Last week saw the rollout of the Government’s 2021 Wellbeing Budget, which depicts how the ‘kitty’ from the household of 5 million will be spent over a four-year period. Unlike the 2020 Budget, which had a strong emphasis on COVID-19 business recovery, this year we see a more pinpointed focus on economic recovery, including key areas such as welfare, unemployment, and the reformation of the health sector.
We’ve jotted down the key takeaways from the 2021 budget and have your hype-free rundown sorted (because we know you don’t have time to read the fine print). Here we go:
Key Budget takeaways
– Boost in welfare and benefits
– Increased funding to decrease unemployment rates
– Boost in investment in climate change mitigation activities
– Boost in tourism sector support
– Boost in digital training for small business
– Reforming and centralising the health system and developing an effective Māori Health Authority
– Boost in COVID-19 vaccine funding and development of an effective rollout plan
– Boost in funding for the Housing Acceleration Fund, focusing on increasing the scale of Māori housing delivery
Welfare and unemployment
The most publicly talked about change from the 2020 Budget was the increase in budgeted welfare costs, aiming to lift families and children above the poverty threshold. Budget 2021 has committed $3.3billion over the next four years to increase benefits for families, boost student allowances and student loans for living costs, and extend the range of courses covered by the Training Incentive Allowance for those on the benefit looking to upskill.
As with the 2020 Budget post COVID-19,unemployment continues to be a key issue. Although expected to reach 5.2% in the second half of 2021, the Government predicts a decrease to 4.2% by 2024,with a strong message promoting re-training and up-skilling of the workforce.
Health system and COVID-19 vaccine rollout
The 2021 Budget indicates major changes to NZ’s health system, with the Government announcing it will dismantle district health boards, create a central agency, and establish a Māori Health Authority. It’s expected that $5 billion will be spent on the health system reform over the four-year budget term.
The Government has also proposed a $1.3 billion COVID-19 vaccine roll-out plan, to get the ‘team of 5 million’ into tip-top, COVID-fighting shape!
Government support for Hospitality and tourism businesses
The Government has earmarked $200million to help the hard-hit tourism sector get back on its feet post-COVID. This amount will be generated from the COVID-19 Response and Recovery Fund, which has budgeted significant investments in training, businesses, infrastructure and tourism to stimulate growth in the economy.
Funding support for the tourism sector is expected to create flow-on effects for industries under its umbrella, such as hospitality and retail—a win for businesses based in tourist-dense areas like Wellywood!
Small business digital training
As providing support for small businesses is one of the key objectives in its business recovery support programme, the Government’s investing $44 million in a ‘digital boost’ for Kiwi SMEs. This will include training, support and advice around adapting new digital techniques to form more resilient businesses.
The initiative aims to boost productivity and business confidence in technology-driven business environments. As we always say, taking a step out of the business to work on the business is a great step towards growth—so it’s exciting to see how this rollout will change SMEs’ approach to digital business!
New Zealand Green Investment Finance
The Government is laying foundations for its Climate Action Plan with a proposed $300 million budget. The budget indicates a strong focus on supporting low-carbon technologies and low-emission vehicles. It also incorporates extra funding to support the Climate Change Commission’s final advice on the Government’s policy response. These incorporations come in response to the Government’s commitment to build a net-zero carbon future for NZ by 2050.
SMEs are cogs in the NZ economy, so it’s a good idea for business owners to invest in refining systems and processes to reach these climate targets. All hands on deck, as they say!
Housing Acceleration and Māori Infrastructure Funds
Another important initiative in the 2021 Budget is the $3.8 billion Housing Acceleration Fund, created to address issues surrounding the growing property market. Its funding comes from the COVID-19 Response and Recovery Fund which (among many other things) aims to increase the supply of affordable and public housing.
Inside this funding is a ringfenced $350 million that will be used to establish the Māori Infrastructure Fund, aimed at relieving housing stress for Māori by providing new accommodation and repairing existing homes.
Phew! You made it!
Although we’ve only skimmed the surface of the 2021 Wellbeing Budget we think we’ve pinned down the key takeaways (just in case you’re ever quizzed on it). If you’re eager to hear more about what’s been included in Budget 2021, check it out here.
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