Analysts at ANZ explained that it’s NZ Budget day where the key messages are expected to be: an upbeat outlook for tax revenues and the general economic outlook; and the government can achieve its fiscal targets, but there will be some tough trade-offs for spending priorities.
“Tax revenues should get a small bump from the new “Amazon tax” (GST on online purchases under $400), the removal of negative gearing on investment property, and the targeting of foreign and multinational companies on the tax front. In addition, the starting point for the Government’s books is stronger than forecast in the 2017 Half Year Update.”
“Together, the higher starting point and small bump in revenue provide the Government with a few options.”
“But we expect there will be little room for additional sweeteners of any significant size as the government maintains strict adherence to its Budget Responsibility Rules.”