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Budget Update

 |  Rhonda Parkin

Budget 2021

 

Working for Families

Urgent legislation passed last night increasing working for families – so that low income families (including the self employed) are still better off working and receiving the minimum family tax credit rather than staying on the benefit.    More details here.

Free Online Digital Training and Support Tool

The Ministry of Business, Innovation and Enterprise, in partnership with The Mind Lab and Indigo, has launched a free training and support services to help businesses develop their digital capabilities.

More than 9100 small businesses are already taking advantage of these solutions through DigitalBoost.co.nz. This includes providing support on cybersecurity and fraud prevention.

Meanwhile, if you want more focused software integration advice, you may also get in touch with us so we can assist you in getting the right tech in place.

House Prices

House property prices – are forecast to from July drop from average p.a. increase of 17% to just under 1%.    Tony Alexander’s who writes as an independent economist yesterday said there are still:

4 factors keeping up the price of housing
1) Shortage belief
2) Mortgage interest rates low
3) Low return for bank deposits

4) Parents helping children into first home.

4 Factors which are fading as influencers on driving demand:
1. FOMO – Fear of missing out – high p rices driving this away.
2. Expats coming back – this is tailing off now and many NZ’ers starting to go back overseas.
3. Delayed travel – as above

4. Space to work from home

Finally, there are a few reasons that have gone – so will encourage prices to drop.

1.  Loan Value Ratio’s LVR – these are back on – so those on low incomes can not get a mortgage easily.

2. Lock down savings have gone or are still being spent on home improvements

Tony Alexander sums up by saying last year’s surprising lift in property prices proves economists have trouble predicting what will happen to housing prices but the underlying fundamentals to him suggest that prices will continue to rise, but at a reduced rate to the last 12 months.  Personally I agree with him.   Decisions about purchasing an investment property are important, equally decisions about selling property are important and should be made with a quick reference check with your tax advisors first!

There are a number of people being caught by both the bright line rules and the high tax rates for income over $180,000.   This happens when unexpectedly 2nd property has to be sold and a capital profit is made and then all that full capital profit is added to this year’s personal income – and suddenly the top rate of tax ie: 39% tax on this profit is charged.

Back to Business Webinar

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Don’t miss your chance to register for our FREE webinar, Get Back to Business, at 12pm on Wednesday 26 May.

After attending this 60 minute webinar, you’ll be able to:

  • Implement strategies to overcome key challenges
  • Gain confidence and focus on actions that have maximum impact
  • Equip your business for success and continuous improvement
  • Implement finance, pricing and budgeting strategies to improve cashflow
  • Determine steps you should take to survive and thrive in times of uncertainty

We’re sure you’ll find this webinar valuable, so get in quick and secure your place.

Register now

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