Less new money to be spent in Budget - Prime Minister tells BusinessNZ

Less cash will be thrown around in this month’s Budget, the Prime Minister has told a business audience in Auckland. The precarious economic situation means the government must stay on track with its fiscal strategy, the Prime Minister told the Business New Zealand event. “We can’t control the storm, but we can secure New Zealand’s future within it,” Luxon says. Luxon also said global turmoil reinforced the importance of responsible economic management and fiscal discipline ahead of Budget 2026. Operating spending on new initiatives in the Budget will be $2.1 billion – about $300 million less than the $2.4b allowance set in December. “We are getting the books in order while continuing to invest in the essentials – health, education, defence, law and order, and infrastructure. That requires ongoing reprioritisation, because the alternative is more borrowing or higher taxes – and ultimately a weaker economy.” The Prime Minister confirmed the Government remains committed to returning the books to surplus by 2028/29 and putting debt on a downward trajectory towards 40 per cent of GDP. This year’s Budget will be unveiled on May 28. The Finance Minister has repeatedly said she would retain a focus of “tight control” on spending and an operating allowance of $2.4b. Any spending will be on health, education, defence, law and order, with other departments likely to be told to find further “savings”. In a rare pre-budget leak, New Zealand First leader Winston Peters last week revealed the Government would scrap fees-free tertiary study for final year students. The flagship policy from the Labour-led Government provided up to $12,000 in tuition fee payments for the first year of provider-based study, or the first two years of work-based learning. The coalition Government then changed it to cover the final year of tertiary education study. Katie Bradford is a Senior Correspondent at the Herald. She has been a broadcast journalist for over 20 years and was based in the press gallery for 10 years. She specialises in politics, business and Auckland issues.

Go to News Site