Budget 2025: Best Start payments to be means-tested across all three years
Her Budget increased spending in areas such as health, education and spending while reducing debt, Willis said.
'The Government is not promising today's Budget will solve all of New Zealand's problems.'
In its first response to Budget 2025, Labour labelled it an 'Austerity Budget that leaves women out'.
'After a year of job cuts, now we are on to pay cuts and stealing from our kids' retirement funds,' Labour leader Chris Hipkins said.
Working for Families changes - $14 a fortnight
Social Development Minister Louise Upston announced a tweak to Working for Families tax credits.
The abatement threshold, the level at which the tax credit is slowly withdrawn, will be lifted from $42,700 to $44,900.
This means that people will keep more of their tax credits as their income from work rises with wage inflation.
The increase is worth $14 a fortnight on average and up to $23 a fortnight.
The cost of the change is $205m over four years.
However, the Government is also raising the abatement rate from 27% to 27.5%. This means that when people's incomes rise, they will lose their tax credits faster than before.
It marks a steady increase in the abatement rate over successive Governments. Not long ago it was closer to 20%.
Do you have questions about the Budget? Ask our experts – business editor at large Liam Dann, senior political correspondent Audrey Young and Wellington business editor Jenee Tibshraeny – in a Herald Premium online Q&A here at nzherald.co.nz at 9.30am, Friday, May 23.
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Article – RNZ RNZ understands a deal with Ngti Rangi that underpinned the project fell over at the last minute. The Defence Force's flagship project to fix up poor housing that is bad for soldiers' health has failed to break ground two years after it was funded, according to sources in Waiouru. None of the 50 houses promised for Waiouru have been started, according to feedback from the town, which the NZDF has not disputed. Budget 2023 earmarked the thick end of $75 million for the new houses. A Defence tender to find a builder went out a year ago. But on Wednesday the government said, 'Discussions regarding Waiouru are ongoing and progressing well, as part of a wider Treaty Settlement.' Asked what the talks were about, Associate Defence Minister Chris Penk's office said, 'We don't have anything further to add outside of our existing statements currently.' NZDF did not address what the new discussions were about either. It did not respond when asked what had happened to the project and any contract. RNZ understands its deal with Ngāti Rangi that underpinned the housing project fell over at the last minute. Ngāti Rangi is hosting the National Hautapu Ceremony for Matariki next week at Tirorangi Marae. The iwi referred RNZ's questions to the NZDF. A spokesperson for Associate Defence Minister Chris Penk, in a statement sent after the publication of this article, said the Government did not accept the suggestion any deal had fallen over. It said in 2021 that, 'Housing is on the top of our priority list. As part of our settlement we have an arrangement with the New Zealand Defence Force out at Waiouru to build 50 homes. That project we're still working on with NZDF.' Penk told Cabinet colleagues last year that NZDF's widespread 'dilapidated' housing was harming military output. Defence has vacancy rates of about 30 percent and 'ten percent of personnel leave the NZDF predominantly due to the unsatisfactory working, training and living environments', he said. Budget 2025 signalled the start of $9 billion in promised new defence spending by 2029, containing about $3 billion for 15 projects, mostly to do with weapons or IT systems. However, the Budget provided just a fraction over the next four years to address the billion-dollar backlog in maintenance and renewals that is outstanding; past Cabinet papers gave this figure, and NZDF confirmed on Tuesday that its spending on defence regeneration was half a billion dollars behind what the 2019 plan demanded. In August 2024, Penk expressed shock after seeing photos of black mould in Waiouru families' homes. 'No family should have to live like that, let alone the families of those who sacrifice so much to serve their country,' he said. The temperature low in Waiouru over the last 30 days has been under one degree on 17 days. Some housing 'poses potential health risks and can cause housing-related stress to … personnel and their families', and was linked to health conditions like asthma, a Cabinet minute in 2023 said. The 50-house project was announced as settled a year ago, under the Te Tiriti settlement with Ngāti Rangi seven years ago. Ruapehu district mayor Weston Kirton and his council celebrated the deal 11 months ago. 'I don't have any detail, only to say that it seems to be stalled in some shape or form,' Kirton told RNZ on Wednesday. No building appeared to have taken place – a playground and community park were in the tender, too – and the council was not privy to why, or to Defence talks with iwi. 'The minister should give us an update on what progress there is on the Defence presence in the Waiouru community,' Kirton said. NZDF had earlier threatened to shut up shop entirely at the central North Island settlement and head south, so he had been delighted when the settlement secured the army's training area and the housing deal began to firm up. 'It was all go,' Kirton told RNZ. 'They were very excited, they wanted to retain the training area at Waiouru. 'We were excited, the fact that they were going to put resouces back into Waiouru.' On Wednesday, Penk initially made no comment at all about Waiouru, then, when prompted again by RNZ, provided a single line about the 'discussions'. Shortly before that, in a longer statement, he had said, 'The government is improving accommodation for our sailors, soldiers and aviators by addressing decades of underinvestment, which has left Defence housing stock in poor condition.' Penk referred in that statement to projects in Devonport, Trentham and Manawatū, but not Waiouru, even though Waiouru had the lion's share of Budget 2023's tranche one funding for housing upgrades. 'The Waiouru New Build Housing is one of the first projects implemented under the Homes for Families Programme,' said its tender. Two months ago on Facebook, Penk posted – next to a headline '$12 billion for a stronger NZ' cheering the defence capability plan released in April – that: 'This Government is rebuilding the Defence Force after decades of underfunding.' 'Defence housing, messing and dining spaces are going to benefit from fresh investment. 'Our military personnel deserve healthy and modern spaces to live and rest in while they serve our country.' The 50-house Waiouru deal was designed to signal the starter's gun on a half-billion-dollar upgrade of the army camp over the next 25 years, and of an overall $3 billion overhaul of 1600 defence houses countrywide. Most of those required 'upgrading urgently', past Cabinet papers said. Penk a year ago told a Cabinet committee the estate was a 'critical enabler of military effect; providing the working, training and living environments required for generating and maintaining defence outputs'. 'The dilapidated condition of the NZDF estate is evident everywhere, but mainly in the living and training environments, and with utilities such as power, water supply and sanitation.' A 2024 estimate put deferred maintenance at $480m across the estate, which includes not just houses but other facilities. Some 'critical' defence assets were so poor in some places that a 'wholesale shutdown of operations at that location may be needed', Penk stated. The NZDF's annual report a year earlier had said 99 percent of its houses met Healthy Homes standards. Asked how that was possible given what Cabinet had been told, NZDF told RNZ: 'Healthy Homes compliance does not address the state of NZDF's barracks or working accommodation and does not necessarily address whether a home is aged, fit for purpose and or in an accelerated state of deterioration.' Penk had said in August 2024 that funding was constrained but the government was looking at options for improving the housing. Earlier, Budget 2024 funded 35 leased homes at Devonport Naval Base. New initiatives in Budget 2025 funded just $4m of capital and $16m for housing over four years. More would be added 'once the business case is approved by Cabinet', NZDF said. The business case related to a revision of its 2019 estate regeneration plan to fit a 2024-2040 timeline. This had to be revised, in part, to 'address consequences of insufficient funding since the 2019 business case', official papers said. 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