000 |
21% to $42,500 |
|
33% to $60,000 |
33% to $70,000 |
33% to $75,000 |
33% to $80,000 |
|
39% over $60,000 |
39% over $70,000 |
39% over $75,000 |
39% over $80,000 |
Image from Flickr.
