2025 New Zealand budget

In late April 2025, Finance Minister Nicola Willis announced that the Sixth National Government would reduce its operating budget from NZ$2.4 billion to NZ$1.3 billion. She confirmed that the 2025 Budget would focus on health, education, law and order, defence, with some limited spending on critical "social investments," supporting business growth and targeted cost of living relief. On 6 May 2025, Minister for Workplace Relations Brooke van Velden announced that the New Zealand Government would raise the threshold for employees making pay equity claims, reversing a 2020 law change introduced by the previous Sixth Labour Government. This announcement affected 33 ongoing pay equity claims, which had to be stopped and refiled. That same day, the Government introduced urgent legislation to raise the pay equity threshold. On 7 May, the Equal Pay Amendment Act 2025 passed into law with the support of the governing National, ACT and New Zealand First parties. The opposition Labour, Green parties and Te Pāti Māori opposed the law change. Willis estimated that the pay equity changes would save the New Zealand an estimated NZ$12.8 billion over the next four years. Several academic and media commentators including University of Auckland political scientists Jennifer Curtin, Gay Marie Francisco, Mohammad Salimifar, Newsroom editor Sam Sachdeva and Radio New Zealand deputy political editor Craig McCulloch said that the pay equity changes reflected the Government's priorities in using the 2025 Budget to promote economic growth, targeted economic and health spending, and giving tax breaks to businesses and frontline services. Meanwhile, former Labour leader David Cunliffe described the pay equity changes as a "MAGA-style override" that discriminated against female employees. ==Major announcements==

The core New Zealand Crown expense forecast for the 2025-26 financial year is NZ$ 150.3 billion. Of this figure, NZ$3.7 billion has been allocated to health, NZ$24.7 billion to superannuation, NZ$21.5 billion to education, NZ$25.5 billion to social security and welfare, NZ$9.5 billion to financial costs, NZ$7.3 billion to law and order and NZ$7.2 billion to transportation and communications. Investment Boost • The Investment Boost policy allows businesses to deduct 20 percent of the costs of new assets like machinery, tools and equipment from taxable income on top of normal depreciation. Willis has estimated that this tax break will lift gross domestic product by 1 percent and wages by 1.5 percent over the next 20 years. • The Government will also seek to promote economic growth by attracting foreign investment through the investment agency Invest New Zealand, changing international tax rules to encourage infrastructural investment, changing employee share scheme tax rates and investing international visitor fees into tourism and conservation upgrades. • Reallocating funding to create 50 new teaching spaces for Māori language learners. KiwiSaver • Raising the KiwiSaver employee and employer contribution rate progressively from 3 to 4 percent between 1 April 2026 and 1 April 2028. Foreign affairs • Investing NZ$368 million in delivering overseas development assistance, focusing on the Pacific. • Allocating funding to recruiting seven new curriculum advisors to help teachers using the redesigned Te Marautanga o Aotearoa programme (the curriculum for Māori medium schools). In early October 2025, RNZ confirmed it would close its youth podcast series TAHI, the "Sunday Sampler" and "At the Movies" radio show as a result of budget cutbacks. • Ministry for Pacific Peoples (MPP): Cutting NZ$36 million in funding to the Ministry. Shuttered programmes including the Tauola Business Fund and the Dawn Raids reconciliation programme for the 2027/28 financial year. Allocating NZ$6.3 million per annum to MPP's Pacific Business Trust and Pacific Business Village business support programmes. Reducing the MPP's Tupu Aotearoa employment programme's annual funding to NZ$5.25 million. • Public services: Most government departments did not receive extra funding in 2025, which means they will have to absorb any rising costs including wage increases. ==Responses==

Government National On 22 May, Finance Minister Nicola Willis defended the 2025 budget, arguing it would lead to rising incomes, new jobs being created, and better funding for education, healthcare services, police and defence. During her budget speech, Willis stated that "we are not going to have to burden future generations with unmeetable levels of debt, we are not going to impose new taxes, and in fact we are going to grow the economy faster." On 23 May, Minister for Māori Development Tama Potaka highlighted Māori funding targets in the 2025 budget particularly the Māori Wardens and Māori Women's Welfare League. ACT ACT leader David Seymour praised the 2025 budget for supporting the Government's efforts to alleviate poverty, cut government spending and investing in "things to make it easier to get along." He said that the budget's targeted investments in improving education, school attendance and helping people with special learning needs was "the real pathway out of poverty." Opposition parties Labour On 22 May, Labour leader Chris Hipkins criticised the 2025 budget, saying that it did not allocate enough funding to frontline health services and criticising the Government's revamped KiwiSaver scheme for "raiding" retirement savings. He estimated that the budget would cost 18-year olds NZ$66,000 in retirement savings. Media analysis The Spinoff contributor Liam Rātana disputed Willis' remark that the Government had generated NZ$700m in Māori funding through reallocated or pre-announced funding. Rãtana contended that budget documents showed that only NZ$38 million in new funding had been directly allocated to Māori. He also criticised the Government's decision to cut funding to the Whai Kāinga Whai Oranga Māori housing programme and various cuts to Māori education programmes. ==References==