WEBVTT - NZ Budget Breakdown 0:00:08.539 --> 0:00:11.659 Hello, I'm Daniel Webster, New Zealand public affairs manager at 0:00:11.660 --> 0:00:15.320 Chartered Accountants ANZ. And this is Small Firm, Big Impact. 0:00:21.290 --> 0:00:23.660 It's not surprising that it's the no frills budget that 0:00:23.660 --> 0:00:26.960 government had touted it as. One also called it a 0:00:26.960 --> 0:00:29.630 bread and butter budget. And that's exactly what it is. 0:00:29.660 --> 0:00:33.530 There weren't any changes to the personal marginal tax rates 0:00:33.530 --> 0:00:36.559 or the personal marginal tax rate thresholds. No change to 0:00:36.560 --> 0:00:40.159 take GST off food. Also no wealth tax, no capital 0:00:40.159 --> 0:00:44.240 gains tax. But what we have got is a little 0:00:44.240 --> 0:00:47.839 surprise in there with the tax, the trustee tax rate. 0:00:52.290 --> 0:00:54.750 It's the podcast giving you and your clients the up 0:00:54.750 --> 0:00:57.330 to date information to keep you ahead of the pack. 0:00:57.660 --> 0:01:02.220 Each fortnight, we'll share resources, tools and expert advice, both 0:01:02.220 --> 0:01:05.820 from CA ANZ and a range of people across our profession. 0:01:05.970 --> 0:01:09.130 So make sure you're following the pod on your favourite platform. 0:01:09.150 --> 0:01:11.369 And if you've got an idea for the show, you 0:01:11.370 --> 0:01:21.930 can email podcast at chartered Accountants anz.com. Today's guest is 0:01:21.930 --> 0:01:26.100 CA ANZ, NZ country head Peter Vial, FCA, who has 0:01:26.100 --> 0:01:29.670 just stepped out of the Beehive budget lockup. Peter, welcome 0:01:29.670 --> 0:01:31.350 to small, firm Big Impact. 0:01:32.580 --> 0:01:36.569 Kia ora Daniel, great to join you. After an intense few 0:01:36.569 --> 0:01:40.229 hours and the budget lock up at the Beehive. As usual, 0:01:40.230 --> 0:01:43.020 it was freezing in the banquet hall there, but at 0:01:43.020 --> 0:01:45.180 least they laid on the sausage rolls and lamingtons. 0:01:45.959 --> 0:01:50.050 Yeah, good to hear. So on a food theme, ask 0:01:50.070 --> 0:01:52.650 the government have described themselves as a bread and butter 0:01:52.650 --> 0:01:55.110 government and that this would be a bit of a 0:01:55.110 --> 0:01:59.760 no frills budget. From what you've seen there. Is that 0:01:59.760 --> 0:02:00.540 the case? 0:02:01.590 --> 0:02:05.970 Absolutely, yes. Daniel, this is a no frills budget fit 0:02:05.970 --> 0:02:09.450 for the constrained circumstances that the country is in. It's 0:02:09.450 --> 0:02:12.089 not surprising that it's the no frills budget. The government 0:02:12.090 --> 0:02:15.180 had touted it as. One also called it a bread 0:02:15.180 --> 0:02:18.150 and butter budget. And that's exactly what it is. It 0:02:18.150 --> 0:02:22.650 does have four overarching themes. The first is supporting New 0:02:22.650 --> 0:02:26.370 Zealanders with the cost of living pressures. They're all we're 0:02:26.370 --> 0:02:30.450 all experiencing at the moment and then delivering services that 0:02:30.450 --> 0:02:34.260 New Zealanders need and rely on. A third theme was 0:02:34.260 --> 0:02:38.760 recovery and resilience, obviously in relation to or directly in 0:02:38.760 --> 0:02:42.380 response to the cyclone and floods with experienced earlier this year. 0:02:42.389 --> 0:02:46.170 And then of course fiscal sustainability, which picked up quite 0:02:46.169 --> 0:02:49.380 a few other aspects. The challenge, I guess for Grant 0:02:49.380 --> 0:02:54.329 Robertson as Minister of Revenue again this year was to 0:02:54.330 --> 0:03:00.090 deliver a budget that continued to invest as needed infrastructure 0:03:00.090 --> 0:03:05.070 in health and education and to throw in some quite 0:03:05.070 --> 0:03:08.730 big cost of living measures to assist people who are 0:03:08.730 --> 0:03:12.570 really struggling. But to do all of that without exacerbating 0:03:12.570 --> 0:03:16.770 inflation or increasing household debt, or adding, as I say, 0:03:16.770 --> 0:03:20.790 to inflationary pressures. So that's why he's had to go 0:03:20.790 --> 0:03:28.050 with a no frills approach and reprioritise budget allocations from 0:03:28.260 --> 0:03:30.990 one place to another in a number of cases. 0:03:32.290 --> 0:03:35.950 Interesting. So what about, first of all, can you talk 0:03:35.950 --> 0:03:39.070 us through some of the economic projections or fundamentals that 0:03:39.070 --> 0:03:40.180 the government laid out? 0:03:41.540 --> 0:03:45.650 Yeah. So there's interesting numbers there. Daniel So the Treasury 0:03:45.650 --> 0:03:51.320 is forecasting GDP growth of 3.2% this year, falling to 1% 0:03:51.320 --> 0:03:55.010 next year and then 3% levelling out at 3% in 0:03:55.010 --> 0:03:59.300 2026 and 2027. So over the long term, that average 0:03:59.300 --> 0:04:04.100 looks looks reasonable. There are Treasury's no longer forecasting a recession, 0:04:04.100 --> 0:04:06.380 which is good news. Obviously a recession is two quarters 0:04:06.380 --> 0:04:09.800 of success of two successive quarters of negative growth and 0:04:09.800 --> 0:04:14.420 they're not forecasting that we'll have that. Then they've had 0:04:14.420 --> 0:04:18.470 to defer the expectation of a surplus by one year 0:04:18.470 --> 0:04:23.000 to 2025, 2026. And that's no surprises there. One of 0:04:23.000 --> 0:04:26.570 the most interesting figures, of course, for everyone is inflation, 0:04:27.080 --> 0:04:31.190 that Treasury is forecasting that it will fall to 3.3% 0:04:31.190 --> 0:04:36.950 in 2024 and then to 2.6% in 2025. Those numbers 0:04:36.950 --> 0:04:40.969 look or forecasts look quite ambitious to me. I'm not 0:04:40.970 --> 0:04:43.969 an economist, but given we've had just come through a 0:04:43.970 --> 0:04:48.140 period of 6.7%, 7% inflation and we're still seeing the 0:04:48.140 --> 0:04:51.859 cost of living rising, particularly with food costs, I was 0:04:51.860 --> 0:04:54.380 a bit surprised to see that inflation is predicted to 0:04:54.380 --> 0:05:00.290 drop to 3.3 and then to 2.6. And some good news. 0:05:00.560 --> 0:05:05.330 Net government debt to GDP proposed to peak at only 22% 0:05:05.330 --> 0:05:09.250 and 2024, which is way lower than comparable economies or economies. 0:05:09.260 --> 0:05:12.470 We often compare ourselves to Australia, the UK, the US, 0:05:12.470 --> 0:05:16.940 which have much higher debt to GDP ratios, and then 0:05:17.450 --> 0:05:22.250 Treasury's forecasting that will reduce to 18.4% in four years 0:05:22.250 --> 0:05:26.060 time at the end of the budget forecast period. So again, 0:05:26.060 --> 0:05:30.500 that might look a bit ambitious, but Grant Robertson and 0:05:30.500 --> 0:05:36.140 Treasury are trying to deliver a cautious conservative budget. They 0:05:36.470 --> 0:05:40.730 don't want to be accused of running amok and having 0:05:40.730 --> 0:05:44.330 profligate spending, and that's one of the reasons why they're 0:05:44.330 --> 0:05:47.359 obviously very keen to keep that net government debt down 0:05:47.360 --> 0:05:53.479 below 20%. Unemployment is expected to peak at 5.3% next year. 0:05:53.480 --> 0:05:57.830 It's currently around 3.4%. So that is a reasonable increase, 0:05:57.830 --> 0:06:02.150 up to 5.3 and then level off a bit and 0:06:02.150 --> 0:06:06.409 wages are expected to grow at 5.2% a year over 0:06:06.410 --> 0:06:09.830 the four year forecast period. So those were the headline 0:06:09.830 --> 0:06:13.820 economic fundamental numbers. Economists around the country will have different 0:06:13.820 --> 0:06:17.810 views as to whether they think Treasury's, you know, landed 0:06:17.810 --> 0:06:20.089 in the right place on all of those numbers. But 0:06:20.089 --> 0:06:22.820 it's just interesting to think, think about them and reflect 0:06:22.820 --> 0:06:25.910 on how ambitious potentially some of them are. 0:06:27.210 --> 0:06:30.240 Cost of living was obviously their first priority priority on 0:06:30.240 --> 0:06:32.700 that list of four. What does the government doing to 0:06:32.700 --> 0:06:35.159 help people afford the essentials? 0:06:36.339 --> 0:06:39.010 So good question, Daniel. We we were promised a no 0:06:39.010 --> 0:06:42.400 frills budget, and that's what we've got. What is, I 0:06:42.400 --> 0:06:44.469 think really good to see is that most of the 0:06:44.470 --> 0:06:48.640 cost of living measures are very targeted, much more targeted than, 0:06:48.640 --> 0:06:52.000 for example, last year's cost of living payment, which went 0:06:52.000 --> 0:06:56.170 out to a whole or a large number of people 0:06:57.339 --> 0:07:00.940 earning below 70,000, regardless of the source of that income 0:07:00.940 --> 0:07:04.299 and regardless of asset and wealth testing. That was all 0:07:04.600 --> 0:07:07.240 all not in the mix. And we we read the 0:07:07.240 --> 0:07:11.740 stories about people overseas who were receiving that payment and 0:07:11.830 --> 0:07:15.850 various other people who didn't didn't need to receive it. 0:07:15.850 --> 0:07:18.040 So it's good to see this year that the the 0:07:18.040 --> 0:07:20.950 focus is a much more targeted one. There are a 0:07:20.950 --> 0:07:25.270 few platforms here, so one is early childhood education. The 0:07:25.270 --> 0:07:30.130 government is extending the subsidy for early childhood education to 0:07:30.130 --> 0:07:33.700 two year olds. Currently, the subsidy is only for 3 0:07:33.700 --> 0:07:36.520 to 5 year olds. It will drop down to cover 0:07:36.520 --> 0:07:39.400 two year olds and so will provide some much needed 0:07:39.400 --> 0:07:42.730 assistance to parents with very young children, allowing them to 0:07:42.730 --> 0:07:46.120 return to the workforce earlier should they choose to do so, 0:07:46.120 --> 0:07:49.990 which is good, obviously good for the the country's productivity. 0:07:50.680 --> 0:07:56.890 There's the government's going to remove the $5 prescription charge, 0:07:57.310 --> 0:08:00.190 which we've all had to pay for many years from. 0:08:00.190 --> 0:08:04.180 From my recollection, that will be removed in this budget. 0:08:04.450 --> 0:08:09.610 And that's obviously not targeted because everyone's eligible for it. 0:08:09.610 --> 0:08:12.520 But it is progressive in the sense that those with 0:08:12.520 --> 0:08:16.780 the most critical health needs, the higher health needs who 0:08:16.780 --> 0:08:22.510 need more prescriptions than other healthier people will benefit the most. 0:08:22.510 --> 0:08:25.450 So it does seem to be a sensible measure. There's 0:08:25.450 --> 0:08:28.510 some subsidies and public transport which will be of interest. 0:08:28.660 --> 0:08:34.270 So free public transport for children under 13 and permanent 0:08:34.270 --> 0:08:39.610 half price fares for people between 13 and 25. So 0:08:39.610 --> 0:08:41.469 for a number of years now, we've had free public 0:08:41.470 --> 0:08:46.210 transport for the national superintendence and this is looking at 0:08:46.210 --> 0:08:49.600 the other end of the demographic curve and extending that 0:08:49.750 --> 0:08:54.160 free program to under 13 year olds help those who 0:08:54.160 --> 0:08:57.460 travel by public transport to school or around the urban 0:08:57.460 --> 0:09:02.170 areas and rely on public transport. It's also a sound 0:09:02.170 --> 0:09:07.150 measure from an environmental environmental perspective, obviously. And then obviously 0:09:07.150 --> 0:09:09.430 for people like tertiary students or young people who are 0:09:09.429 --> 0:09:12.790 in work who need to rely on public transport or 0:09:12.790 --> 0:09:16.959 rely on public transport, this is a good outcome for them. 0:09:17.050 --> 0:09:19.449 And for when you think about it, for a family 0:09:19.450 --> 0:09:22.780 with a few children travelling to school by bus or 0:09:23.140 --> 0:09:26.650 for tertiary student families with, you know, several tertiary students, 0:09:26.650 --> 0:09:31.510 this is a really good way of cutting their weekly costs. 0:09:31.690 --> 0:09:35.709 So that will be helpful. Um, you'll recall a couple 0:09:35.710 --> 0:09:38.500 of years ago we had the winter energy payment, which 0:09:38.500 --> 0:09:41.830 was a payment that went out to a broad group 0:09:41.830 --> 0:09:46.990 of people, including all national superannuation funds. It was effectively 0:09:46.990 --> 0:09:50.199 a lump sum payment spread over a few months to 0:09:50.200 --> 0:09:54.250 cover people's winter energy costs. It wasn't targeted and even 0:09:54.250 --> 0:09:59.860 wealthy people, people who didn't need the subsidy, were receiving it. And. WHEREAS, 0:09:59.860 --> 0:10:02.949 Now with this budget, the government has chosen to be 0:10:02.950 --> 0:10:06.340 more targeted. It's going to fund 100,000 new heating and 0:10:06.340 --> 0:10:11.500 insulation retrofits and an interestingly 5 million LED light bulbs, 0:10:11.800 --> 0:10:14.740 both of these aimed at reducing the power bills of 0:10:14.740 --> 0:10:18.160 those that are most in need. So we think the 0:10:18.160 --> 0:10:22.449 more targeted approach is sensible. One obvious question is whether 0:10:22.450 --> 0:10:25.329 we have the workforce to do the retrofits, the heating 0:10:25.330 --> 0:10:29.199 and insulation retrofits. One thinks that it might well be 0:10:29.200 --> 0:10:31.720 the same workforce that has been relied on to do 0:10:31.720 --> 0:10:34.809 a lot of the cyclone recovery work. So that will 0:10:34.809 --> 0:10:37.720 be that will time will tell whether we do have 0:10:37.720 --> 0:10:43.300 the workforce to do those retrofits. One other change here 0:10:43.300 --> 0:10:45.790 under this cost of living area and the cost of 0:10:45.790 --> 0:10:48.850 living area was we tweak to the KiwiSaver rules that 0:10:48.850 --> 0:10:52.809 it will ensure that Kiwisavers who are on parental leave 0:10:53.110 --> 0:10:56.200 won't miss out. They will not be disadvantaged by being 0:10:56.200 --> 0:10:59.890 on parental leave, so their long term savings through KiwiSaver 0:10:59.890 --> 0:11:04.449 will not be affected. And that's from a gender equity 0:11:04.450 --> 0:11:07.689 perspective as a really good change. It's not a big change. 0:11:07.840 --> 0:11:10.089 It won't cost the government that lot, but it does 0:11:10.090 --> 0:11:14.260 send a very positive signal that that gender equity as 0:11:14.320 --> 0:11:21.160 is and savings. And there's very good research which confirms 0:11:21.160 --> 0:11:26.350 that women end up with with lower retirement savings than men. 0:11:26.350 --> 0:11:28.990 And this will be a way of helping address that. 0:11:29.110 --> 0:11:31.810 So as I say, we're pleased that the cost of 0:11:31.809 --> 0:11:36.310 living measures are largely pretty targeted and they're not. You know, 0:11:36.309 --> 0:11:40.600 that is sensible and the constrained economic circumstances that the 0:11:40.600 --> 0:11:43.000 government and we are all in at the moment. There 0:11:43.000 --> 0:11:49.030 isn't money to spray around as there was in COVID. 0:11:49.030 --> 0:11:51.610 And as I said, with last year's cost of living payment, 0:11:51.610 --> 0:11:52.900 it has to be targeted. 0:11:53.890 --> 0:11:54.610 Right. 0:11:55.570 --> 0:11:58.510 There wasn't meant to be any major tax changes. They 0:11:58.510 --> 0:12:00.760 ruled those out. But was there something? 0:12:01.570 --> 0:12:05.230 Well, there was something. Daniel But I'll save my breath 0:12:05.230 --> 0:12:08.260 for a second before talk about something and just talk 0:12:08.260 --> 0:12:11.740 about what? There wasn't. So and that was no surprise. 0:12:11.740 --> 0:12:15.579 There weren't any changes to the personal marginal tax rate 0:12:15.580 --> 0:12:18.610 or the personal marginal tax rate thresholds. No change to 0:12:18.610 --> 0:12:21.280 take GST off food. All of those have been ruled 0:12:21.280 --> 0:12:23.800 out by the Prime Minister, the Minister of Revenue and 0:12:23.800 --> 0:12:28.900 others before the budget. So no surprises there. Also, no 0:12:28.900 --> 0:12:32.559 wealth tax, no capital gains tax. We might see something 0:12:32.559 --> 0:12:36.250 in Labor's policy leading into the election, but certainly nothing 0:12:36.250 --> 0:12:41.680 in the budget. Again, no surprises there. Of course many 0:12:41.679 --> 0:12:44.770 people are struggling with the effects of bracket creep whereby 0:12:44.770 --> 0:12:49.090 their incomes are pushed into, their incomes increase, but they 0:12:49.090 --> 0:12:52.060 don't get the full benefit because they're pushed into the 0:12:52.059 --> 0:12:55.120 next marginal tax rate bracket. That's been a problem that 0:12:55.120 --> 0:12:58.510 we've had for decades. It's been particularly acute in the 0:12:58.510 --> 0:13:03.370 last few years with wage inflation. So people who are 0:13:03.370 --> 0:13:06.850 on average incomes are paying tax at reasonably higher rates. 0:13:06.970 --> 0:13:10.000 So in an ideal world we would have seen that 0:13:10.000 --> 0:13:14.199 problem tackled. But those changes are very expensive and they 0:13:14.200 --> 0:13:17.620 just aren't affordable in the current environment with the pressures 0:13:17.620 --> 0:13:21.070 of the cyclone and flood relief and and also they 0:13:21.070 --> 0:13:24.580 would be inflationary potentially. So they're off the table and 0:13:24.580 --> 0:13:25.960 we knew they were off the table. So we haven't 0:13:25.960 --> 0:13:29.710 got any of that. But what we have got is 0:13:29.710 --> 0:13:32.380 a little surprise in there with the tax, the trustee 0:13:32.710 --> 0:13:35.590 tax rate. So the trustee tax rate has for a 0:13:35.590 --> 0:13:39.070 number of years been 33%. This government and this budget 0:13:39.070 --> 0:13:41.680 has announced that it will move the trustee tax rate 0:13:41.950 --> 0:13:45.910 from 33% to 39% to align with the top personal 0:13:45.910 --> 0:13:49.860 marginal tax rate of 39% that came in from 1st 0:13:49.860 --> 0:13:53.349 April 2021. Why is the government doing this? The government 0:13:53.350 --> 0:13:58.090 is doing this because it has identified a loophole and 0:13:58.090 --> 0:14:01.900 the evidence is very clear. The budget documents confirm that 0:14:01.900 --> 0:14:05.560 in the first year of the increase in the to 0:14:05.559 --> 0:14:10.150 the 39% for the top personal marginal tax rate, there 0:14:10.150 --> 0:14:14.469 was a sudden spike in income earned by trustees. So 0:14:14.470 --> 0:14:18.790 trustees were earning $5.7 billion more of income in that 0:14:18.790 --> 0:14:21.730 year than they had in the previous income year. So 0:14:21.730 --> 0:14:24.220 that was the evidence the government needed to to show 0:14:24.220 --> 0:14:28.840 that there was a loophole and it was being used or, 0:14:28.840 --> 0:14:31.720 you know, in their view, abused. So that is that 0:14:31.720 --> 0:14:36.670 opportunity has been removed with effect from one April 20th, 24. 0:14:37.120 --> 0:14:40.840 Those rates will be aligned. Personally, I was very pleased 0:14:40.840 --> 0:14:45.280 to see or hear Minister Robertson announce that that change 0:14:45.280 --> 0:14:48.730 will go through the select committee process. So there will 0:14:48.730 --> 0:14:52.840 be the opportunity for submissions, one assumes, and that will 0:14:52.840 --> 0:14:56.410 be reviewed by the the finance and Expenditure Select Committee 0:14:56.410 --> 0:15:00.730 as normal tax change naught tax changes normally are. There 0:15:00.730 --> 0:15:05.260 could well be, you know, peripheral issues, there could be 0:15:05.260 --> 0:15:09.400 collateral damage, things that officials perhaps haven't thought about that 0:15:09.400 --> 0:15:11.500 need to be brought to their attention and to the 0:15:11.800 --> 0:15:15.220 Government's attention to Parliament's attention. So those things can be 0:15:15.220 --> 0:15:18.430 ironed out through that select committee process. But the key 0:15:18.430 --> 0:15:22.750 change here is that the trustee rate will move to 39% 0:15:22.750 --> 0:15:27.010 to align with the top personal marginal tax rate. A 0:15:27.010 --> 0:15:29.110 few other things I should have mentioned that weren't in there. 0:15:29.110 --> 0:15:31.660 There had been some kind of scuttlebutt or gossip about 0:15:31.660 --> 0:15:35.470 whether the government might introduce a higher personal marginal tax 0:15:35.470 --> 0:15:38.980 rate to apply to very high incomes of, say, 45%. 0:15:38.980 --> 0:15:41.410 That's not in the budget. Again, it could come through 0:15:41.410 --> 0:15:45.850 in the election policies of different parties, the Labor Party 0:15:45.850 --> 0:15:50.560 and obviously might consider that. And it's and it's in 0:15:50.560 --> 0:15:54.580 the lead up to the election mentioned. I think there's 0:15:54.580 --> 0:15:59.710 no decision to remove GST off fresh food. Often there 0:15:59.710 --> 0:16:05.230 are calls for that and particularly in times of economic pressure, 0:16:05.230 --> 0:16:08.110 there are calls for that to happen to reduce the 0:16:08.110 --> 0:16:12.220 food bill for households that are struggling. I think it's 0:16:12.220 --> 0:16:16.000 the right thing not to go down that route because 0:16:16.150 --> 0:16:19.690 New Zealand has the most efficient GST system in the world, 0:16:19.690 --> 0:16:24.970 according to the OECD, and that's been the case for decades. 0:16:24.970 --> 0:16:29.920 It's a very comprehensive tax. It's hard to avoid and 0:16:29.920 --> 0:16:33.220 relatively easy to comply with and we don't have all 0:16:33.220 --> 0:16:35.620 the definitional issues that come when you start to make 0:16:35.620 --> 0:16:41.380 further exemptions and exclusions. And also fundamentally, there's no guarantee, 0:16:41.680 --> 0:16:45.010 excuse me, that of GST were taken off food that 0:16:45.010 --> 0:16:48.880 that would that price reduction would flow through to the 0:16:48.880 --> 0:16:52.900 end consumer. So great to see the government resisting the tax. 0:16:54.020 --> 0:16:57.920 To do something in that area. So yeah, so that's 0:16:57.920 --> 0:17:02.210 what's happened in tax one. One little surprise and no 0:17:02.210 --> 0:17:03.260 big surprises. 0:17:03.530 --> 0:17:05.119 Yeah, a lot left out there. 0:17:05.119 --> 0:17:08.510 That will still be on the table for future discussions. 0:17:08.840 --> 0:17:13.010 There were signals that small business wouldn't get much. That 0:17:13.010 --> 0:17:17.060 was that was the expectation. Was that true on first blush? 0:17:18.220 --> 0:17:23.020 Certainly on first blush, there's no significant direct support for 0:17:23.020 --> 0:17:26.440 small business. So, you know, measures that are specifically targeted 0:17:26.440 --> 0:17:31.510 at small business generally, small business, there will be implications 0:17:31.510 --> 0:17:34.300 for small business, for example, And all the money that's 0:17:34.300 --> 0:17:38.320 being invested in resilience and recovery from the cyclone and 0:17:38.320 --> 0:17:40.239 the floods that will have some flow on effects for 0:17:40.240 --> 0:17:43.840 those small businesses affected by those events and also the 0:17:43.840 --> 0:17:48.490 small businesses that support or work with those businesses affected. 0:17:49.030 --> 0:17:51.429 But they did. The government, interestingly, the government did pick 0:17:51.430 --> 0:17:56.169 one winner here in the small business area. They've decided 0:17:56.170 --> 0:18:01.510 to give the gaming development sector. So video gaming entities 0:18:01.510 --> 0:18:05.949 or companies a businesses, a 20% rebate for video game 0:18:05.950 --> 0:18:10.270 development studios. So the sector brought in $400 million in 0:18:10.270 --> 0:18:13.900 revenue in 2022, and it's growing rapidly. I understand it's 0:18:13.900 --> 0:18:18.010 quite a big sector. And the Wellington region, for example. 0:18:18.880 --> 0:18:21.190 And so they've been a winner out of this. They've 0:18:21.190 --> 0:18:25.060 got the support, the support aligns the New Zealand treatment 0:18:25.060 --> 0:18:28.990 with or puts them on a more level playing field 0:18:28.990 --> 0:18:32.949 with this kind of support and subsidy that the Australian 0:18:33.160 --> 0:18:36.820 equivalent industry receives. So and they are competing on a 0:18:36.820 --> 0:18:40.570 global stage for this. So it's great to see that 0:18:40.570 --> 0:18:43.149 this has happened for them. But the bigger question or 0:18:43.150 --> 0:18:45.550 the obvious question is what is being done to support 0:18:45.550 --> 0:18:48.939 other sectors that are made up predominantly of small business, 0:18:48.940 --> 0:18:51.489 like the video gaming sector? They might not be as 0:18:51.490 --> 0:18:54.429 sexy as the video gaming sector, but they are making 0:18:54.430 --> 0:18:57.840 equally important contributions to the New Zealand economy and are 0:18:57.850 --> 0:19:03.070 also having to compete with global competitors, including for for labour, 0:19:03.070 --> 0:19:05.830 just in the same way as the video gaming sector has. 0:19:05.830 --> 0:19:08.500 So what I'd like to see is if the support 0:19:08.500 --> 0:19:12.250 for the video gaming sector is successful and does that 0:19:12.250 --> 0:19:16.060 grow that industry and give a decent return on investment, 0:19:16.060 --> 0:19:18.790 then that should be a model that's looked at to 0:19:18.790 --> 0:19:21.670 see whether it can be rolled out to other sectors. 0:19:21.670 --> 0:19:25.370 Some of the other sectors that are interesting here are 0:19:26.050 --> 0:19:31.869 tourism and horticulture, for example, got relatively small, pretty, pretty 0:19:31.869 --> 0:19:35.980 small because support for technology development, for example, and their 0:19:35.980 --> 0:19:39.399 sectors and innovation. So not a lot for them. And 0:19:39.400 --> 0:19:42.640 they are big industries, really critical to New Zealand's economy. 0:19:42.640 --> 0:19:45.879 So again, I say let's see how this gaming sector 0:19:45.880 --> 0:19:48.220 support works and if there are lessons to be learned 0:19:48.220 --> 0:19:50.890 there that can be and the money's there to roll 0:19:50.890 --> 0:19:54.190 them out more widely, then then the government, the government 0:19:54.190 --> 0:19:57.490 should should go for it. There is a focus on 0:19:57.490 --> 0:20:05.140 technology and science with $400 billion invested in some sorry, 0:20:05.140 --> 0:20:10.630 400 million invested in several multi institution science hubs. Again, 0:20:10.630 --> 0:20:12.760 that's the type of investment that ultimately in the long 0:20:12.760 --> 0:20:17.050 term will have ripple effects around the economy. The more 0:20:17.050 --> 0:20:19.660 research that has done in those science hubs that's commercially 0:20:19.869 --> 0:20:22.180 that can be commercialized, the better and there'll be flow 0:20:22.180 --> 0:20:25.600 on effects for small business and and the hubs around 0:20:25.600 --> 0:20:30.369 those or the networks, the clusters around those science hubs. 0:20:30.490 --> 0:20:33.160 So that's that's a sizable investment. 0:20:34.090 --> 0:20:37.120 Okay, Peter. Well, that's all we've got time for today. 0:20:37.390 --> 0:20:38.800 To all the listeners out there, if you want to 0:20:38.800 --> 0:20:42.159 know more, Peter's full perspective is on our 2023 budget 0:20:42.160 --> 0:20:46.540 page on chartered accountants ANZ. And you can check out 0:20:46.960 --> 0:20:49.450 a recording of our Sharing Knowledge session that will also 0:20:49.450 --> 0:20:52.720 be up there. So thank you for joining us, Peter. 0:20:53.020 --> 0:20:54.429 Pleasure, Daniel, Good to talk to you. 0:20:54.580 --> 0:20:56.080 Yes, and bye for now. 0:20:56.710 --> 0:20:57.070 Ka kite ano .