While previous government statements placed the timeline for the scheme as being before Christmas Day. This announcement seems to be a warning or an indication of intent so far, as there were a number of details omitted by Michael Cullen concerning the Bank Deposit Scheme. Predominantly the missing details are those surrounding the involvement and requirements from the Australian government and banks in regards. However, previous statements made by Michael Cullen indicate that there might be a requirement for participating Australian banks to float set amounts of their shares on the New Zealand Stock Exchange.

This quickening of pace is not thoroughly welcome by some key banking figures. ANZ National’s chief executive Graham Hodges, maintained throughout statements made that there is no need to “rush” into the bank guarantee scheme. He also said that the New Zealand market is at a comfortable level of liquidity at the moment, one which did not require immediate action.

Michael Cullen claimed that the New Zealand government has been considering actions such as this scheme for a long time, and would have preferred to announce them at a later point but because of Australia announcing an equivalent scheme, it had to be done now.

As it stands at this moment in time, the proposed retail-banking guarantee scheme does not extend to funds attained from international wholesale markets. According to Michael Cullen the government has been looking at the possibility of making this a reality, although since the New Zealand banking system was not undergoing any sort of crisis at the moment, they have to time to properly create and implement appropriate measures.

Concerns arise with the proposed scheme whereby it would seem that it would give virtual monetary guarantees to offshore stakeholders, effectively transferring the benefit out of New Zealand. While he acknowledged the difficulties, Michael Cullen also did make the point that there is a necessity for the New Zealand government to implement some measures to protect the New Zealand financial sector.

Jeanette Fitzsimons, leader of the Green Party, confirmed her party’s support of the scheme the following. She also claimed to want to see a higher collaboration between parties within Parliament in the support of this scheme. Though she did mirror the concerns of Michael Cullen, with the possibility of such a large benefit being exercised exclusively by overseas bodies.

National Party leader, John Key also supports the proposal, although with much less trepidation and more enthusiasm than Jeanette Fitzsimons. His reasoning, according to statements issued on the morning of the 20th of October, being that countries like Australia who are already implementing similar systems will find it proportionately easier to access money.

The scheme was announced by Finance Minister Michael Cullen and was brought in under the Public Finance Act. While he went on to say that the government has total confidence in the New Zealand banking sector, the initiative was to ensure confidence from both banks and New Zealand investors. The move follows similar schemes adopted recently by Ireland and Australia.

The Deposit Insurance is currently is pegged at $150 million dollars, and is an optional opt-in scheme, and is planned initially for a two year time period. Currently registered banks and deposits by institutions like building societies and credit unions are eligible for the scheme.

At the time of publication ASB, Westpac and Kiwibank have all indicated that they will participate in the scheme.

The new petrol taxes are specifically budget to pay for the electrification of Auckland’s rail network. Any surplus that might present itself will be budgeted for further road construction projects. The proposed taxing scale will see an extra 1c added to each liter of petrol on the 30th of June, 2009. A subsequent rise to 3c is scheduled to occur in the winter of 2009 and lastly a raise to 5c in 2011.

While the new petrol tax is not set in concrete yet, Finance Minister Michael Cullen appears confident in it reaching government approval within the fortnight. He went so far as to say that “The Government sees in effect the current electrification as a lock-down certainty. We are starting to think about the next stage now.” As such, the new petrol tax is as certain as the electrification project.

This is the first of the three tax cuts put forward by Finance Minister Michael Cullen. The effect of this will be most felt with those in the $38,001 – 40,000 taxable income bracket, with a drop from a tax rate of 33% to 21%. Earners in the $14,001 – 38,000 bracket will see no change, while $9,501 – 14,000 will see a drop of 8.5% to a level of 12.5%. Lastly, earners between $0 and 9,500 will see a drop of drop to 12.5% from its previous 15%. There are no changes at levels above $40,000 annual taxable income.

This tax change is accompanied by a raise in superannuation pay and favorable changes to the Working For Families tax credit. The second and third round of tax cuts are scheduled to take place in 2010 and subsequently in 2011.

Political analysts expect the National Party to release their counter-plan to the tax cuts as early as next week. It is expected that this event and the planned tax cuts will be an important if not pivotal argument of the upcoming campaigns for the November 8th national elections.

It was also stated that there is still opportunity for interested and affected parties to make comment on these changes.