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The highs and lows of Budget 2016

Radio New Zealand

Finance Minister Bill English has delivered a budget focusing on Auckland housing, social investment and infrastructure.

Follow live updates here.

It earmarks $300 million to ease the pressure on the Auckland housing market, both providing more social housing and buying Crown land to boost supply.

Within that, there will be $200 million for more social housing in Auckland, providing at least 750 more places, and in boosting income-related rent subsidies because of rising rents.

For general Auckland housing, another $100 million will be used to free up surplus Crown land for housing developments. This continues the programme started in Auckland last year.

Children and families

The budget contains a $652 million social investment package. This includes $347.8 million over four years for the care and protection of vulnerable children and young people – made up of $199.9 million to put in place the recent overhaul of Child, Youth and Family, delivering what the government calls a child-centred approach, and $144.9 million to meet an increased demand for services from more children and young people in care.

Health

A national bowel cancer screening programme will make a start with $39.3 million over four years to begin the roll out, starting with Hutt Valley and Wairarapa District Health Boards.

This will be followed by a progressive introduction across the country. Tobacco excise duty goes up by 10% on January 1 each year for the next four years, starting in 2017, bringing the cost of a standard pack of cigarettes to an estimated $30 by 2020.

Whanau Ora will get a boost of $40 million over four years, allowing it to substantially increase the number of whanau it can support.

Education

In education, an extra $43 million will go to schools to target students most at risk of under-achieving, instead of an across-the-board increase in operations grants.

The government will spend $882.5 million to build nine new schools and 480 new classrooms around the country. In tertiary education. $123 million over four years will go into tuition subsidies at degree and sub-degree level.

Corrections

Corrections gets an extra $355.6 million over four years, of which $290 million is to make sure the department can cope with the rising prison population and $12 million is for managing offenders returning from overseas.

Police get $299.2 million in new money, of which $279.9 million is set aside for pay increases.

In the largest increase to Justice and Courts in more than a decade, the sector receives an extra $208.4 million over four years, including money for access to legal aid and community law centres, operating the Christchurch Justice and Emergency Services Precinct, and restorative justice providers.

Other initiatives

Mr English unveiled $410.5 million boost over four years for science and innovation, including almost $114 million for the new contestable Endeavour Fund.

The Marsden Fund also gets 49% boost, with extra $66 million over four years and the new Strategic Science Investment Fund gets $63 million over four years.

As signalled, Emissions Trading Scheme two-for-one subsidies will be phased out.

The budget made clear the timing, with the subsidies ending after three years, with all sectors in the ETS paying the full market price for their emissions from January 1, 2019.

The country’s spy agencies get a boost in funding, with an extra $178.7 million for SIS and GCSB over four years.

In transport investment, the SuperGold card scheme gets $40.9 million for the off-peak travel scheme which the government said was to provide certainty for the 670,000 cardholders. The New Zealand Cycle Trail gets $25 million boost. A new $100 million fund was announced to support projects to clean up rivers, lakes and aquifers.

Economy

Mr English said the economy was forecast to grow at an average 2.8% over the next five years and unemployment was set to fall gradually to 4.6% by 2020.

He said that a stronger economy was helping boost the government’s coffers, with rising surpluses predicted over the next five years.

Excluding investment gains and losses, the Treasury is forecasting $700 million surplus in each of the June 2016 and 2017 years, before rising to $2.5 billion, $5 billion and $6.7 billion in the following three years.

Some new spending has been brought forward from 2017 to recognise the pressures created from higher population, lifting this year’s allowance to $1.6 billion.

Capital spending will be reduced by $1.2 billion over the next five years to also help repay debt faster, and meet the government’s 2020 net debt target of 20% of GDP.

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Photo Caption: Bill English introducing Budget 2016 to Parliament on May 26, 2016. Parliament Photo

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