They give, and they take away

Wrecked buildings in Christchurch. Photo / Sarah Ivey

Losses

* KiwiSaver minimum contributions will rise for employers and employees from 2 per cent to 3 per cent from April 2013. The tax-free status of employer contributions will be removed from April 1 next year and taxed at the employee's marginal tax rate. Member tax credit from the year to June 30, 2012, will be halved to 50c for every $1 contributed by members, up to $521 a year. Budget changes to Kiwisaver aim to save the Government $2.6 billion over four
years.

* Thin capitalisation rule changes for foreign-owned banks will limit the amount of debt that can be allocated to New Zealand. The minimum prescribed percentage of equity for tax purposes is rising to 6 per cent from 4 per cent from April 1 next year. Revenue Minister Peter Dunne says the effect of the rules will limit foreign-owned banks' deductions against the New Zealand tax base. The change is expected to raise about $8 million of tax revenue in the
next fiscal year and $31 million a year thereafter.

* Tax treatment of employee benefits paid in lieu of salary will be reviewed by the Government. Any changes are expected to result in an increase in tax revenues. The leisure assets of rich people are of greatest interest, with instances such as yachts being rented out and used privately providing owners with inflated tax deductions.

Wins

* Certainty of funding for Christchurch through the establishing of the Canterbury Earthquake Recovery Fund. The fund will initially include up to $5.5 billion to meet the Government's earthquake-related costs, other than those funded by EQC and ACC. A new four-year maturity earthquake bond will be launched for New Zealand investors with proceeds directed to the fund.

* Infrastructure will get about $1.6 billion more spending, with broadband, rail and schools flagged as top priorities. The spending includes more than $500 million of re-prioritised capital. Capital spending in the Budget includes $942 million of Government funding for ultra-fast broadband, $250 million more for KiwiRail's 10-year turnaround plan, $88 million for Wellington's Metro Rail and $109 million for education, including leaky building remediation.

* Education gets an extra $1.3 billion in operating funding and $109 million in capital out to the 2014/15 year. Total education and tertiary spending is a record $12.2 billion in 2011/12. Education Minister Anne Tolley says funding is targeted to support initiatives that improve the system, lift achievement and engage young people in options that lead to worthwhile qualifications.

* Investment in improving frontline public services and reducing debt will get $700 million in 2011/12 out of a reprioritisation of $5.2 billion of existing spending out to 2014/15.

* Serious Fraud Office gets $8.3 million across the current year and 2011/12 to continue fighting white-collar crime.

* The new Financial Markets Authority gets an extra $6.8 million to cover its first period of operating and litigation costs and $5 million in 2011/12 to cover the cost of office facilities for increased staff numbers and new IT infrastructure and applications.