Amid challenging economic conditions and rising costs fuelled by global volatility, the coalition government has delivered its election-year budget, placing a strong emphasis on reprioritisation and fiscal discipline. To drive economic growth, promote certainty, and ease compliance costs, a number of tax changes feature in the 2026 budget. Easing complexity for employers that provide fringe benefits has been on the government’s agenda and has finally come to fruition. Simpler rules will apply from 1 April 2027 for the calculation of an employer’s fringe benefit tax liability in respect of motor vehicles, including removing the need to track private use. In a win for not-for-profit (NFP) organisations, the budget introduces certainty on the taxation of membership subscriptions and levies by ensuring that these will continue to be treated as non-taxable. To ease compliance costs for smaller NFP entities, the current effective tax-free threshold will be increased from $1,000 to $10,000. The threshold for individuals and certain trusts that hold interests in foreign investment funds (FIFs) will increase from $50,000 to $100,000 or less of investments that will not be subject to the FIF rules. The government is also committing funding of $15 million per annum for the next 4 years towards Inland Revenue debt compliance activities in a bid to reduce ballooning levels of outstanding tax debt. Other noteworthy announcements include: Public service Public service reforms are expected to save $2.4 billion by improving value through greater use of AI and digital technology and reducing the number of government agencies. Savings will be redirected to health, education, defence, and infrastructure, driven by digitising back-office and customer services and returning workforce numbers to historic levels. Education The final-year fees free scheme will no longer be available from the end of 2026 $131 million in funding will go towards maths and literacy learning resources and programmes, additional intervention teachers, and professional learning and development support for teachers. Health $682 million in capital investment into improving hospital infrastructure  $35 million over 4 years to bolster ambulance services, including new ambulance hubs, staff training and a digital patient records system. Defence $2.3 billion in capital and $1.2 billion in operating funding on maritime fleet renewal and maintenance, military bases and training facilities. Energy An allocation of $48 million to cover potential losses under the Gas Transition Loan Guarantee Scheme to help businesses shift from gas to alternative fuel sources. Infrastructure As part of the replacement of the Resource Management Act 1991, $41 million has been allocated as the first phase (said by the ministers to be a long-term transformation) for a new planning system based on the enjoyment of property rights, a national digital system that is centrally managed and intended to remove duplicated effort, create consistency and make planning decision-making faster and easier. Funding of $400 million is made available to ensure communities can remain connected via important roads liable to damage from severe weather events. $1.773 billion in funding for the Cambridge to Piarere Road of National Significance, extending the Waikato Expressway which is one of New Zealand’s most strategically important transport corridors.

Employment Relations Amendment Bill 2026 Highlights – Effective 21 Feb 2026 The 'Specified Contractor' Gateway Test If you hire someone as a contractor and you want them to be a "Specified Contractor", the engagement MUST meet a specific set of criteria. As such this then exempts them from later challenging the fact and from arguing they were an employee all along: A statement of intent (written agreement) stipulating that the worker is an independent contractor, or 'not an employee'; The party has no restriction on other work. They have the freedom to work for any other party other than during the time in which they are engaged with you, unless if the agreement is to complete a specific project or task Has the flexibility to arrange their working time/hours OR has the ability to subcontract the work; The worker will not be terminated from the arrangement if they decline additional work; and Is proven to have had a reasonable opportunity to seek independent advice before entering the commencement. The important point with all this is that if all the above are not met the worker IS able to challenge the status of their engagement as we have seen for many years. It has been made clear that this provision will not apply retrospectively therefore our recommendation is that if you wish to consider a worker a 'Specified Contractor' going forwards we strongly recommend reviewing your contract with them and vary or re-sign accordingly. Personal grievance remedy awards If an employee brings a personal grievance against their employer, and it is proven that the employee's behaviour has given rise to the issue in the first place, reinstatement of employment may be off the table, and/or financial compensation to the employee may be reduced by up to 100%, and particularly so in the instance or serious misconduct. $200,000.00 remuneration limit on unjustified dismissal grievances An employee who earns over a certain income threshold (currently set at $200k per annum) cannot bring a personal grievance against the employer for unjustified dismissal. This potentially means that in such cases an employer can 'fire at will' without following a good faith process. This threshold figure includes all wages/salary, commissions, bonuses etc, and will be revised periodically by the Government. The amendment does allow for parties to explicitly opt out of this provision, meaning if agreed an employee on more than that threshold could bring a grievance against their employer. Why an employer would opt into that remains to be seen! For new employees this position is effective immediately. For existing employees you have 12 months to negotiate this point before the default position applies, being that an employee earning $200,000 or more per annum cannot raise a personal grievance for unjustified dismissal. 90-Day Trial Period Further protection for employers is now available. It is a technical point legally, but previously a compliant 90-day trial period provision and associated termination gives an employer legal protection against a personal grievance for unjustified dismissal. However, it is common knowledge and practice that lawyers & savvy advocates turn such challenges into claims of unjustified disadvantage instead, thus potentially circumventing the legal protection for the employer under the Act. This avenue is now blocked. Under this Amendment Act an employee (or representative) cannot claim unjustified dismissal or unjustified disadvantage relating to the dismissal. 30-day rule abolishment  For businesses where collective employment agreements (CEA) are in place, previously any new hire whose work would normally fall under the scope of a CEA scope of such must be hired at least for 30 days on the CEA before even negotiating with the person the option of an individual employment agreement (IEA). Employers Assistance 17.2.2026