Public services receive big boost in New Zealand budget

18 May 18

The New Zealand coalition has delivered a big boost for public services in its first budget, including NZ$3.2bn extra for health services and a new state housing programme.

The Labour-led coalition’s budget would make sure that “all New Zealanders have access to the high quality public services they need and deserve – such as health, education and housing”, the finance minister said.

He said that rebuilding the health services was “the top priority” for the budget, as public services had been underfunded for too long.

 “This begins the journey to rebuild a health system that has simply not been given the resources to meet the demands of population growth and an ageing population over recent years,” he said.

The budget handed over $3.2bn extra for health services over the next four years.

This includes $750m funding for health projects, which last year was just $150m. Doctor visits will also become approximately $20 to $30 cheaper for more than half a million people, he said.

An extra $1.6bn will be given to education over the next four years, including early childhood education and to students with higher learning needs.

This is a 45% increase on last year’s budget.

The finance minister said: “New funding will address increasing demand for early childhood education and roll growth.”

This includes $590m to support the early learning needs of 200,000 children and $203.6m to schools boost their operating funding.

To tackle the housing crisis, the budget allocated more than $1bn for housing, including an investment of $234.4m for the state housing body Housing New Zealand and community housing providers, which will provide more than 6,000 homes over the next four years.

Additionally, the budget has delivered $3.9m of new funding to the Computer Emergency Response Team to fight cybercrime and threats.

The Treasury forecasts economic growth of about 3% per annum on average over the next four years. It also expects wages to rise by an average of 3.1% and unemployment to fall to 4.1% in late 2019.

The budget delivers an operating surplus for 2017/18 of $3.1bn rising in 2018/19 to $3.7bn, with surpluses reaching an estimated $7.3bn by 2022, he said.

The changes announced in the budget is enabled by “more tax revenue than previously forecast”, some previously announced tax changed and reprioritising spending, he said.

Prime minister Jacinda Ardern said that every dollar spent was considered, prioritised and balanced.

The government has already delivered a programme of reforms, including increasing the minimum wage, extending paid parental leave, introducing the Families Package, which includes NZ$5.5bn over four years to improve living standards of those who need it the most, and a new child poverty reduction bill.

Earlier this month, the government announced it would boost its overseas development spending by $714.2m to respond to global emergencies.

The budget winners:
- Health: $3.2bn over four years, including $126m for elective surgeries and $750m for hospital upgrades
- Cheaper doctor visits: more than 500,000 people will get cheaper doctor visits. Free GP visits will be extended to 13-year-olds and community services card holders will save $20 to $30 on doctor visits
- Housing: $3.8bn to build 6400 more state homes by 2022, as well as $170m for emergency housing
- Education: $395m to build new schools and classrooms

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