2021 New Zealand budget

The budget is for the fiscal year from 1 July 2021 to 30 June 2022. This is the fourth budget of the Sixth Labour Government and the first budget of Labour's second term in office, in which they have a parliamentary majority, making this the first budget where the Labour Party has been the sole party behind the creation of the budget. The impact of COVID-19 on the economy has led to an increase in government borrowing, with government debt expected to hit NZ$166.2 billion by the end of the 2020/21 fiscal year; before the pandemic it was at $57.7 billion. The 2020/21 fiscal year ends with a forecasted budget deficit of $21.6 billion. The operating allowance for this budget is $3.8 billion per year. == Major announcements ==

Education A total of $1.4 billion will be allocated over four years to operational funding for schools and early learning centres. Environment • $67.4 million over four years towards a carbon-neutral Government • $85 million for building new facilities at Hillside Engineering in Dunedin to assemble 1,500 wagons. Welfare A total of $3.3 billion will be allocated over four years to boost benefit rates. • Weekly benefit rates will increase by $32–$55 by April 2022 • First part will be all benefits increasing by $20 in July 2021 • Families with children will receive an extra $15 per adult per week • Sole parent living support rises $36 per week • Student support living costs will increase by $25 in April 2022 • Jobseeker benefit increases $55 per week for couples and $48 per week for single people == Forecasts ==

The deficit is forecast to reach $2.3 billion in fiscal year 2024/25, with Net Core Crown debt forecast to go up by around $100 billion by that time, with a peak of 48% of national GDP in the 2022/23 fiscal year. Unemployment is forecast to reach around 5.2% in June 2021 before going down to around 4.2% in 2025. == Reactions ==

Prime Minister Jacinda Ardern stated that the budget sets New Zealand up to recover from COVID-19 and have the country "[be] stronger than when [it] entered the pandemic", a statement echoed by Social Development Minister Carmel Sepuloni. Grant Robertson stated that "this is the biggest lift in benefits in more than a generation", criticising the 1991 budget. Green Party co-leader Marama Davidson praised the budget for increasing benefits. Māori Party co-leader Debbie Ngarewa-Packer was "cautiously optimistic" about the budget, praising the government for "accept[ing] a need to take a targeted approach rather than a universal one". Children's Commissioner Andrew Becroft praised the budget for being a "very solid, continuing step on our journey of halving child poverty by 2028", but said there was still more to be done. Director of poverty group Council for International Development Josie Pagani says that the budget "deal[s] with some of the inequality", forecasting that this budget will lift 75 thousand children out of poverty, but did not see the changes as drastic. Economic commentator Brad Olsen stated that the budget was "underwhelming" and did not have provisions for economic growth. == References ==