Budget Day 2025: What You Need To Know
Article – RNZ
Explainer – Budget Day is coming on Thursday, but what does it all mean? RNZ is here to tell you what you need to know. Nik Dirga, Digital Explainer Editor
Explainer – Spoiler warning: If you're not a numbers person, this might not be your week.
Thursday is Budget Day, the biggest day of the year for the government, economists and journalists as Finance Minister Nicola Willis announces how much the National-led coalition will spend, where it will go and how.
What is the Budget?
Simply put, it's when the government lays out how it plans to spend money in the coming financial year, and where that money will come from.
Every May, typically on a Thursday, the minister of finance delivers the Budget in a speech in the House. Parliament will then go on to debate the details.
The government is required to present its Budget to Parliament by 31 July each year.
Budget Day isn't a done-in-one – the process behind it all carries on throughout the year, in a never-ending cycle from one Budget to the next. Select committees will scrutinise the spending plans and eventually pass the Budget presented on Budget Day.
In the 2025 Budget Policy Statement released in December that kicked off this year's cycle, Willis said the government's goals were a stronger, more productive economy, more efficient and effective public services and to 'get the government's books back in order and restore discipline to public spending'.
Read more:
So what actually happens on Budget Day?
There are a lot of elaborate rituals to Budget Day, which is equal parts practical and political spectacle.
Finance ministers often have their own quirks that turn into traditions – Sir Bill English was known to enjoy a pie at the start of Budget Day during the John Key years and Labour's Grant Robertson tucked into a cheese roll or two. Last year, Nicola Willis' children made cookies for their mum and the prime minister. This year's treats menu remains under lock and key.
On Budget Day
10.30am – Media and other interested parties will go into lockup at the Beehive – no phones, no internet – and get a first look at the Budget. A pile of documents will be released to them under a strict embargo. The finance minister will also give a presentation to journalists during lockup and journalists will dash to complete first takes on the highlights. If you break that embargo, you're in big trouble, as the Wall Street Journal found out in 2022.
2pm – The Budget embargo lifts, and here on RNZ and everywhere else you'll suddenly see a flood of Budget information. We'll be here to live blog coverage throughout the day.
This video produced by Parliament goes through what happens on Budget Day:
In Parliament, after Willis gives a presentation, the prime minister and other political parties will all weigh in as debate begins on the Budget.
Expect kudos and criticism in equal measures, followed by a lengthy period of hot takes and analysis that will continue for days to come.
Why is it such a big deal?
Roads? Hospitals? Schools? Resources we all use every day fall under the Budget.
Willis has called this year 'The Growth Budget', in line with the government's long-term goals to return to a surplus by 2029 at the latest.
We already know quite a lot about what the Budget will include.
'If you've been paying attention to the build-up to the Budget you probably won't learn anything new on Thursday,' University of Auckland emeritus professor of economics Timothy Hazledine said.
'Perhaps wealthier citizens will be interested in whether the minister announces means-testing of KiwiSaver and best-start transfer payments. And wealthy foreigners may be hoping for relaxation of rules limiting their high-end property purchases in Aotearoa NZ.'
So what are the key things to look for Thursday?
Less spending and a big focus on that 'growth' word.
Willis said in April that the government is halving its operating allowance from $2.4 billion to $1.3b. That means less money for additional funding for government departments this year.
In a recent pre-Budget speech to BusinessNZ, Prime Minister Christopher Luxon also signalled restraint:
'The minister of finance was right last week to say Budget 2025 won't be a lolly scramble. It's not that we can't afford it, although frankly we can't.'
Luxon has said the government needs to stay disciplined and focus on – there's that word again! – growth. And of course, there's also a lot of uncertainty in the global economy right now due to US President Donald Trump's trade wars and tariffs.
Luxon has already announced an increase to the capital expenditure – new money set aside in the Budget to maintain or upgrade assets. That money, which would be split mostly across health, education, defence, and transport, will total $6.8 billion.
One of the biggest pre-Budget controversies this year has been the government making changes to pay equity claims under urgency.
'The big bad news for many people (especially women) is the 'reprioritisation' of billions of dollars from pay equity spending,' Hazledine said, noting that at the same time defence spending was going to get a big boost.
Another key thing to look out for are hinted changes to KiwiSaver, which may include means-testing the government's contribution to the retirement fund.
Hazledine said that despite challenging conditions, New Zealand is doing 'quite well' in the global economy.
'Prices for our major commodity export (dairy products) are high (and so therefore we are paying more locally for milk and butter, alas), and our major service export, tourism, seems to be recovering from the Covid slump.
'The minister will be trying to keep a lid on borrowing whilst not threatening chances of a good economic recovery – a delicate balancing act.'
Does the Budget really make a difference?
New Zealand Budgets have helped make or break a government.
The late Michael Cullen, finance minister from 1999 to 2008, famously liked to say that 'budgets don't win elections, (but) they can lose them'.
In 1938, Prime Minister Michael Joseph Savage's Labour government introduced the Social Security Act with policies that were intended to provide 'from the cradle to the grave,' and shaped New Zealand society for decades to come.
In 1958, the Labour government released what became known as the 'Black Budget', where Finance Minister Arnold Nordmeyer attempted to reduce demand for overseas goods through imposing additional taxes on cars, alcohol and tobacco. It didn't go down well and Labour lost the 1960 election after just a single term in office.
And in 1991, the National government's 'Mother of all Budgets' released by Ruth Richardson heralded sweeping welfare reforms and privatisation. The National government went on to barely win the 1993 election in one of our closest contests.
While in 2019, Prime Minister Jacinda Ardern's 'Wellbeing Budget' introduced $1.9 billion in mental health funding – but as RNZ has reported, questions remain about the impact that funding had.
Willis aims to make the 'Growth Budget' of 2025 a key part of the government's legacy. On Thursday, we'll all start to find out how successful it will be.
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"When you get a stock submission, which is a body of text that is identical and it's just been clicked and dragged, then you don't have to read them all, because you just know that there are 500 people who think exactly the same thing," he said. "But when you get 500 postcards, which each have three handwritten sentences on them, they may all have the same theme, they may all be from a particular organisation, but the individual thoughts that have been individually expressed. So you can't kind of categorise it as just one size fits all. You've got to take every single case on its merits." Webb said he takes the select committee process very seriously. "The thing that struck me was, sure, you read a lot [of submissions] which are repetitive, but then all of a sudden you come across one which actually changes the way you think about the problem in front of you. "To kind of dismiss that as just one of a pile from this organisation is actually denying someone who's got an important point to make, their voice in the democratic process." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
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- Otago Daily Times
‘Just let them do it' an ideological attack on regulations
For a Bill set to transform New Zealand into a libertarian nightmare, it has an extremely boring name. The Regulatory Standards Bill (RSB) sounds like one of those pieces of legislation debated on a dreary Thursday afternoon in an almost empty House of Representatives. Not because anyone in particular wants it, but because those whose job it is to monitor the efficacy or otherwise of government regulations declares it to be necessary. MPs protesting to their respective party whips that they know absolutely nothing about this sort of Bill's content are told that participation in such debates is good for them. Speaking for 10 minutes about something one knows absolutely nothing about is key political skill. Without it, no politician should expect to do more than shepherd boring Bills through a nearly empty House for the rest of their (short) political career. The RSB may sound like one of those Bills, but it is anything but. According to one critic, the Bill will "neuter the ability of lawmakers to consider anything outside of individual liberty and property rights". That this proposed piece of legislative dynamite is the product of the Act New Zealand party is entirely unsurprising. David Seymour and his caucus are the most disciplined band of ideologically driven politicians in our Parliament. Liberty and property are their twin lodestars, and by them they navigate the choppy seas of New Zealand's resolutely non-ideological politics. Knowing exactly where they want to go has made it much easier for Act to determine, often with alarming and near-revolutionary clarity, what they ought to do. Boiled down to its essence, Act's political mission is captured in the French expression laissez-faire — loosely translated as "let them do it". If the actions of individuals cause no harm to others — let them do it. If those actions involve only their own property — let them do it. Contrariwise, if some individuals seek to compel other individuals for any reason other than preventing them from causing harm to others, then don't let them do it. And if that compulsion involves regulating the use of other individuals' private property, then definitely don't let them do it. Understandably, socialists are not (and never have been) great fans of laissez-faire. The collective welfare is (or used to be) their lodestar. Individuals determined to put themselves, and their property, ahead of measures designed to serve the common good should not be allowed to do it. Obviously, a great deal rests on how "harm" is defined. If your dairy farm is polluting the streams and rivers that others are accustomed to fishing and swimming in, does that constitute harm? If it does, then, surely, the state is entitled to regulate your farming practices? To restrict the ways in which you can legally use your private property. Alternatively, if a friend undertakes to sell you a few grams of cannabis, what business is it of the state's? Why should smoking weed, which most medical scientists have determined to be essentially harmless, be punishable by law? Why aren't individuals, if they're old enough to assess and accept the consequences of using cannabis, and it causes others no harm, allowed to do it? If pressed, Act will always put the rights of individual New Zealanders, and the sanctity of their private property, well ahead of the nation's collective welfare. These twin principles are what, with National's and New Zealand First's backing, Act intends to enshrine in the RSB. If it becomes law, then all regulatory legislation will be weighed carefully by an appointed board against the rights of liberty and property. If Parliament, in its wisdom, elects to override those rights, then the citizens required to surrender them must be fairly compensated. Naturally, environmental groups, iwi, trade unionists and the overwhelming majority of the inhabitants of NGO-land regard the RSB with horror and dismay. They no doubt believed that, having been soundly defeated several times already, such libertarian legislative forays were things of the past. The Left, generally, is flabbergasted and outraged that the coalition remains committed to the RSB's passage. Boy, are they making a fuss. To hear them talk, the Bill might have been co-sponsored by Sauron and Voldemort. But, don't be alarmed. One parliament cannot bind another. If the RSB looks like transforming Aotearoa-New Zealand into Mordor, then the next government can simply repeal it. ■Chris Trotter is an Auckland writer and commentator.
