The Government lowered the threshold for WFF payment from $36,827 to $35,000, increased the abatement rate from 20c to 25c in the dollar and aligned the family tax credit (FTC) for children 16 years and over with those aged 13 to 15.
The new payments will begin on April 1 next year. A family with two children earning $50,000 will receive an increase of $139 in a year; with three children an additional $305 and four children an extra $472. The family with one child in this wage bracket will lose $27 over the year.
A family with one child earning $70,000 will find their WFF payment falling $277 over the year; with two children, down $111. However, the family will receive a $55 increase for three children and $222 for four children.
The hardest hit are those families earning $100,000. They receive no WFF payments for one or two children, and their payment falls $320 for three children and $154 for four children over the year.
The WFF changes will save the government $448 million over the next four years - and the total cost will now reduce to $2.6 billion in 2014/15.
Under the KiwiSaver changes, the Government has reduced its yearly contribution to each plan by half to $520 from June 30 next year; the employer contribution will be taxed from April 1 next year; and from April 1, 2013, the compulsory employer contribution and the minimum employee contribution will rise from 2 to 3 per cent.
It means a worker on a salary of $50,000 will find the contribution to their KiwiSaver will fall by $470 a year; on a salary of $70,000 a reduction of $450 and on a salary of $100,000 a decrease of $510.
The additional employer contributions - $500 for a $50,000 salary, $700 for $70,000 and $1000 for $100,000 - will be cancelled out by the new tax on employer contributions and reduction in the government contribution. The initial Kick-Start payment of $1000 is unchanged.
Brian Berry, a director of Tauranga-based Rothbury Financial Services, said the WFF changes were minimal - "it doesn't do a lot for household budgets or home loan affordability".
"A two-child family earning $60,000 is getting no real change - that income is almost the starting point for raising a mortgage and buying a home around here."
He supported the move for lower income families receiving assistance ahead of those who did not really need it.
But he was surprised that employer contributions in KiwiSaver would be taxed. "The 50 per cent cut in the government contributions was foreshadowed, but now we have another new tax."
Tauranga business leaders agreed the Budget was well thought out, balanced and appropriate for the current economic situation.
Mr Berry said the Budget achieved the right things from a credit rating point of view and the overseas agencies should be satisfied. "The Government is trying to put us on a better course in the future, not just for next year."
Mr Keaney said it was a sensible Budget. "They are trying to get debt down to a comfortable level, like every household is doing. They are still investing in infrastructure, broadband, KiwiRail, roading - and that's good.
"The Government is placing a lot of confidence in growth coming out of the Christchurch re-build. They are signalling a Crown surplus (in 2014/15) a year earlier than we thought - and that will create jobs and further growth," he said.
Max Mason, Tauranga Chamber of Commerce chief executive, said the Budget was prudent and responsible.
"I do worry about the extra 1 per cent employers have to carry for KiwiSaver. The additional contribution comes in next year and, hopefully, the economy will have improved by then, so employers can afford it.
"One per cent on the wage bill is a good whack. I have a feeling most employers will not be happy but it's for the greater good. It's a lot more palatable for employers when they know the Government is cutting the deficit, and money isn't being frittered away on the state service," said Mr Mason.
He supported the move to tighten the student loan scheme.
"That's long overdue, and now students [who are overseas] have to start paying back their loans after one year instead of three years. The country is in financial trouble and everyone needs to come to the party."
