Budget 2024 focusing on cost-of-living & services

The New Zealand Government has unveiled Budget 2024, aiming to address cost-of-living pressures and advancing investments in healthcare, education, and law and order. Prime Minister Christopher Luxon has described the budget as prudent and fiscally responsible, citing significant savings across the public sector as key funding sources for meaningful tax reductions and enhanced frontline services.

Jonathan Brabant, New Zealand Director at Workday, expressed optimism regarding the government's initiatives. "We are encouraged by the Government's commitment to easing the cost-of-living pressures and its investment in the education and healthcare sectors," Brabant said. He highlighted the allocation of NZD $8.2 billion to healthcare and NZD $163 million over four years to support digital services in schools as pivotal measures. Brabant emphasised the importance of strong health and education systems, stating, "A strong health system is a critical foundation of our nation's wellbeing, and a solid education system that improves student outcomes prepares us for the future."

Prime Minister Luxon underscored the significance of reallocated public sector savings, which facilitated the funding of tax relief and crucial investments. He stated, "This Budget is prudent and fiscally responsible. By identifying billions of dollars of lower-value spending across the public sector, we have both been able to deliver meaningful tax relief to support Kiwis with the cost of living and invest in key frontline services like healthcare, schools, and the Police."

The budget includes a tax package aimed at providing relief for New Zealand households. According to Luxon, "Tax relief will give the average income household up to NZD $102 per fortnight, plus FamilyBoost childcare payments of up to NZD $150 for eligible families." He also emphasised that the tax package is fully funded from savings and other revenue measures, ensuring it does not contribute to debt or inflation.

Deloitte NZ CEO Mike Horne shared his perspective on the budget's broader implications. Reflecting on past budgets, he indicated that the government's determination to mitigate cost-of-living challenges while pursuing wide-sweeping reform goals continues. However, he advised caution regarding its execution amidst acute price increases, falling house prices, and higher interest rates. Horne noted, "The economic outlook remains cautiously positive, but concerns around inflation and interest rates remain high, and the impact of borders reopening is yet to be seen."

Finance Minister Nicola Willis also weighed in, affirming the budget's alignment with the National Party's tax plan and highlighting targeted investments in public services. "This is a fiscally responsible Budget that delivers on key coalition Government commitments," she said. Willis detailed the financial allocations, which include NZD $16.68 billion for health services, NZD $2.93 billion for education, and NZD $2.92 billion to restore law and order. Additionally, a NZD $7 billion boost to capital funding is set to enhance infrastructure critical for future growth.

Willis emphasised the importance of fiscal discipline to achieve a budget surplus by 2027/28 and reduce government debt. She asserted, "We have gone line by line through government spending to find savings to responsibly deliver tax relief and boost funding for essential public services."