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Francesca Rudkin: The Government delivered a refreshingly grown-up Budget

Author: Francesca Rudkin,
Publish Date: Sun, 31 May 2026, 11:02am

Well, it wasn’t the most exciting Budget week was it? Finance Minister Nicola Willis’ budget was designed around fiscal restraint, deficit reduction, and a return to operating surplus by 2028/29 (depending on the accounting measure used!).

It does appear to make progress toward reducing spending growth. Major savings are expected from restructuring the public service and ending the final-year “fees free” tertiary policy. Whether these cuts are fully achievable is uncertain. The plan to reduce around 8700 public-sector jobs by 2029 relies on agency mergers, technology adoption, and continued restraint across departments. That’s a lot to get done right. Critics argue these reductions may prove politically difficult due to differences between the coalition parties.

On the revenue side, the Government introduced a new levy on banks and insurers and adjusted several tax settings, but the Budget largely depends on stronger future growth to lift tax receipts over time to make the numbers work.

The Government also attempted to address productivity and long-term growth through increased capital investment in infrastructure, defence, hospitals, schools, vocational training, and technology development. Supporters argue these investments will improve economic capacity over time. Critics contend we still lack a comprehensive productivity strategy and under-invest in innovation and business growth.

So it’s not an aspirational Budget. Or an interesting one. It’s not a Budget that is going to seriously address inequality and inequity in NZ. It’s a back to basics, practical Budget and pretty much what we were expecting.

But what I do like, and what makes this Budget distinctive, is the medium and long-term approach which, considering the pickle we’re in, is refreshingly grown-up.

This is a Budget focused on long-term economic management rather than near-term popularity. It largely devoid of gimmicks, bribes, or incentives for voters. This is a Budget that draws a line in the sand. This is National and the coalition practising what they preach and defining themselves by their decision making.

Whether the strategy succeeds politically is another question. Yes, it demonstrates fiscal credibility and attempts to address underlying economic weaknesses. But you can also argue the Government has underestimated public demand for immediate cost-of-living relief.

Overall, the Budget moves New Zealand closer to stabilising debt and returning to surplus, but its success depends heavily on economic growth forecasts, successful implementation of spending cuts, and stable global conditions.

Given weaker growth projections and international uncertainty, achieving surplus by 2029–2030 is far from guaranteed.

As ever, it’s another case of us needing to hope for the best, but prepare for the worst.

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