Young New Zealanders give their thoughts on the Government's Budget 2025 and how it will impact them. Video \ Jason Dorday
There are fears changes in the Budget will reduce young people’s take-home pay and make life tougher.
The Best Start payment will be means-tested, and Government KiwiSaver contributions will be halved.
The Student Loan repayment threshold is frozen, and house prices are expected to rise 5.4% by 2026.
Changes announced in today’s Budget will hit young people’s take-home pay, make life tougher for future generations and push some to move overseas, Aucklanders have told the Herald.
There are fears a raft of new policy changes could negatively impact young families and people starting their careers.
The BestStart payment for new families will become means-tested, meaning a parent’s eligibility for the payment would depend on their income.
KiwiSaver is also getting a shake-up, with the Government halving its yearly contribution from $520 to $260, and raising the default employee contribution from 3-4%.
The Student Loan repayment threshold is being frozen at $24,000, rather than rising every year as it used to, meaning borrowers will have to start paying it back at a relatively lower yearly income.
And the Budget Economic and Fiscal Update noted house prices were likely to jump 5.4% by 2026.
The Government has defended the changes, saying tweaks to KiwiSaver would encourage people to save more and have little impact on KiwiSaver balances, while means-testing Best Start would help fund a boost for Working for Families.
The Herald hit the streets of central Auckland to gauge young people’s reaction to the Government’s spending priorities and announcements, and ask if they would be directly impacted.
“It’s kind of sad for people who don’t really have much income,” two young parents, who asked not to be named, said of the change to Best Start.
Two young parents don't think they could have survived without the Best Start payment, and worry new parents could miss out with the Government's Budget 2025 change. Photo / Jason Dorday
“It would probably be a lot harder to look after the baby [if we did not have the Best Start payment], and just not being able to get him all the things he needs,” said the couple.
“It makes it harder for people who want to just live. I think it’s a lot harder on the future generation.
“For younger people growing up, and especially younger families, buying a house ... it’s just going to be a lot harder for everyone.”
Others had similar concerns.
“I want to buy a house one day, so the lower the house prices, the better for me,” another young man told the Herald.
Commenting on the Government’s KiwiSaver contribution change, a third man said: “I think, as a young person, it’s quite appalling.
“KiwiSaver was meant to be a hope for people like us, investing in our long-term futures.
KiwiSaver sets New Zealanders up for retirement: "I thought that would be something that the Government could get behind," two young parents say. Photo / Jason Dorday
“I think some of these changes are not exactly optimistic and might actually contribute to more young people leaving this country as we go forward.”
Two more young parents said some of the changes were “a bit of a shame”.
“It [KiwiSaver] is to the benefit of the Kiwi person, it’s a great scheme, and the more money that’s in that, the better for all of our retirements. I thought that would be something that the Government could get behind, so it’s quite disappointing.
“I guess, you know, they say when we get to a retirement age, there’s potentially not going to be enough money for us to retire at the nice age of 65. So I thought the Government would be interested in trying to alleviate that issue by helping out now.”
Raphael Franks is an Auckland-based reporter who covers breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.
Do you have questions about the Budget? Ask our experts – business editor at large Liam Dann, senior political correspondent Audrey Young and Wellington business editor Jenee Tibshraeny – in a Herald Premium online Q&A here at nzherald.co.nz at 9.30am, Friday, May 23.
