Budget 2022: Grant Robertson raids COVID-19 kitty to pull off major cost of living package

Finance Minister Grant Robertson has pulled a $1 billion cost of living package out of the bag.

It will mean 2 million New Zealanders will get about $27 a week for three months and - no surprises here - half-price public transport and the tax cut at the petrol pump are being extended, but only for two months.

The big winner on Thursday was always going to be health. 

More than $11 billion will go to wiping health boards' debts, to set up the new health system and keeping the lights on, plus $1.3 billion to build more hospitals.

The Government drug buying agency is getting a historic investment of almost $200 million over two years - it's less than what's been asked for.

Plus there's a $1 billion dollar package for Māori, cash to scrap the school decile system and a bone tossed to first home buyers.

Just surviving is getting too hard for mum Katie Tuhaka and her whānau.

"Kai's going up, gas is going up, everything's going up," she said. 

Her local marae has been there for her, unlike the Government.

"I definitely know they could do a lot more for us as people."

Robertson knows it so he's raided the COVID-19 kitty and found 1 billion bucks.

"I am acutely aware of the impact of the cost of living pressures on many people - particularly those on low and middle incomes," he said.

Taking cash from one still very current crisis for another. But he said there's $1.2 billion left to deal with any COVID-19 needs in the future. 

It's a bit of a Budget gamble for a sugar hit payout.

On August 1, every worker earning less than $70,000 but not eligible for the Winter Energy Payment will get $350. That's about $27 a week for three months. 

If there are two earners in the household, that’s $54.

But filling a trolley with $350 worth of groceries shows the COVID-19 cash won't stretch too far. The inflation-weary Finance Minister said that's not the point.

"We're well aware this is only a contribution towards the increase in costs people are facing but it is a targeted way we can support people through this challenging period while not excessively exacerbating inflation."

Informetrics principal economist Brad Olsen said the payments may not go on long enough. 

"The worry is as we get through to October when the cost of living payments start to stop, inflation is still expected to be higher for longer on these Treasury forecasts."

The Government's also sticking with keeping it cheaper to get from A to B for two more months, spending $235 million on extending the tax cuts on petrol and $130 million on half-price public transport.

But the more than 1 million Kiwis with a Community Services card get to keep the cheap fares for good.

"A balanced approach to targeted support where it's needed," Robertson said. 

There are also a couple of other 'b words' being bandied about.

"The books are going backwards, households are going backwards, outcomes are going backwards, New Zealand is going backwards," said National leader Christopher Luxon.

ACT's David Seymour called it the "brain drain Budget".

But Prime Minister Jacinda Ardern said if the Opposition is "genuinely concerned about the cost of living and just politics, surely they would support this package".

The COVID-19 cash may be reassigned but the virus kept the infected PM away on the biggest day of the political year.