New Zealand's 'growth budget' set to cut, cut, cut

NEW ZEALAND BUDGET
NZ Finance Minister Nicola Willis promises to unleash the Kiwi economy from regulatory burdens. -AAP Image

As the conservative New Zealand government hits the halfway mark, Finance Minister Nicola Willis is poised to deliver a hugely consequential budget: no BS.

She will reveal her second budget - which she has badged as the "growth budget" - on Thursday, promising to unleash the Kiwi economy from regulatory burdens and get GDP moving again after a dire 2024.

The Labour opposition, environmental groups and unions fear further cuts which will shrink the government and services that Kiwis rely on.

Already, the government has caused huge alarm among Kiwis by axing 33 wage rise claims affecting 180,000 workers in women-dominated workforces.

The surprise move prompted protests across the country, and will result in a substantial saving to the government coffers, rather than being paid out to hospice workers, midwives, teachers and others.

Labour leader Chris Hipkins argues the government's priorities are wrong, citing the pay equity claims and reinstated tax breaks.

"The government has chosen to pay for its budget off the backs of working women. That's not the right choice, now or ever," he said.

"Last year we saw job cuts and rising unemployment. This year we are seeing cuts to women's future pay.

"Budgets should be good for all New Zealanders, not just landlords, multinationals and tobacco companies."

Ms Willis retorts that extravagant spending during the COVID-19 era under Labour meant savings needed to be found.

"This week's budget is going to be a no BS budget," she said, as reported by Wellington newspaper The Post.

"... New Zealanders had enough of people promising rainbows. That's not where we're at.

"We've been left with very little cash in the account ... what I'm not promising to New Zealanders is that the budget we deliver this week will make everything better. That would be an unrealistic commitment."

The Council of Trade Unions fears additional savings in health, while Greenpeace has lashed conservation cuts that have led to the public body crowdfunding to save species from extinction.

Prime Minister Chris Luxon dismisses criticism as noise from the "Wellington bubble", saying Kiwis want him to "right-size" the government.

"It's a growth budget ... it's the right budget for the right time and it's responsible, and I'm really excited about it."

The government has "pre-announced" much of the new spending that will be confirmed in the budget, including one billion dollars in new defence spending and $750m for state care abuse survivors.

There is around $800m going to a prison redevelopment in Christchurch, $600m to new cancer treatments, $577 million to lure film productions to NZ, and $600m for railway upgrades.

Mr Luxon leads a three-party coalition of the right, including his conservative National party, the free-marketers ACT and populists NZ First.

ACT is a leading force for budget savings, but was left disappointed by the scale of cuts in the government's first budget last May.

This budget also comes a week before ACT leader David Seymour ascends to the deputy prime-ministership as part of a unique coalition deal in which he job-shares the role with current deputy Winston Peters.