The Government has released its 2021 Budget.
Entitled Wellbeing Budget 2021: Securing our Recovery, it's set against the backdrop of the economic pressures wrought by the COVID-19 pandemic.
What you need to know:
- Pharmac to get $200m boost over four years, well short of the $400m per year needed to clear the drug backlog
- Benefits to increase by $20 a week from July, with a second increase next year
- Government working on social security insurance scheme
- Māori allocated $1b, including $380m for housing and $100m for Māori Health Authority
- $486m to transition DHBs to Health NZ, with $300m to invest in new assets
- $1.4b over next four years allocated to schooling and early education
- $57.3b to be spent on infrastructure over four years
- $4.5b to spent per year on transport services and infrastructure
- $131.9m over four years to help communities prevent family violence and sexual violence
Newshub's live updates are now over.
5:25pm - The Government is earmarking almost $62 million in this year's Budget to reduce on-farm emissions and develop a national farm planning system.
The agriculture industry has been described as being key to New Zealand's COVID-19 economic recovery, but the sector also accounts for nearly half of the country's greenhouse gas emissions.
Last year the Government vowed to cut biogenic methane missions to between 24 and 47 percent below 2017 levels by 2050, and reduce them to 10 percent below 2017 levels by 2030.
Agriculture Minister Damien O'Connor says the latest raft of funding will help "supercharge and streamline" efforts to achieve these goals. It will also ensure farmers and growers have the tools they need to improve on-farm performance and meet freshwater and greenhouse gas requirements by 2025.
5:20pm - The Council of Trade Unions is welcoming the Government's announcement it is exploring a social unemployment insurance scheme.
The CTU, together with Government and Business New Zealand, have already been looking at possible ways to support workers through change in the Future of Work Tripartite Forum.
"When somone here loses their job, the pressure to get their next job quickly means they grab the first thing they can find. As a result their income from that job, and susequent jobs, takes a hit. It’s called ‘wage scarring’", says CTU President Richard Wagstaff.
"The evidence from overseas is that social insurance helps to reduce the 'scarring'. It also makes sure that workers have time to find the job that best fits their skills and needs. That’s good for them and it’s good for us all."
Wagstaff said the schemes are very common overseas.
"Having a scheme that protects workers will remove some of the fear associated with redundancy and will particularly support communities hit by large-scale job losses.
"The CTU looks forward to working closely with the Government and Business New Zealand on the details of this proposal. Together with Fair Pay Agreements and improved sick leave, this proposal could go a significant way to improving the industrial relations of New Zealand."
5:10pm - The Salvation Army is welcoming the $20 lift in benefit levels taking effect from July and the additional increases from April next year. However, it issceptical as to whether that will make a material difference to those who are really struggling with the rapidly rising cost of living.
With no adjustments to the Working for Families Package or the Accommodation Supplement, and rents and other living costs increasing, the Salvation Army says the benefit increases still fall short of what is needed to help people achieve adequate incomes and live with dignity.
"If we're serious about lifting children out of poverty that's not the way to do it,” Porirua Salvation Army officer Captain Nicki Dutton says.
"In Porirua, average rents can be over $600 for a three-bedroom house. With the maximum Accommodation Supplement of $220 for a family of four, an increase of between $32 and $55 in benefits will hardly make an impact."
The Salvation Army would like to have seen more emphasis on housing. It says urgent investment is needed to increase the number of suitable and transitional houses for those on benefits and low incomes.
It is calling for increased funding for wrap-around support for those who are living in emergency motel accommodation.
5pm - Here are some of the speeches in the House on Thursday afternoon following the Budget's release:
4:50pm - ACT Party leader David Seymour is slamming the 2021 "La-la Budget", comparing it to an episode of the '90s sitcom That 70s Show.
The Government on Thursday afternoon announced its highly-anticipated Budget, which is set against the backdrop of the COVID-19 pandemic. It included significant investment in beneficiaries along with boosts for Māori housing and infrastructure.
Speaking to Newshub Nation's Budget 2021 Special after the announcement, Seymour said he wasn't happy with the amount of debt New Zealand would incur.
"It's the la-la Budget, you've got record low interest rates, high export prices, you are still borrowing $100 billion and actually there is no preparation for our future where we come out of the other side of this COVID period. The Government's idea of economic development is f
4:35pm - Auckland Action Against Poverty says the Government is continue to introduce "incremental changes to the welfare system".
“The Government had an opportunity to truly secure our recovery, by lifting benefits to liveable levels and fulfilling their promise to transform the welfare system," says Auckland Action Against Poverty coordinator Brooke Pao Stanley.
"The $32-$55 increase to core benefits isn’t going to stop our whānau from needing to access hardship grants, and will continue to keep people and families in poverty.
"The recommendations of benefit increases in the WEAG report are out-of-date, and this report is a pre-COVID document. Life has significantly changed since then, and we cannot keep operating from old data. "
4:25pm - Newshub's Political Editor Tova O'Brien and political reporters Jenna Lynch and Amelia Wade have given their analysis of this year's Budget. Watch the video below.
4:15pm - The SPCA say it's extremely disappointed that a Budget bid for further Government funding for its vital animal welfare Inspectorate service has not been seen as a necessary priority.
It says this will upset animal welfare supporters and put more pressure on SPCA, which is already stretched to the limit.
"We are mandated by Government to do this important work. Looking after animal welfare in New Zealand is a costly business and quite frankly, we were needing some positive news from the Government today," chief executive Andrea Midgen says.
"I find it unbelievable that the Government are willing to leave the future of the Inspectorate service up to the New Zealand public to fund. Our communities are calling for more people to be held to account for animal abuse, but how can SPCA possibly do this with a pared down Inspectorate service due to lack of funding? It’s simply not good enough."
Midgen says the SPCA currently receives a quarter of what is needed to cover the costs of the Inspectorate service and that the only way the Inspectorate service can operate is through fundraising from the generosity of New Zealanders. The total amount needed annually for SPCA to continue operating is forecast to reach $50 million in 2022.
It costs New Zealand’s largest animal welfare organisation $10 million every year to fund its enforcement service.
4:05pm - E tū is applauding the Government's plan for an ACC-style 'social insurance' scheme, which would give workers income protection if they lose their jobs.
Assistant national secretary Annie Newman says it’s great that the Government are prioritising the idea, which was in the Labour Party’s 2020 election manifesto.
"COVID-19 reminded us again how important it is to support people as they move in and out of work," Newman says.
"Losing an income, even for a short while, can have extremely negative effects on workers and their families. Social insurance schemes have been proven to work well to mitigate this in many other counties, and its high time that Aotearoa New Zealand caught up.
"We fully support the idea and urge the Government to move quickly on this, as it is long overdue."
4pm - BusinessNZ has released a statement in which it says it acknowledges the social spending contained in Budget 2021, but is disappointed at the lack of focus on growing the economy.
While the likes of reducing child poverty and tackling climate change are "worthy targets for investment", BusinessNZ chief executive Kirk Hope says the needs of business and the economy should have had more attention.
"Additional investment in infrastructure, and training and digital skills will be appreciated, along with the plan to develop a scheme to help support unemployed people find new jobs," Hope said.
"However there is little else directly focused on building the economy or easing the burden on businesses. Business was keen to see less burdensome regulation, policies to stimulate growth and development, and more certainty around business policies into the future.
"We’d appreciate a plan to fix the housing crisis and more certainty around the plan for economic recovery from COVID.
"From a business perspective, the Budget represents a missed opportunity for growth."
3:50pm - ACT's David Seymour is currently speaking in the House, reiterating comments he made in a press statement earlier on Thursday that this is a "La La Budget".
In that statement, Seymour said we need to stimulate economic growth.
"Instead, Labour is making it harder to employ people and easier for people not to work. There is nothing to encourage investment in infrastructure.
"Jacinda Ardern told us on election night she would govern for all New Zealanders. Well what about middle New Zealand?
"The Government is indexing income thresholds for receiving child care assistance but not tax thresholds.
"These are actually the best of times we have near record terms of trade, milk prices are high, and interest rates are at record lows. New Zealand has had enormous advantages in the first phase of COVID but we’re unprepared as the world opens up."
3:45pm - Greenpeace isn't happy with the Government's investment in fighting climate change in Budget 2021. It says the Government is "kicking the can down the road again on climate action at a time when both the opportunity and the need for real action has never been greater."
"Today's Budget announcement offers little more than loose change for tackling the climate crisis. It's incredibly frustrating to watch this Government continue a slow and incremental approach to dealing with what is a major and urgent crisis. Winning slowly on climate change is the same as losing," said Greenpeace spokesperson Amanda Larsson
"The $1.3 billion set aside for improving rail is good news, but the Government is really missing in action when it comes to dealing with New Zealand’s biggest climate polluter - intensive dairying. What's needed is a sizeable investment in support for farmers to transition to regenerative farming practices."
It wants a $1 billion investment for building infrastructure like plant-based food factories and compost plants as well as providing grant funding for farmers to take up regenerative techniques like agroforestry.
Greenpeace’s oceans campaigner Jessica Desmond says that "anything meaningful for the marine environment is also sorely missing from the Budget."
"With 90 percent of seabirds and 22 percent of marine mammals threatened or at risk of extinction and the ocean under increasing pressure from pollution, climate change and overfishing, the Government should be investing to turn things around now.
"Small change has been given to the cameras on boats programme in the Budget, but it falls well short of getting cameras on 100 percent of the commercial fishing fleet, something over 20,000 New Zealanders are calling for.
"Commercial fishing is the single greatest risk to the ocean. If we’re serious about protecting it, we need transparency around this industry - and that looks like cameras on all fishing boats," she says.
"New Zealanders have been waiting for this programme for years. This was the government’s opportunity to ensure it finally gets delivered this term, and they missed it."
3:35pm - The Public Service Association members is celebrating the Budget's boosts for beneficiaries and low-paid workers, and the announcement of new programmes to tackle the housing crisis.
"PSA members choose careers in agencies like the Ministry of Social Development because they want to help people in need. Shamefully low benefit levels caused unnecessary suffering for thirty years, so we’re thrilled the government has today promised to end that dark legacy," says union National Secretary Erin Polaczuk.
"This Budget secures funding to maintain the current levels of public and community services on which New Zealanders rely. Public servants can continue to work with confidence."
3:30pm - The Early Childhood Council has welcomed the 1.2 percent increase in operational support for early learning centres announced in today’s Budget, but warns it’s only a start toward what’s required.
"We support the continued moves toward Pay Parity, and appreciate the 1.2 percent increase in operational support. It's also great to see a boost for Kohanga Reo," said ECC CEO Peter Reynolds.
"But for centres already on razor thin margins, it doesn’t go anywhere near making up for ten years of underfunding – it’s not even certain if this will cover inflation."
"And it’s unclear why we have to wait until January to receive it.”
"The Minister’s intention to review the early learning funding model is great, but centres need help now. Today’s 1.2 percent increase will help some, but not all," said Reynolds.
3:15pm: Newshub's Political Editor Tova O'Brien has described Budget 2021 - which included the biggest boost for beneficiaries in a generation - as "bold but necessary".
"The Government needed to do this - or at least do something to boost benefits. The Prime Minister made child poverty her raison d'etre," she writes.
"To have the stats consistently deliver abysmal results (albeit trend slightly in the right direction) for children was the ultimate black mark on her leadership.
"This is bold but necessary. At this rate Jacinda Ardern may just wind up delivering on her promise to be a transformational Government - a promise she failed to deliver on last term."
Read O'Brien's full opinion piece here.
3:10pm: Children's Commissioner Andrew Becroft says the benefit increases are a "good step" towards ending poverty in New Zealand - but he believes much more is needed.
"This is an important and significant step forward for children living in poverty and hardship and is well on the way to meeting the Government's 10-year poverty targets.
"However I'm worried that the needs of children now are still not being adequately met. More than 125,000 children are living in material hardship, and Māori, Pacific and disabled children figure far too much in that group. Their wellbeing needs to be specifically targeted for improvement.
“After decades of tolerating child poverty and hardship, New Zealand has an opportunity to choose a better course. It's great to see the Government setting the direction for progress. Child poverty is solvable, if we continue to have the will to do it."
2:57pm: In an interview with Ryan Bridge on Newshub Nation's Budget Special, Te Pāti Māori co-leader Debbie Ngarewa-Packer gave a mixed review of Budget 2021.
She said while it's good money has been put aside for infrastructure and papakainga and recognised Māori had been specifically targeted, she said Māori now need to see the changes implemented on the ground.
Ngarewa-Packer also expressed her confusion at a lack of additional funding for Whanau Ora, which was revealed by Newshub on Thursday morning.
"We are really puzzled... [the Budget] does recognise the success of the blueprint, but the fact it has received no funding is really puzzling, and frankly, disappointing."
2:50pm: There are a few other important parts of the Budget that may get overshadowed amid the show-stopping investment in Māori, beneficiaries and infrastructure projects.
- The Training Incentive Allowance, which supports sole parents, carers and disabled people with costs of study, will be reinstated. It'll support about 16,000 people to retrain, gain higher skills and transition into new careers over the next four years, at a cost of $127 million.
- From April 2022, income thresholds for Childcare Assistance will be adjusted every year in line with average wage growth, at a cost of $13.3 million over four years.
- The Government is spending $9 million to expand the Out of School care and Recreation Service (OSCAR) initiative, to provide for an additional 3300 places.
- The Warmer Kiwi Homes programme is being extended to ensure more low-income homeowners get insulation and heating. It's expected an extra 47,700 homeowners will benefit.
2:45pm: Investment in addressing climate change is another important feature of Budget 2021.
The Government had already announced $67.4 million to support the transition to a carbon neutral public sector by 2025 and $41.8 million for the leasing of low-emissions vehicles across the public sector.
An additional $300 million boost will accelerate investment in low-carbon technology, by topping up the New Zealand Green Investment Fund, which is running out of capital.
The Low Emission Vehicles Contestable Fund (LEVCF) will become the Low Emission Transport Fund (LETF) to reflect a change in eligibility for projects in areas like aviation, maritime and for off-road vehicles. Other projects such as biofuel and hydrogen will also now be eligible for funding.
Total funding for the programme will reach up to $25 million per year by 2023-2024, with the Government increasing its contribution to up to $12.5 million through Budget 2021, compared to the current $6.5 million.
To help farmers and growers achieve lower emissions, the Government is investing $37 million towards farm planning, $24 million towards agricultural greenhouse gas mitigation research and development, and $900,000 to collect statistics on agricultural production.
The Government is also investing $28 million to protect kauri from dieback, while $8.9 million will go towards advanced screening technology to strengthen biosecurity and $22.5 million for the National Animal Identification and Tracing Scheme.
2:40pm: In a statement, the Green Party said it supports the 2021 Budget due to its measures to alleviate poverty and address the climate change emergency.
"We know that increasingly, New Zealanders have struggled to get by, compounded by the housing crisis that is locking New Zealanders out of a secure, warm, accessible home," says co-leader Marama Davidson.
"The Greens alongside community groups have long pushed to end poverty here in Aotearoa. Whether it be the redistribution of wealth with tax reform and a Guaranteed Minimum Income, or the implementation of the WEAG recommendations.
"We all deserve a strong social safety net that helps people live with dignity. That's why we are pleased to see this increase in support, in line with the recommendations of the Welfare Expert Advisory Group."
2:36pm: More alternative names for the Wellbeing Budget 2021 - this time courtesy of ACT leader David Seymour.
He's labelled it the La La Budget, as - you guessed it - "the Government is in La La Land".
"Grant Robertson has his hands over his ears yelling out 'la la la' to ignore reality," Seymour says.
"The Budget assumes that unemployment will be 4.4 percent and economic growth will be 4.4 percent by 2023. It assumes there will low inflation and low unemployment.
"They are in La La Land! How can that possibly be the case with the Government's anti-growth, anti-business agenda? We're heading straight for an iceberg with Grant Robertson at the helm of the ship."
He says we need to stimulate economic growth but this Budget only succeeds in "making it harder to employ people and easier for people not to work".
"There is nothing to encourage investment in infrastructure. Jacinda Ardern told us on election night she would govern for all New Zealanders. Well what about middle New Zealand?"
2:32pm: National leader Judith Collins isn't happy.
She has declared this year's Budget the 'Broken Compass Budget', saying it "lacks the plan and ambition" to grow the economy and reduce the debt for future generations.
She describes it as confirmation of Labour's inability to deliver, saying there's nothing in it for middle New Zealand.
"Labour doesn’t have any direction for getting the country back on track to prosperity. This Budget lacks the aspiration we need if we're going to grow the economy and create more jobs so we can pay down debt faster.
"With losses projected for the next five years, the quality of government spending matters now more than ever - and we’ve seen today that Labour does not have its priorities right.
"To truly 'secure our recovery' we need to provide businesses the confidence they need to invest, so they can employ more staff and pay good wages.
"All New Zealanders are feeling the pinch right now - not just those on jobseeker benefits and the minimum wage - so where is the plan to take the entire country back to prosperity?"
2:29pm: Big, big changes in New Zealand's fight against poverty.
As mentioned earlier, from July 1 the benefit will increase by $20 a week, and a second increase will occur again next year, bringing it in line with WEAG's advice. Families and whanau with children will also receive a further $15 per adult per week.
It means in total, weekly main benefit rates will increase by between $32 and $55 per adult by April 2022. The Government expects that 109,000 families and whanau with children will be, on average, $175 a week better off as a result of changes to income support since 2017.
Prime Minister Jacinda Ardern said increasing incomes for the most vulnerable secures New Zealand's economic recovery and stimulates the economy, while also addressing child poverty.
"We are targeting investment where need is greatest; putting food on the table and helping with power bills in the homes that need it most."
2:26pm: Schooling and education will get $634.1 million over the next four years - $170 million of which will go towards certified teachers in education and care centres getting pay parity with kindergarten teachers, which has already been announced.
The Government is putting $761 million towards education capital spending, including $634.1 million for school property, while $470 million is allocated for for tertiary education, including $279 million to support the vocational education reforms.
An increase of $25 per week for student support, including allowances and living costs, will come into effect from April 2022.
2:23pm: Among the biggest announcements in today's Budget is the investment in infrastructure.
A whopping $57.3 billion will be spent over the next four years on infrastructure.
The Government had $42 billion of infrastructure investment in progress over the next four years in roads, rail, schools and hospitals, and this has been significantly topped up.
Rail gets $1.3 billion, including $810 million for KiwiRail, after rail got a billion-dollar top up in both previous Budgets.
2:19pm: Grant Robertson concludes his speech in Parliament by saying he believes Budget 2021 "gets the balance right".
He says some people believe the Government should've taken on more debt, while others urged them to reduce it - but he's happy with what they've done.
2:15pm: While Māori and beneficiaries have done well out of Budget 2021, the Government's predicted boost to Pharmac has fallen well short of expectations.
Newshub recently revealed the Government's drug-buying agency Pharmac would need $400 million a year to clear the backlog of drugs on its wish-list, but only $200 million is being invested over four years - far less than was hoped.
It's one of a host of changes to the Government's health expenditure, which gets $4.7 billion over four years and covers $486 million to begin DHBs' transition to Health NZ and $242.8 million for Māori health initiatives, including setting up the new Māori Health Authority.
DHBs alone get $2.7 billion in additional support, contributing to a 45 percent increase to health funding since the Government took office in 2017.
The number of adults getting cochlear implants for hearing loss will almost double, with 320 more people getting them by 2025.
But the Government is axing free annual GP visits and eye checks for Supergold Card holders, as officials say it is of limited benefit and the $197 million it would have cost over four years can be better spent.
Read more in Zane Small's report here.
2:12pm: Some of the Finance Minister's speech from Parliament.
"Today's Budget is set against the backdrop of two previous budgets - one delivered last year and one that was delivered 30 years ago," he told the house.
"The 2020 Budget was very much a COVID-19 budget ... to support New Zealanders through the shock of the COVID-19 pandemic - but its job is not yet done. This year's budget is still in the shadow of COVID-19 and is to secure our recovery from its impact.
"This budget is also set against the budget 30 years ago this year - the so-called Mother of all Budgets. It was the budget that finalised the benefit cuts which introduced the idea of hospitals being replaced by Crown health enterprises, that set in motion interest-bearing student loans and welcomed the passing of the Employment Contracts Act.
"The Government is undoing some of the damage done all those years ago... We will restore dignity and hope for those lowest New Zealanders."
2:08pm: The boost to beneficiaries is not the only notable feature of this year's Budget - Māori are also among the big winners.
Budget 2021 is delivering a package for Māori worth more than $1 billion, including $380 million for housing and $100 million to establish the Māori Health Authority.
The Government is also setting aside $350 million from the Housing Acceleration Fund to be targeted towards investment in infrastructure to support Māori and iwi providers build homes.
Read more about what Budget 2021 means for Māori here.
2:05pm: The Finance Minister Grant Robertson is now making his Budget speech in Parliament.
2:03pm: Political Editor Tova O'Brien has declared this year's Budget the "blockbuster beneficiary booster budget" as it's revealed $3.3 billion is being pumped into the welfare system.
From July this year, all benefit rates will increase by $20 a week, with a second increase in April next year bringing main benefits in line with recommendations from the 2019 Welfare Expert Advisory Group (WEAG).
Families with children will also receive a further $15 per adult per week, while student allowance and student loan for living costs jump by $25 per week.
That means that weekly benefit rates will increase by between $32 and $55 per adult by April 2022.
Read more about the benefit boost in Jamie Ensor's story here.
2pm: The Budget has just been released.
1:55pm: We're just five minutes away from learning what's in this year's Budget.
Follow along live on this page for all the details and analysis - we'll provide updates as soon as the clock strikes two.
1:50pm: The AM Show host Duncan Garner is predicting beneficiaries and emergency housing occupants will be Budget day's biggest winners.
He urges businesses and homeowners to shush, arguing they've "already won", and accept the Budget probably won't offer them any respite after the challenges of COVID-19.
"I suspect Grant Robertson will increase base benefit levels today - not as much as those who deal with the poor want - but Robertson is a Labour Party Finance Minister. Now is his time, if not now, then when," he said.
"The need is now. Poverty exists in New Zealand and this can ease the pain. I'm not saying it solves anything, but it will ease the daily pain a bit. The bonus bit - beneficiaries are likely to spend any increase, and that stimulates the economy.
"Throw in some emergency housing measures and boom, there's your [Budget] day, done and dusted."
1:40pm: Newshub understands benefits are likely to get a big boost in Budget 2021 - and the latest Newshub-Reid Research poll shows the country is on board too.
In the latest pre-Budget poll we asked: "Should the Government follow the recommendation to raise the unemployment benefit?"
A majority - 54.8 percent - said yes, far more than those who opposed - 34.5 percent. The rest weren't sure.
1:30pm: Three of the leading characters in today's Budget had breakfast together this morning ahead of its release.
Minister for Social Development Carmel Sepuloni shared a photo of her alongside Prime Minister Jacinda Ardern and Finance Minister Grant Robertson.
A nervous Ardern looks like she'd hardly even touched her pottle of yoghurt and granola, but Robertson appears comfortable having polished off something resembling a BLT.
1:20pm: In big news ahead of the Budget's release on Thursday, Newshub exclusively revealed there would be no additional funding for Whānau Ora.
A Newshub source says Minister for Whānau Ora Peeni Henare gave commissioning agencies a heads up last night over a Zoom call and told them he had put in a Budget bid.
If that's the case, it appears to have been rejected by Robertson in a Budget with high expectations to deliver for Māori.
The Government topped up Whānau Ora with $136 million over two years in the 2020 Budget.