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From: May 2010 Budget Summary

20 May 2010 New Zealand Government Budget Announcement

Here's our summary of the key points relating to personal taxes and investments and some useful links

The overall objective of the budget is stated as aiming to "lift economic growth by improving incentives to work, save and invest".

From 1 October 2010 all personal income tax rates will decrease. The new personal tax rates are:
10.5% income <$14,000
17.5% income between $14,001 and $48,000 (down from 21%)
30% income between $48,001 and $70,000 (down from 33%)
33% on income over $70,000 (down from 38%)
From 1 October 2010 GST increases from 12.5% to 15%
From 1 April 2011 the company tax rate drops from 30% to 28%
From 1 April 2011 the PIE (Portfolio Investment Entities) tax rate will drop to 28% from 30%
Family Trust tax rate stays at 33% and is now aligned with the top tax rate.
The 20% loading on depreciation for new assets will be dropped immediately from 1st May 2010.
Depreciation claim on buildings with a life time of greater than 50 years and that are expected to appreciate will no longer be claimable. (we expect this is to allow commercial buildings to retain depreciation deductibility).
New rules around "loss attributing qualifying companies" (we suspect tightening of the rules around "the associated persons" rules).
Property investors will no longer be able to use losses from rental properties to inflate their eligibility for the Working for Families Programme which was used to help those on low incomes.
"The Cullen Fund" - designed to fund future demand for superannuation commitments is on hold. Continuing to make automatic payments to the super fund of $2.2bn a year would have added $19.5bn to debt over the next 11 years. Contributions are expected to restart in 11 years once the Governments books are in surplus at $2.5bn per year.
Projections included in the budget indicate that in the current year to March 2010 the NZ economy will have contracted 0.9%, followed by a 1.7% by September, then in 2011 a 1.8% growth is expected, followed by a growth of 2.9% in 2012 and 4% in 2013.