Budget To Focus On Post-Cyclone Repair & Cost-Of-Living Relief

PM Hipkins has said that the May 18 budget will be focussed on cost-of-living relief and recovery from Cyclone Gabrielle but will be “no frills”. There also won’t be any new taxes or tax cuts. The recovery cost of recent weather events are to be funded from both within the existing budget and debt issuance.

• Finance minister Robertson said "We've had some big Budgets over the last few years to support people through Covid so we've got to look carefully at the way we're funding everything." He has said that the Budget will show fiscal responsibility.
• There will be a $1bn flood and cyclone recovery package, on top of the $800mn of support already announced. The fund will cover the “basics”, i.e. repair roads, school, rail and includes flood protection and mental health support. Treasury estimated that fixing the damage will cost $9-$14bn with $5-$7.5bn for public infrastructure repair but the cost will be spread over several years.
• Another $400mn in the budget will be spent on schools and $73.5mn for family violence prevention over four years.
• The government has found $4bn in savings and reprioritisations over the coming 4 years and most of it will go to funding agencies’ existing expenditures. Covid programmes, the cancelled public media merger and affordable water reforms will have their funding reallocated. There will also be reduced funding for the clean car upgrade and social leasing schemes.
• Robertson has said that spending is easing toward the low-30% of GDP rate but he doesn’t want to get it there sooner, as that would require significant cuts. Tax revenue is expected to fall to 29.9% of GDP from 30.2%.
• NZ debt is forecast to rise to 19.9% of GDP from 17.2%, but still below the 30% debt ceiling. The deficit in the FY to date has been larger than expected due to Cyclone Gabrielle and lower-than-expected tax revenues.
  - RNZ, Stuff.co.nz