Budget 2025: Nearly 9000 teens no longer eligible for unemployment benefit under new ‘parent test’
Nearly 9000 young people will no longer be eligible for the unemployment benefit when the Government brings in stricter rules in 2027.
Budget 2025 includes a change which places the responsibility for financially supporting 18- and 19-year-olds back on parents, rather than the state.
Single people in this age group will no longer be eligible for income support if they are not in work or study – and if their parents are capable of supporting them.
The change will not be immediate. From July 2027, eligibility for two entitlements – Jobseeker Support and the Emergency Benefit – will be tightened up with the introduction of a parental assistance test.
The test would consider whether a young person “can reasonably be expected to rely on their parents or guardians for support”, according to Budget documents.
Hamish Fletcher
That's all for our live Budget 2025 coverage today. Thanks for joining us. Pō mārie, good night.
KiwiSaver changes will hurt workers - CTU
Hamish Fletcher
Council of Trade Unions (CTU) director of policy and economist Craig Renney said the planned changes to KiwiSaver would hurt low-income workers the most.
The Government KiwiSaver tax rebate is being halved for all those earning less than $180,000 and dropped completely for those earning more than $180,000.
“Einstein famously said the most powerful force in the universe wasn’t gravity, it was compound interest”, Renney told Heather du Plessis-Allan Drive.
“Even small amounts of change for low-income groups can make a real difference to the amount they can save over time … and we end up paying for it later on in additional support, or housing support. For other income groups it makes a pretty marginal difference.”
However, Renney supported the extension of the retirement savings scheme to 16 and 17-year-olds: “The more we can encourage a culture of savings now the more sustainable the pension will be.”
Budget strikes a balance says former Business NZ boss, but critics slam lack of clarity
Lois Turei
Former Business NZ boss Phil O’Reilly said his old workplace had described the Budget as “credible”, and he agreed.
“They had to thread the needle between fiscal consolidation … and at the same time stay true to their growth agenda, and I think they did a reasonable job of that”, O’Reilly told Heather du Plessis-Allan Drive.
The Incentive Boost would give people the confidence to invest, he said.
The tax break for businesses allows them to deduct 20% of the value of a new asset from their taxable income for that year.
He supported a 20% deduction, compared with the 100% deduction that had previously been offered in some countries.
The latter could encourage “pointless growth”, O’Reilly said.
“You want to incentivise growth, but you want to make it a logical pathway so that I don’t just go and buy five computers. Because that’s pointless, that’s not growth.”
Meanwhile, Craig Renney, director of policy and economist at the Council of Trade Unions, was disappointed that the “taking of the pay equity money” hadn’t gone into things that would benefit the affected workers.
"Instead, we saw benefits being taken from 18 and 19-year-olds.
"Fine, but there’s no clarity as to what parental levels of responsibility look like.”
He described the decision to include incomplete plans in the Budget changes as “very strange”.
“My guess is the politics of that is they’re still working out exactly how they’re going to do that, and how they’re going to communicate that.”
Christine Rankin backs parental financial support for 18 to 19-year-olds
Lois Turei
Former Work and Income boss Christine Rankin has backed the Government's plans, announced in today’s Budget, to return parental financial responsibility for 18 and 19-year-olds not in work or training.
“I absolutely love it,” Rankin told Heather du Plessis-Allan Drive.
She said no 18 or 19-year-old should receive a message that if they don’t make a genuine effort, they shouldn’t worry because the Government will fix it for them.
“And the benefit’s the road to poverty. It’s a terrible situation to allow them to be in when they should be starting their working life, or studying.”
Rankin described the move as “fair, reasonable, and responsible”.
“[It’s] giving exactly the message they need. Labour said, ‘Come in, and we’ll give you absolutely everything, and you can have it as long as you like, and you don’t have to do a thing’.
“How disgraceful is that to anyone, let alone young people.”
Investments prioritised over debt reduction
Lois Turei
Asked why the Government hadn't put the $5 billion saved this financial year towards debt, Nicola Willis said it was because Kiwis would have paid a heavy price for doing so.
"Fewer health services, schools getting cuts to their funding in real terms, I wouldn’t have money to pay teachers more, police wouldn’t get the resources needed, and the Defence Force would continue its slide to becoming more suited to a backwater," the Finance Minister told Heather du Plessis-Allan Drive.
"There are investments that need to be made and we are funding them from savings. That’s the responsible way."
Investment Boost tax incentive expected to drive economic growth
Lois Turei
The Investment Boost tax incentive would boost growth and GDP by about 1% over the next 20 years, with half of that increase occurring within the next five years, Finance Minister Nicola Willis told Heather du Plessis-Allan Drive.
Combined with other reforms, including changes to the Resource Management Act, setting up Invest New Zealand, and encouraging foreign investment, the Government was “doing things that are going to generate measurable growth.”
“But Investment Boost says to every business, if you make a new investment in a new asset, we are going to deduct the cost of that from your tax bill – a 20% deduction. So, if you’re thinking about making an investment, do it, because we’re going to help you out.”
A 100% deduction would have cost the country more than $8.5 billion a year, according to Inland Revenue, Willis said.
“And the advice was it wouldn’t have paid for itself because it starts to incentivise investments that wouldn’t stack up.
“Our advice is 20% was the sweet spot … it will get people investing. If you’re a tradie and you go and buy a ute tomorrow, you’ve now got a 20% deduction on the cost of that ute against your tax bill.”
Plan to keep youth off the dole
Lois Turei
The Government is still working on the fine details of plans aimed at keeping 18 and 19-year-olds off the dole, Nicola Willis told ZB's Heather du Plessis-Allan.
Budget 2025 includes a change that places the responsibility for financially supporting 18 and 19-year-olds back on parents, rather than the state.
“[We’re] still finalising the details of the policy, but the basic concept is this is about helping parents," Willis said.
“I have met parents who say, ‘I’ve got a 19-year-old who spends all day on the couch playing PlayStation, and it’s pretty difficult because you, the Government, send him a cheque each fortnight'.
“Kids should be in training, an apprenticeship or work, and if they’re not, they can’t get the benefit.”
There would be some exceptions, such as in the case of a family breakdown where parents don’t have the means to support their adult children, Willis said.
Asked if parents’ incomes would be means-tested, she said: “That might be part of the test, but we need to make sure it's tight enough so that not everyone gets an exception.
“Because we genuinely want to get those kids into working and training. If you start on a benefit at that age, on average you’re going to spend more than 15 years on a benefit. That is bad news for everyone.”
KiwiSaver tax subsidy halved for most, say Willis
Lois Turei
The Government has halved the KiwiSaver tax subsidy for those earning under $180,000, saying the reduced incentive is still enough to encourage retirement savings, Finance Minister Nicola Willis told Heather du Plessis-Allan Drive on Newstalk ZB late this afternoon.
The annual $521 credit has been scrapped entirely for individuals earning more than $180,000.
“Our judgment was that the [$260] contribution is enough to give people a nudge into saving, who might not otherwise,” said Willis.
“And it keeps people in the scheme even if they go through a period where they can’t make their own contributions, knowing the Government’s going to give them that extra cash.”
Auckland not expecting much, says mayor
Lois Turei
Auckland Mayor Wayne Brown said he wasn't expecting much in the Budget for the city today.
"We look after ourselves," said Brown, who is seeking re-election this year.
"Most of my manifesto asks don’t cost the Government anything ... But I can see investment in developing talent, innovation, technology and science, so that looks promising, as does a focus on overseas investments, trade and infrastructure for growth. Hopefully, the funding won’t get lost in Wellington, as it sometimes does.
"Only time will tell how much of this impacts the real world. Elections are won or lost in Auckland, so I hope for them it will have an impact.”
E tū: Budget 'theft of wages from women'
Lois Turei
New Zealand's largest private sector union, E tū, has described the 2025 Budget as a “direct attack” on working people, particularly women in frontline care and community services.
E tū National Secretary Rachel Mackintosh said: “This Budget is a theft of wages from women.
“The Government is paying for its corporate handouts by stealing from the pockets of caregivers, teacher aides and social workers. It’s a cynical, calculated betrayal.”
The pay equity changes have stopped 33 active claims and raised the bar so high that future claims may be impossible, E tū said in a statement.
“The Government has made it clear: if you’re a woman in a care or community service role, your wages are not a priority.”
Council of Trade Unions claims Budget takes working people backwards
Lois Turei
Craig Renney, economist for the New Zealand Council of Trade Unions, is highly critical of the Budget.
“The Government has promised this would be a growth Budget, yet it has effectively cut the wages of low-income women workers. We know that one of the best ways to stimulate economic growth is by lifting wages – the Government is doing the opposite,” Renney said in a statement.
“The figures released today also showed that the number of people on Jobseekers Support is rising and higher than forecast just last year. Real wage growth is lower than forecast last year – the Treasury itself says the Budget ‘lowers wage growth'."
Renney said it was a Budget that took working people backwards.
“The Budget delivers more cuts to investment, including real-terms cuts to early childhood education funding. New funding for learning support is largely being delivered by cutting funding from other education programmes. Māori development programmes have been cut significantly, as has funding from our media, culture and heritage institutions.
“Promises made in health aren’t provided with new funding and the destruction of the pay equity process will mean we will continue to lose health workers to Australia, putting further stress on the system.
“Forecasts show we will continue to miss our child poverty targets over the next four years and we will see thousands of families lose essential income due to cuts to Best Start and Working for Families. The Government is taking money from unemployed 18- and 19-year-olds, while investing nothing in action on climate change.
“Overall, this is a Budget that works by taking away from some of the poorest people in New Zealand to fund tax cuts for multinationals, increased investment in Corrections, the failed charter schools project, and more spending on defence.
“This is a Budget with its priorities all wrong – and working people will be paying the price."
Lois Turei
Budget breakdown: The 10 things you need to know
Lois Turei
Budget 2025 is chock-full of new spending initiatives paid for in part by massive cuts and changes to pre-existing government programmes and schemes, including controversial adjustments to the pay equity regime. Read the full story here.
Lois Turei
Budget debate adjourned
Lois Turei
The Budget debate has now adjourned, and Leader of the House Chris Bishop is calling for the House to go into urgency to pass the bills relevant to the actions within the Budget.
Ferris makes plea to invest in future of young Māori
Lois Turei
Takuta Ferris is calling for young Māori to receive investment in their future and support into employment, instead of record-high unemployment, and relief from rent and cost-of-living pressures.
"They deserve a Government compassionate enough to recognise their own shortcomings."
Ferris hoped MPs would have the courage to consider the needs of others, not themselves, the needs of future generations and the collective truth of New Zealand's history, rather than an "imaginary history".
Monthly inflation data from 2027
Lois Turei
New Zealand will get monthly inflation data in 2027. Currently, inflation data are released quarterly, with a significant delay.
Stats NZ will receive $16.5 million over four years to begin publishing monthly Consumer Price Index (CPI) data from January 2027.
Lois Turei
Hipkins nicknames Budget 'The Worth-less Budget'
Lois Turei
Speaking to Newstalk ZB's Heather du Plessis-Allan this afternoon, Labour leader Chris Hipkins nicknamed the Budget “The Worth-less Budget”.
“It’s saying to women they’re worth less, it’s saying to all Kiwis when you reach retirement, your KiwiSaver’s going to be worth less," he said.
“If you’re an 18-year-old on the minimum wage, over $60,000 has just disappeared from your retirement savings because of the changes the Government’s made.”
Increasing employer and employee contributions was beneficial, but this had been effectively cancelled out by the halving of the $521 tax credit.
Planned changes to the unemployment benefit, where the eligibility of those aged 18 and 19 would be based on their parents' means was “basically saying you’re not an adult until you’re 20”, Hipkins told du Plessis-Allan.
“You’re saying to parents ... you’re liable [for your children] till they’re 20? That’s a fairly high threshold.”
TMP: Budget fails to account for the 'one million' Māori in NZ
Lois Turei
MP Tākuta Ferris, speaking on behalf of Te Pāti Māori during the House Budget debate, said the Budget failed to account for the “one million” Māori in New Zealand.
He argued that, based on population, 20% of Government spending should be directed to Māori – but that this was not the case.
Ferris went on to highlight how Māori had historically developed and sustained their economic activity, both before and after colonisation.
Ferris lamented that while the Māori population had recovered, its economic success had not kept pace.
He went on to highlight the longstanding disadvantages and unfair treatment of Māori in the post-war period, particularly the division of land.
Parliament to receive $22m fire upgrade and funding boost for staff
Lois Turei
Parliament will get a $22m upgrade to its fire sprinkler network, as well as new heating infrastructure and ground-floor windows.
Parliament has also been allocated nearly $1 million per year to hire and retain staff.
Hipkins calls Budget 'underwhelming', slams oil funding as wasteful
Lois Turei
Labour leader Chris Hipkins has described the Budget as “underwhelming if you’re wanting a long-term vision for the country”.
“It parks a whole lot of the big challenges the country faces further into the future,” he told Heather du Plessis-Allan Drive on Newstalk ZB.
He criticised the $200 million allocation for oil and gas exploration, calling it “potentially the Government flushing $200 million down the drain”.
“Yes, it’s a small amount. It’s also the Government taking on some of the risk for something that may never eventuate ... [saying] ‘go drill, we’ll pay for some of it’, but there’s no guarantee they’re gonna find anything.
“For the last 20 years, they’ve been looking and they haven’t found a commercially developmentable find.”
Hipkins said New Zealand currently had an abundance of renewable energy.
“One area where I do agree with [NZ First MP] Shane Jones: supercritical geothermal – basically the steam under the ground – we’ve got an abundance of that and if we can crack the technology, we’re sorted as a country. If I was putting $200 million into some big, bold energy thing, I’d probably put it into that.”
Jones backs mining, mocks Greens and pivots to rail
Lois Turei
On Budget initiatives, Shane Jones said at their centre was the challenge that “hard trade-offs” were necessary for economic growth.
“Do you want the lights on?” he asked, emphasising the need for mining and other energy-related developments.
Jones claimed Green Party protesters planned to picket outside ANZ Bank next week in opposition to bank lending for projects such as mining. In response, he said he would turn up the day before with his megaphone to tell Kiwis the Green Party had no moral authority to bring ruin to regional New Zealand.
Adopting a more comical tone, Jones joked that NZ First leader Winston Peters had only informed him late in the day that he would be speaking. He then shifted to a signature NZ First issue, highlighting the Government’s investments in rail.
Secret ferry funding
Lois Turei
Minister for Rail Winston Peters has secured additional funding in the Budget for replacing the Cook Strait ferries.
However, the exact amount remains undisclosed, as it is deemed commercially sensitive.
The funding is earmarked for the “procurement of two rail-enabled ferries and associated infrastructure at the Wellington and Picton ports”.
'No more hakas of victimhood'
Lois Turei
Jones said "far too many Kiwis" believed it was the state's responsibility to cater to their lifestyle.
"No, it is not. If you do not change your lifestyle in Kaikohe, the cops are coming for you."
Criticising Te Pāti Māori, Jones called for "no more hakas [sic] of victimhood" – a reference to the haka performed by three Te Pāti Māori MPs in the House, which led to a referral to the Privileges Committee.
He added that many Māori were proud of the traditions and responsibilities of being a Member of Parliament.
Shane Jones waves crude oil in House, mocks Greens and Labour
Lois Turei
NZ First MP Shane Jones, now sporting a red tie instead of the blue one he wore earlier in the day, began his speech holding a small bottle of crude oil, referring to the Budget as “the real oil” – a nod to the $200 million allocation for further oil and gas production.
Jones then asked the Speaker for permission to “take the cap off and ask the Green Party to sniff it". Only MP Lan Pham remained seated in the Greens' section of the House.
“To remind Labour of what they could have had, I’ve got a red tie,” Jones joked, before gesturing to his light blue suit to highlight his party’s coalition ties with National.
Every Budget item in one interactive
Lois Turei
This interactive graphic shows how spending is shared around. See how the Budget’s major spending categories have changed since last year’s Budget.
Lois Turei
Act leader slams Greens, Te Pāti Māori
Lois Turei
Seymour noted how the Budget hadn't been written by the "post-modern unicorn chasers" of the Opposition, referencing the Green Party’s alternative Budget and criticising the level of spending it proposed.
"The Greens are intellectually bankrupt."
Turning his attention to Te Pāti Māori, Seymour said: "Te Pāti Māori probably don’t know what a Budget is. They show up to Parliament for TikTok, not for the good of all New Zealanders."
Te Pāti Māori MP Mariameno Kapa-Kingi laughed sarcastically at Seymour's comments.
Lois Turei
Seymour takes the floor
Lois Turei
Following Swarbrick, Act leader David Seymour is now speaking and claimed Swarbrick's speech showed how you could always tell when a person's speechwriter didn't like them.
He quickly turned to discussing the realities of a Budget and the Government's power to raise money and create debt for future generations.
"Every Government like this one must have a path to return to surplus and start to pay debt down."
He acknowledged how today's Budget spends more than what the Act alone would have spent, but said it proved the Act had had an impact on Government spending, which the party sought to limit.
Wealth inequality a theme in Swarbrick speech
Lois Turei
The majority of Chlöe Swarbrick's speech referenced the wealth inequality in New Zealand, decrying Act as the "most radical right-wing party" created and how it pushed to sell publicly owned assets.
"They are making New Zealanders pay more while they are doing less," Swarbrick said of the Government.
She argued it was "common sense" that everyone had a dry home, could access dental care, had a stable climate and could plan for a future based on Kiwi "know-how."
Audrey Young: Pay equity albatross lingers for Nicola Willis
Lois Turei
"We knew before the Budget what it was not going to be – rainbows, unicorns and splashes of cash for the Government to kiss away every taxpayer tear." Read the full story here.
'Our time is only valuable if it turns a profit'
Lois Turei
Green co-leader Chlöe Swarbrick claimed the Government wanted people to be scared of each other, believing there wasn't enough to go around.
"They want you to believe our time is only valuable if it turns a profit. This Government knows the cost of everything and the value of nothing."
Swarbrick spoke of the 500,000 New Zealanders using foodbanks every week.
Swarbrick: 'So much for the no BS budget, eh'
Lois Turei
Green Party co-leader Chlöe Swarbrick, as she began her speech, found it amusing that Christopher Luxon had spent much of his speech discussing her party's Budget.
Recently, Government MPs joked that Swarbrick spoke loudly in the House, and many referenced that as she began speaking. Winston Peters put his fingers in his ears before walking out of the House, like many other Government MPs.
Swarbrick said the Government was taking money away from families with young children through its BestStart changes and "setting it on fire" through its $200 million co-investment in oil and gas production.
She argued that her party, through its Budget, chose to offer free healthcare and early childhood education and other measures to support Kiwis.
"We chose to put the wellbeing of everybody over the profit of a few. So much for the no B.S. Budget, eh."
Budget 'getting NZ back on track'
Lois Turei
Ending his speech, Luxon said it had been another "excellent Budget from Nicola Willis", noting the Government had had to "make tough choices like all Kiwi families".
"Budget 2025 is another excellent step in that direction and all part of getting New Zealand back on track."
Lois Turei
Coalition a 'Government of the workers' – Luxon
Lois Turei
"National backs growth and I'm telling you, Labour wants to tax it," Luxon said.
Moving on from economic growth, Luxon spoke of cost-of-living support while referencing the previous Labour Government, saying it led an economy that punished Kiwis. Deeming his Government the "Government of the workers", Luxon said wages had grown more under his Government.
He noted there was more work to do, citing the Working for Families changes, which would give about $14 per fortnight to about 140,000 families.
When Willis left the House
Lois Turei
Lois Turei
Lois Turei
Luxon is seven minutes into his Budget speech and has yet to reference his Government's Budget, continuing to speak about Labour's old tax policies. He predicted Labour and the Greens would tax more, spend more wastefully, and rack up "a lot more debt".
Luxon has now spoken "enough about the Labour Party", moving on to Willis' efforts in delivering the Budget. He called the Budget responsible and focused on growth, supporting people with the cost of living.
Ingrid Leary stops Luxon's flow
Lois Turei
Labour MP Ingrid Leary managed to stop Luxon's flow, pointing out a slip-up where Luxon had mentioned Barbara Edmonds by her first name only.
Despite the interruption, Luxon has pressed on and is now talking about the Green Party's recent alternative Budget. Luxon predicted Hipkins would rule out all the Green tax policies and then produce a "broken tax plan".
Luxon rallies MPs against Opposition leaders
Lois Turei
Christopher Luxon claimed there were differences between Hipkins and his finance spokeswoman Barbara Edmonds. He then moved on to whipping up his MPs by asking them to close their eyes and imagine the leaders of the Opposition parties sitting around the Cabinet table.
The likes of Simeon Brown and Paul Goldsmith took the direction literally, closing their eyes while Brown cried "No" as Luxon mentioned each leader's name.
"They can't run a bath!" Luxon said.
Luxon derides Labour's shambolic start of year: Calls Hipkins 'Mr Bojangles'
Lois Turei
Prime Minister Christopher Luxon began his speech by stating that it was a "shambolic" start to the year for Labour, claiming the party had "no policies and no plan".
He criticised Hipkins as having no substance, calling his opposite "Mr Bojangles".
Several Labour MPs are calling out Luxon, urging him to discuss the Budget. Hipkins has now left the House, heading out to speak to the media.
'New Zealanders deserve better'
Lois Turei
"Jobs, health and homes should be the priority for this Budget, and it simply wasn't," said Hipkins.
He said he looked forward to seeing one-term backbench National MPs return to their electorates to explain the Budget and "why they should be grateful", once again referencing the pay equity changes.
Hipkins said the Government was offering "austerity, cuts, division, and divisive politics".
"New Zealanders deserve better."
'Growth in all the wrong places'
Lois Turei
Hipkins argued the Government's absence of a plan was proven in its KiwiSaver changes, which include halving the Government's contribution. "If there is one message New Zealanders have heard loud and clear, it's that they cannot be trusted when it comes to the national treasure that is our KiwiSaver."
He claimed an 18-year-old would be $66,000 worse off in their retirement as a result of the changes. Willis has now returned to the House as Hipkins reaches the final minutes of his 20-minute speech.
"It is growth in all the wrong places," Hipkins said of the so-called Growth Budget.
"Bring back David Cunliffe," NZ First minister Shane Jones called out to Labour.
"Jobs, health, and homes should be the priority for this Budget, and it simply wasn't," Hipkins said.
Hipkins laments homelessness, hunger
Lois Turei
Hipkins believed the Government was encouraging people to move offshore, saying the Government was "offering them a plane ticket".
Hipkins returned to pay equity, stating: "These are all choices the Government has made."
He lamented how more people were homeless, more children were going hungry, and more women were being paid less. "These are the Government's decisions and their choices, and they have made bad ones."
Chris Hipkins: Budget is 'a scramble, without the lollies'
Lois Turei
"This is a scramble, without the lollies," Labour leader Hipkins said, accusing the Government of using "smoke and mirrors" to hide its cuts. He stated that the Budget would be remembered as the one that left women out, citing the savings gained through pay equity changes.
He claimed the Government had become adept at mining the pits of division. "You don't know what a woman is," Winston Peters called across to Hipkins. "Come on, what is a woman?"
"All of them being told loud and clear that they have to settle for less pay than men so the Government can balance its books," Hipkins said of the pay equity changes. "The country that was the first to give women the vote has nothing to be proud of today."
Referencing Willis' "no B.S. Budget" title, Hipkins argued B.S. stood for "Big Subsidies," noting the $200 million co-investment fund set aside to boost oil and gas mining.
Hipkins claimed the Government's Working For Families changes would leave Kiwis financially worse off. "They are choosing austerity and cuts, and austerity is exactly what it is."
Putting Budget together 'not easy', says Willis
Lois Turei
"Putting this Budget together wasn't easy," Willis said.
She noted that it had to strike a careful balance between investing in public services and driving long-term reforms to boost investment and productivity.
Willis spoke of encouraging Kiwis to save more and the landmark investment in defence, while also addressing rising debt. "Every Kiwi can know that this is a Government that has their back."
She has now finished her speech, giving Luxon a hug and a kiss on the cheek. Government members are standing and applauding her, apart from some Act Party MPs.
Extra funding for cyclone recovery in Hawke's Bay and East Coast
Lois Turei
Transport Minister Chris Bishop has allocated an additional $219 million over three years for five councils in Hawke's Bay and the East Coast to complete recovery works on local roads damaged by Cyclone Gabrielle in 2023.
“The NZ Transport Agency will distribute the funds to local councils to complete recovery works across affected local roads. This work is vital to restoring access to goods, services and employment opportunities to impacted communities in the North Island.”
This is in addition to nearly $1 billion invested in recovery and resilience projects in regions affected by Cyclone Gabrielle and the Auckland Anniversary Weekend floods, he said.
Key retirement recommendations adopted
Lois Turei
Retirement Commissioner Jane Wrightson says she is pleased the Government has taken on some of the key recommendations made in 2024, including the higher default contribution rate of 4% and extending employer contributions to those aged 16 and 17.
It had also requested that the employer contribution be extended to those over 65, but the Government has not made that change.
However, Wrightson said that the reduction in government contribution will hit low-income earners, Māori, women and the self-employed the hardest.
“It’s a shame there are so few government incentives for a scheme that underpins private saving for retirement. I would at least have liked to see some of the savings from reducing government contributions be applied to serving those groups where we see the widest retirement savings gaps.”
Wrightson said she also hoped employers would pass on the higher contributions to staff rather than including them as part of a worker's total remuneration package.
Government addresses climate finance shortfall
Lois Turei
In foreign affairs, Willis referenced how the Government has addressed a funding shortfall – but only by half – to help achieve New Zealand's climate finance target under the Paris Agreement, which Foreign Minister Winston Peters has regularly railed against.
Budget 2025 allocated $367 million over the forecast period to continue the then-Labour Government's $800 million for the International Development Cooperation programme, dubbed a fiscal cliff as it was set to run out in January next year and last year's budget hadn't confirmed further funding.
However, the annual spend of $105 million from 2026/27 was only half of the $200 million necessary per annum. The Budget documents stated the funding would be used for projects focused on the Pacific but also noted it would "not be exclusively focused on meeting climate finance objectives."
Willis added that Peters had made a "very strong case" for more foreign affairs funding. Willis didn't commit to providing it, saying it would be "looked at in the future."
Government to invest in new gas fields
Lois Turei
New Zealand First’s Shane Jones has secured a $200 million contingency fund over four years for the Government to invest in new gas fields. The investment will come on top of the Government’s decision to repeal the offshore oil and gas ban.
Despite the repeal, there has been a lack of interest in investing in new offshore oil and gas development, partly because over the last few years, there has been a lack of new gas discoveries, and partly due to “sovereign risk” reasons – the term used to describe the fear that a future Government would ban exploration again.
Jones said the investment from the Crown would mitigate this by giving the Crown a stake in any new oil and gas finds. Jones mentioned that while the structure of the investments was still being worked out, there was a “willingness, subject to Cabinet consideration, for the Crown to take a commercial stake of up to 10-15% in new gasfield developments”.
“Talk is cheap, but having skin in the game as a cornerstone investor in production demonstrates our own commitment to meeting our future gas needs.
"We are looking to take a stake in the development of the next Pohokura, Kupe, Mangahewa or Tūrangi to accelerate the investment needed to support our energy system,” Jones said.
Increase to subsidy for private schools
Lois Turei
The National-Act coalition agreement included a commitment to lift the Government’s subsidy for private schools. The subsidy, which began in 2010, reflects the fact that children in the private school system do not benefit from most education spending, despite their parents likely paying taxes.
The Budget will increase this subsidy by $15.7 million over four years, raising annual funding for the scheme to $46.2m. Seymour said: “Inflation and costs for schools have increased, and independent school enrolments have grown. This means schools receive funding that is worth significantly less than they need.”
Seymour noted that in 2010, when the funding line began, there were about 27,600 students enrolled in private schools. The figure was 33,000 in 2024.
Big learning support investment
Lois Turei
The Government delivered a surprise with a significant increase in learning support, part of the Government's social investment approach. The Government has allocated $266 million over four years to extend the Early Intervention Service (EIS) from early childhood education to Year 1 of primary school, creating 560 new full-time equivalent staff positions.
The service intervenes early with children who require extra support during their educational journeys. There is $122 million over four years to address the increased demand for resources for students with high and complex needs, $192 million to ensure that all Year 1-8 schools and kura have funding for a learning support coordinator, and $43 million for speech-language therapists.
Signs of life in the economy: More pain for the unemployed – but some good news for home owners
Lois Turei
The economy is expected to show some growth in the next few years – a marked change from this year. GDP is projected to grow at 2.9% in the next year and 3% in the year to June 2027, followed by 2.9% growth in the year to June 2028.
On a per-person basis, the economy will not rebound to its 2022/23 peak until about 2028. There is further bad news for job seekers, with the Treasury revising its unemployment rate forecast upward. In December, it was expected to have an unemployment rate of 4.8% in the coming year. That figure is now 5%. Unemployment is also expected to be higher in 2027 at 4.8%, up from Treasury’s December forecast of 4.5%.
Wage growth has been revised downward to 2.6% in the coming year from 2.9%, and 2.7% the year after, down from 2.9%.
House prices are expected to recover strongly, however, with growth of 6.7% in the year to June 2027, a significant increase from Treasury’s December forecast of 5.8%.
The rate of growth remains high in 2028 at 6.2% and in 2029 at 5.3% – those forecasts are up from December forecasts of 5.1% and 4.3%.
Grappling with the cost of the crime crackdown – $400m for prisons
Lois Turei
The Government has had to top up the Corrections Budget by $393 million over four years to cope with a prison population of up to 10,860 prisoners by June 30, 2026.
The Government is spending $448 million more each year on Corrections than in the last full year of the Labour Government. This is the second consecutive year the Government has had to top up Corrections with funding for the increased prison population.
House prices tipped to rebound with 5.6% growth by 2026
Lois Turei
House prices are expected to start rising strongly again, by 5.6% in a year. The 2025 Budget Economic and Fiscal Update notes that the housing market has started to stabilise after prices weakened through 2024, amid rising listings and modest sales.
Recent months have seen slight price rises alongside increased market activity. As lower interest rates feed through and the labour market strengthens (from mid-2025), annual house-price growth is forecast to rise from 0.3% in June 2025 to 5.6% in June 2026, before easing to 5.3% by June 2029.
Willis: Education key to improving NZ’s prosperity
Lois Turei
Turning to something "close to my heart", Willis spoke of education, where she said that improving outcomes from the education system was the most important thing to advance if New Zealand's prosperity was to improve.
"Improvements to our learning support system are long overdue," Willis said as she welcomed the most significant increase in learning support funding in a generation.
She spoke of children with additional needs having enormous potential, arguing that the funding would help those kids realise this potential.
"This investment will change lives."
Funding boost for Nelson and Wellington hospitals
Lois Turei
In health, Willis is lauding the announced funding for upgrades to Nelson Hospital and Wellington Hospital – the latter set to receive funding for a new emergency department.
Reducing the cost of living
Lois Turei
Willis is discussing the Budget’s efforts to reduce the cost of living.
One of those measures is extending the duration of a prescription from three months to 12 months, which was met with applause from the Government benches.
SuperGold cardholders will also benefit from a more generous rebate scheme, a policy Willis said originated from the National-NZ First coalition agreement. NZ First leader Winston Peters wore a large smile at the announcement. Prime Minister Christopher Luxon leaned over, and the pair shared a word.
KiwiSaver shake-up: More contributions, less from Government under new Budget plan
Lois Turei
On KiwiSaver changes, Willis said many had “modest” balances and that today’s proposed changes would encourage people to save more. The increased contributions from employees and employers would be phased in over three years, with opt-out clauses available for employees.
She said the changes would help people in their retirement but also enable greater first-home deposits.
The changes include reducing the Government’s contribution. Willis said the advice she had received indicated this move was unlikely to impact KiwiSaver balances significantly. It will come into effect from July this year.
“Building the financial security of New Zealanders,” Willis said of the policy.
She said the savings gained through the change would go towards initiatives related to education, health, and law and order.
Cost-of-living support: Working for Families changes – $14 a fortnight
Lois Turei
Social Development Minister Louise Upston announced a tweak to Working for Families tax credits.
The abatement threshold – the level at which the tax credit is slowly withdrawn – will be lifted from $42,700 to $44,900.
This means that people will keep more of their tax credits as their income from work rises with wage inflation. The increase is worth $14 a fortnight on average, and up to $23 a fortnight. The cost of the change is $205 million over four years.
However, the Government is also raising the abatement rate from 27% to 27.5%. This means that when people’s incomes rise, they will lose their tax credits more quickly than before. It marks a steady increase to the abatement rate over successive Governments. Not long ago, it was closer to 20%.
Rate relief for superannuitants
More SuperGold cardholders will also be able to get rates relief.
The Government is increasing the threshold at which SuperGold cardholders are eligible to receive rate relief from $31,510 to $45,000 – approximately the rate for a couple receiving superannuation. The maximum rebate will increase from $760 to $805.
The changes mean that every SuperGold cardholder earning only New Zealand Superannuation, who has rates higher than $2000, will be eligible for the full rebate. SuperGold cardholders with incomes higher than $45,000 may get a smaller rebate.
The change costs $154m over four years.
Willis to her children: ‘This Budget will be good for you – and all our kids’
Lois Turei
Willis said the Government was taking a deliberate approach to fiscal consolidation.
“Some say we should keep borrowing forever ... that would be the height of irresponsibility ... we owe better to our kids.”
Looking up to her four kids and husband sitting in the public gallery, Willis said to her children, “I know Mum’s been busy lately,” apologising for missing one of her children's shows.
However, she maintained that the Budget would improve their future and that of all New Zealanders.
“This Budget will be good for you and all our kids.”
On the Government’s Investment Boost policy, Willis said it would cost $1.7 billion per year in lost revenue. Still, her message to workers, such as farmers and tradies, was that the Government was helping them invest in their future – and that of the country.
Parents to support unemployed 18 and 19-year-olds under new benefit rules
Lois Turei
From July 2027, single, unemployed 18 and 19-year-olds who are not in study or work will no longer automatically qualify for Jobseeker Support or the Emergency Benefit.
A new parental assistance test will be introduced, meaning their parents may be expected to support them instead.
Social Development Minister Louise Upston said: "With this announcement, we’re clearly stating that 18 and 19-year-olds who don’t study or work and can’t support themselves financially should be supported by their parents or guardians, not by the taxpayer."
Savings of about $5.3b per year, beefing up new spending
Lois Turei
Nicola Willis spoke of the Government’s “savings” of about $5.3 billion per year, which had beefed up her new spending.
“We take seriously our roles as custodians of taxpayer money," she said.
“Much of this had come from the controversial pay equity reforms.
"It had given the Government an extra $12.8 billion to play with at this Budget.”
She assured the House that the Government retained funding in contingency for future pay equity claims.
'We're taking responsibility for cleaning up the mess'
Lois Turei
"The last Government was living beyond its means, loading up the credit card New Zealand couldn't afford," Nicola Willis said.
Willis said her Government was "taking responsibility for cleaning up the mess" through stabilised debt, for one.
She said approaches that included higher taxes would put economic recovery at risk, saying it would encourage people to leave New Zealand.
'Austerity Budget', says Labour
Lois Turei
In its first response to Budget 2025, Labour has labelled it an “Austerity Budget that leaves women out".
“After a year of job cuts, now we are on to pay cuts and stealing from our kids’ retirement funds,” Labour leader Chris Hipkins said.
“The Government has taken $11 billion ... lifted from women’s pay, and used it to add up its Budget.
"Christopher Luxon’s decision to cut the Government KiwiSaver contribution will steal $66,000 from the retirement savings of an 18-year-old entering the scheme today.
"Women, young people and the working public are paying for handouts to landlords, multinationals and tobacco companies.
"Today, we can add oil and gas companies to that list.”
Willis opens Budget debate with te reo, defends ‘responsible’ plan for NZ’s future
Lois Turei
Willis is now leading off the House debate of the Budget. She has started with a brief passage in te reo, which she later explained as an honour to present today's Budget, describing it as a "responsible Budget to secure New Zealand's future".
She maintained that it increased spending in areas such as health and education, while reducing debt.
"The Government is not promising today's Budget will solve all of New Zealand's problems."
Lois Turei
Finance Minister Nicola Willis has unveiled what she's calling a "true-blue Budget" – with changes aimed at boosting savings and supporting business.
Key takeaways:
• KiwiSaver changes: The Government is halving its contribution to people’s KiwiSaver accounts. Currently, people saving in KiwiSaver can get $521 a year from the taxpayer: this has been cut down to just $260.72.
• Business tax relief: A $6.6 billion tax incentive has been unveiled for businesses. allowing them to deduct 20% of a new productive asset’s value from their tax return.
• Infrastructure focus: A $2.7b boost for roads, schools and hospitals – part of the Government’s plan to “build our way out” of the downturn.
• Student loans: Borrowers will also start paying more, with the Government freezing the repayment threshold, which usually (though not always) rises with inflation, saving $64 million. Every dollar a student loan borrower earns over $24,128 will pay 12 cents off their student loan.
• Child payments: The Best Start payment, which offers new parents a weekly payment for their children, will now be means-tested. Currently, all parents receive the payment in the first year after having a child; the payment will now be means-tested for all three years, saving $211m.
Willis is pitching this as a responsible and growth-focused Budget, though Opposition parties say it lacks ambition on climate and inequality.
KiwiSaver slashed, Best Start payments cut
Hamish Fletcher
Here is a quick summary of what's in the Budget:
The Government is halving its contribution to people’s KiwiSaver accounts. Currently, people saving in KiwiSaver can get $521 a year from the taxpayer: this has been cut down to just $260.72.
The Best Start payment, which offers new parents a weekly payment for their children, will now be means-tested. Currently, all parents get the payment in the first year after having a child – the payment will now be means-tested for all three years, saving $211 million.
A $6.6 billion tax incentive has been unveiled for businesses, allowing them to deduct 20% of a new productive asset’s value from their tax return.
Student loan borrowers will also start paying more, with the Government freezing the repayment threshold, which usually (though not always) rises with inflation, saving $64 million. Every dollar a student loan borrower earns over $24,128 will pay 12 cents off their student loan.
Here we go!
Hamish Fletcher
We're less than 15 minutes away from Nicola Willis' big reveal.
Join Ryan Bridge at 2pm for the NZ Herald's Budget 2025 live show at nzherald.co.nz (that's where you are right now – so visit our homepage to view it). If you can't see the live video, please refresh your browser or app. The video show kicks off 2pm sharp.
Call for pay equity
Alanah Eriksen
Protesters at Parliament are holding signs calling for pay equity.
The changes would realise “billions” in savings, which could be funnelled back into the Budget.
Protesters outside Parliament
Alanah Eriksen
As the Budget 2025 lock-up is under way, photographer Marty Melville captured these protesters in front of Parliament.
Lois Turei
Protesters have gathered in front of Parliament ahead of the Budget announcement.
National MP gets his boogie on for the Budget announcement
Lois Turei
Seymour: 'We've turned the corner' – Act leader teases Budget wins for taxpayers
Lois Turei
Lois Turei
All eyes on Willis: Budget 2025 on its way
Lois Turei
Finance Minister Nicola Willis heads into the lock-up at Parliament, where Budget 2025 will soon be unveiled. The countdown to 2pm begins.
Davidson: Budget must serve people, not profit
Lois Turei
Green Party co-leader Marama Davidson has come out swinging ahead of Budget 2025, warning that Government spending must prioritise communities over corporate greed.
In a passionate opinion piece, she argues that underinvestment in housing, climate resilience and public health is leaving too many whānau behind, while the wealthiest continue to benefit from tax breaks and fossil fuel subsidies.
“This Budget must put people before profits,” she writes. “If it doesn’t, it will deepen inequality and further erode our collective wellbeing.”
Read the full story here.
Are we really headed for a debt disaster?
Lois Turei
NZ Herald contributor Toby Moore isn’t buying the Government’s Budget doom narrative. In his latest opinion piece, he argues the “debt ceiling” fears are overblown – and says comparisons with household budgets are misleading at best.
Moore points out that while it’s politically convenient to talk tough on debt, New Zealand’s public finances are in better shape than we’re being told. He warns against short-term fiscal tightening that could ultimately harm growth and services in the long term. Read the full story here.
Lois Turei
Lois Turei
Lois Turei
Inside Economics: Everything you need to know about the Budget
Lois Turei
NZ Herald Business Editor at Large Liam Dann says today we will find out if we’ve been naughty or nice. Will it be an austere Budget, or not austere enough? Full story here.
'Pay attention': Shane Jones hints at lower mining royalties in Budget
Lois Turei
Resources Minister Shane Jones has hinted at changes to mining royalties in today’s Budget and has reached a compromise with the mining industry to allow the foundations of oil pipes to remain in the seabed after drilling is finished.
He told Newstalk ZB’s Ryan Bridge that, if New Zealanders were not happy about using coal, other ways would have to be found to boost the gas industry. Read the full story here.
Listen: Health services can't be delivered without adequate funding
Lois Turei
All quarters of the health service need funding, not just lip service. That's the message from the Nurses Society ahead of today's Budget announcement.
KiwiSaver shake-up and tax sweeteners on the cards?
Lois Turei
As Finance Minister Nicola Willis prepares to unveil Budget 2025 at 2pm, the NZ Herald's Wellington business editor, Jenée Tibshraeny, has the inside word on what to watch for – including potential KiwiSaver tweaks, tax write-offs for small businesses and a few surprises aimed at middle-income voters.
From changes that could make it easier for first-home buyers to access their savings, to targeted tax breaks and "fiscal rabbit" chatter out of the Beehive, it’s worth keeping a close eye on these signals. She explores the following questions:
- How much will a tightening of the pay equity regime save?
- How will KiwiSaver be changed?
- Will taxes be tweaked to support economic growth?
- Will a return to surplus be in sight?
- How different could things be if Treasury's forecasts were wrong?
Read Jenée Tibshraeny's full preview here.
Budget 2025
Andrew Laxon
- Under the 2025 Budget, the Government will halve its contribution to individual KiwiSaver accounts.
Weekly Best Start payments for parents will be means-tested.
Parents will be responsible for unemployed 18 and 19-year-olds.
Around 142,000 families will get an extra $14 a fortnight under Working for Families.
Medicine prescription durations will be extended from three months to 12.
A $6.6 billion tax incentive has been unveiled for businesses.
Student loan borrowers will also start paying more.
$2.5b has been allocated to education, including a $380m boost to learning support and $15.7 million for private schools.
More SuperGold cardholders will also be able to get rates relief.
Roads, schools and hospitals will get a $2.7b boost.
More than $30m is being devoted to bootcamps for recidivist youth.
RNZ has had funding slashed by $18m.
Read Jamie Ensor's story on 10 things you need to know from the 2025 Budget.
The Herald's interactive shows how the spending was shared around.
Jenée Tibshraeny has described it as Willis delivers 'true blue' Budget
Adam Pearse explains where the Government cut $21b.
“With this announcement, we’re clearly saying that 18- and 19-year-olds who don’t study or work and can’t support themselves financially, should be supported by their parents or guardians, not by the taxpayer,” Social Development Minister Louise Upston said.
The minister’s office said around 17,800 people aged 18 and 19 would not be eligible for Jobseeker Support in the first two years after the change.
It would not apply to people under 20 years old who were married, in a civil union or de facto relationship.
Young people could not expect to automatically go on to a benefit, Upston said. The change would strengthen financial incentives to work or pursue education or training.
Explaining the rationale for the change, Upston said the purpose of the welfare system was to support those who needed it the most.
Budget documents showed that it was forecast to save the Government $84 million a year from 2027.
Upston cited forecasts which showed that people under the age of 25 on Jobseeker Support would spend an average of 18 or more years on a benefit over their lifetime.
“This is a human tragedy,” Upston said. “We need to focus on the potential of one of New Zealand’s most powerful assets – our young people, and that’s why we are taking action.”
The Government previously made several measures targeted at young beneficiaries, including a phone-based employment case management service, more places for job coaching, more work seminars and a traffic-light system designed to hold them to their obligations.
Green Party social development and employment spokesman Ricardo Menéndez March said the Government was “pulling the rug” on young people receiving income support.
“The Government has just told teenagers doing it tough that they are on their own. A lot of teenagers having to rely on benefits for support do not have family to lean on – the Government knows this, it just doesn’t care.”
It comes as Treasury expects unemployment to worsen over the next few years.
The jobless rate was now expected to be 5% over the next year, up from a forecast in December of 4.8%.
In 2027, unemployment is expected to be 4.8% – up from earlier forecasts of 4.5%.
Speaking on Newstalk ZB this evening, Labour leader Chris Hipkins criticised the planned changes.
Eligibility for those aged 18 and 19 based on their parents’ means was “basically saying you’re not an adult until you’re 20”, Hipkins told Heather du Plessis-Allan.
“You’re saying to parents ... you’re liable [for your children] till they’re 20? That’s a fairly high threshold.”
Do you have questions about the Budget? Ask our experts – business editor at large Liam Dann, senior political correspondent Audrey Young and Wellington business editor Jenee Tibshraeny – in a Herald Premium online Q&A here at nzherald.co.nz at 9.30am, Friday, May 23.