Today's Budget will relieve some of the growing pressures on health, education and other core services stretched by New Zealand's swelling population.

But the National-led Government is now downplaying the scale of the housing initiatives in its eighth Budget.

As the issues of rising house prices and homelessness dominate debate in Parliament, Prime Minister John Key warned yesterday that the new housing measures would be "tools in the toolbox" rather than instant fixes.

In all, $76 billion in funding will be allocated in Budget 2016. Of that total, $1.6 billion will be new spending.


Finance Minister Bill English has indicated that most of the new money will address the pressure points caused by record migrant numbers and New Zealanders returning from overseas. That means more funding for schools, hospitals, and police.

The Budget will also focus on those most in need, the Government has said. A large investment is expected in National's "social investment" approach, which aims to detect families at high risk of welfare dependence or crime and make an early intervention.

The new funding for the housing sector will focus on the social housing sector, emergency housing, and freeing up more surplus land in Auckland for housing developments.

Mr English was at pains yesterday to underline the Government's existing housing policies.

"It's important to understand that any initiatives come on top of $2 billion that is spent this financial year ... to support 300,000 people on the accommodation supplement and 60,000 households on income-related rent.

"That is in addition to the Government's $20 billion worth of houses where it owns one in every 16 houses in New Zealand."

His comments came as the Government comes under increasing pressure over housing.

A Newshub-Reid Research poll published this week said that 76 per cent of New Zealanders believed the Government was not doing enough to control the housing market. Among National voters, 61 per cent said the Government was not doing enough.

Ahead of the Budget, the Labour Party pointed to new data which showed that suburbs with the highest levels of housing speculation had experienced the biggest falls in home ownership.

The data showed that in Otara - which has long been considered Auckland's poorest suburb - investors were responsible for 80 per cent of the house purchases in 2015.

Labour leader Andrew Little said his Budget wishlist included a massive house-building programme run by the Government.

National s broken Budget promises

Tax cuts (2009)

During its 2008 election campaign, National promised three rounds of tax cuts (2009-2011). Finance Minister Bill English stuck to the plan as the global economy crumbled and NZ dipped into recession, but come Budget 2009, the Government decided tax cuts for 2010 and 2011 were unaffordable.

GST (2010)

Before it was elected, National also ruled out a rise in GST. "National wants to cut taxes, not raise taxes," then-Opposition leader John Key said.

In Budget 2010, the Government raised GST from 12.5 per cent to 15 per cent. The GST hike paid for cuts in income tax and the company tax rate.

Class sizes (2012)

Education Minister Hekia Parata lit a fuse in Budget 2012 when she increased class sizes for mid-level education to 27.5 students, saving $43m in the process. After two weeks of backlash, the Government made a u-turn - probably John Key's biggest defeat in his eight years in charge.

No new taxes (2015)

Ahead of the 2014 election, National promised "no new taxes" if it was re-elected. It was, but since then it has introduced a border levy of up to $16 for travellers, a "bright line test" on all residential property bought and sold within two years, and a "Netflix tax" for goods bought online. Ministers dispute that any of them qualify as new taxes.

KiwiSaver (2015)

After scrapping the Kiwisaver sign-up bonus in Budget 2015, National indicated that it would consider bringing in automatic enrolment for the savings scheme. Mr English said mass enrolment would be cheaper after the $1000 Kickstart payment was scrapped. Six months later, the minister shelved auto-enrolment, saying the Government's surplus was too thin and it could not afford it.