There's been a largely positive reaction to tax changes announced in today's Budget.

The Government today unveiled what it called the biggest overhaul to the New Zealand tax system in 25 years.

All personal tax rates will be cut from October 1, GST is being raised to 15pc, company tax will be cut next year and loopholes favouring property investment are being closed.

And it's promising the "vast majority" of New Zealanders will be better off as a result.

Managing tax partner at Deloitte, Thomas Pippos said many of the changes were a huge step forward and would encourage economic growth.

"Ultimately, we needed something that would put more money in people's pockets but also give them an incentive to save more and spend less."

Institute of Chartered Accountants Institute tax director Craig Macalister said Finance Minister Bill Bill English had come up with a tax package "that almost looks like white rabbits out of the hat".

It had not seemed possible to produce a tax package to please everyone, but Mr English came close, and may have reignited the economy in the process, Macalister said.

"A lot of people will be quite happy with it. We might see a bit of confidence return to the economy."

Tax savings for all

A "typical family" - with two children and an average household income of $76,000 will be about $25 a week better off, said Mr English.

A person on the average annual wage of around $50,000 will get an income tax cut of about $29 a week. After the GST increase is taken into account, this will fall to an extra $15 a week, if they pay an average rent or mortgage.

Budget's key points:

- GST increases from 12.5pc to 15pc

- Company tax rates fall from 30pc to 28pc

- All income tax brackets fall, with the top rate levied on income over $70,000 per year coming down from 38pc to 33pc.

- Landlords and businesses will no longer be able to claim depreciation on buildings that are expected to increase in value.

- Rules around 'loss attributing qualifying companies' often used by property investors to reduce their tax payments are being tightened.

- All benefits including NZ Super and working for families will increase by 2.02pc to compensate for the increase in GST

- An extra $2.1bn is being spent on health over the next four years, which includes $1.7bn of new operating funding.

- Funding for schools is going up by $1.4bn over the next four years, which includes $350m in new operating and capital funding for school property.

Changes encourage Kiwis to work

ASB economist Chris Tennet-Brown said individuals would be better off - but only if they avoided using the extra money in their pockets on goods made more expensive by the GST rise.

"It might look like a shifting of deck chairs, from income tax to consumption tax ... but it's a pretty hefty set of reforms."

The economy would be tilted to encourage working rather than debt, Mr Tennet-Brown said.

"There's quite a lot in there. It's the biggest set of changes since the Labour Government brought out Kiwisaver," Mr Tennet-Brown said.

Move away from property investment

Changes to the tax treatment of investment property invited a behaviour change by New Zealanders away from investing in property to investing more in New Zealand and productive activity, said Auckland Chamber of Commerce chief executive Michael Barnett.

"If we achieve just that from this budget it will represent a game change we have needed for decades."

It was the fairest budget in more than a decade, Employers and Manufacturers Association chief executive Alasdair Thompson said.

Investment Savings and Insurance Association (ISI) chief executive Vance Arkinstall welcomed the tax changes, saying it was a step in the right direction, creating a platform for greater savings by New Zealanders.

As far as the Goverment's books go, the tax reforms are broadly neutral, with the increased money raised from the GST hike and property changes matching the cut in revenue from the income tax reforms.

Property investors will no longer be able to use losses from their rental properties to inflate their eligibility for the Working for Families programme, which was introduced to help those on low incomes.

Govt agencies miss out

Most Government agencies have received little, if any increase in funding from today's Budget. Three quarters of its $1.1 billion operating allowance has been allocated to improving health and education and lifting science and innovation.

Some $1.8 billion has been "freed up" says Mr English, and redirected to "higher priority areas" which include health and education.

The Government expects to return to surplus in 2015, with net debt peaking at 27.4pc of GDP in 2014. If economic growth improves quicker than expected, then the extra money will be used for deficit reduction.