The Government has revealed their so-called ‘mini-budget’ today, having found almost $7.5 billion in savings.
They’ve done this largely by discontinuing various Labour initiatives, notably, the previous Government’s planned 20-hour early childhood education extension, yielding savings of $1.181 billion over four years.
Further discontinuing Let’s Get Wellington Moving contributes savings of $525 million, and ending Labour’s half-price fares for those under 25 results in savings of $265 million.
Finance Minister Nicola Willis said today’s mini-budget “sets out the immediate steps the coalition Government is taking to strengthen New Zealand’s economy, repair public finances and deliver cost-of-living relief”.
Further budget adjustments involve redirecting funds, including reclaiming $647 million from the Government Investment in Decarbonising Industry (GIDI) fund and accessing uncommitted funding from the Climate Emergency Response Fund, amounting to $500 million.
Tax and income changes encompass the anticipated indexation of main benefits to the Consumer Price Index (CPI), leading to savings of $676 million over four years, albeit with a slightly delayed implementation.
While the government still anticipates a surplus in 2026/27, it is expected to be lower than pre-election predictions. Unemployment is projected to peak at 5.25% in 2025, and inflation is anticipated to return to the 2% range in the same year.
Minister Nicola Willis said: “New Zealand is grappling with a toxic trio of high and sticky inflation, high interest rates and reduced economic output.”
A significant financial adjustment involves the removal of Commercial Buildings Depreciation, resulting in savings of $2.311 billion over four years.
Finance Minister Nicola Willis emphasised that today’s mini-budget outlines the immediate measures taken by the coalition Government to fortify New Zealand’s economy, restore public finances, and provide relief from the cost of living.
This initiative is prompted by Treasury warnings of a slowing economy, attributed to reduced spending and diminished business revenue despite the positive impact of high migration.
Image from 123RF.