BUDGET AT A GLANCE
• The big-ticket item is a $3.3 billion for boosting benefits - by up to $55 per week by April 2022.
• Health budget delivers $200m more for Pharmac, and the first tranche of money for the health reforms.
• Prime Minister Jacinda Ardern says Budget means New Zealand will come out of the pandemic 'stronger than when we entered it'.
• New Zealand's economic outlook is much better than expected, with a jump in GDP growth and lower unemployment. Forecast return to surplus is now 2027
• 6.25pm: James Shaw has defended the Government's new climate spending after it was slammed as "loose change". Read what Shaw had to say here.
• 6.10pm: The 2021 Budget was geared to keep the 'better-than-expected' story rolling, writes Liam Dann. Read his Premium column here.
• 6.00pm: Beneficiary advocacy group Auckland Action Against Poverty has slammed the Government for its "weak" benefit increase. Read why they think the Government is "moving too slow" here.
• 5.40pm: The world's biggest credit rating agencies have given their take on New Zealand's Budget for 2021. Read their take on NZ's fiscal position here.
• 4.50pm: Was this year's Budget a missed opportunity for IT when issues like cyber-security and a dire shortage of tech workers have loomed so large? Read the technology industry's verdict here.
• 4.45pm: We asked political veterans from the left and right to give us their verdicts on the Budget. Read what Paula Bennett, Sue Bradford, Neale Jones and Jon Stokes had to say here.
• 4.30pm: As part of the Government's "five-point plan for our economic recovery," $44 million will be spent on a digital skills programme for 60,000 small businesses. Read the story here.
• 4.25pm: Grant Robertson has delivered a "fiscally conservative Budget," writes Brian Fallow. Read the Premium column here.
• 4.20pm: The Government has injected $28 million into the battle to save New Zealand's iconic kauri from an as yet uncurable tree-killing disease. Read more about the Government's plan to protect kauri here.
• 4.15pm: Asked how this Budget helps workers and middle New Zealanders, Ardern pointed to the money allocated for infrastructure.
"The investment in infrastructure up and down the country means jobs. Means we are creating a pipeline of work. That's exactly what Kiwis are asking us to do."
Ardern also said the Government are "trying to do our very best by the children of New Zealand".
• 4.05pm: National Leader Judith Collins has called the Budget "a bit disappointing". Collins says it is "ridiculous" that the Government did not put money into Pharmac. Read what the Government has announced for Pharmac here.
• 4.00pm: Opposition leaders have hit out at the Government's Budget with National labelling it the "Broken Compass Budget" and Act calling it the "La La Budget". National Leader Judith Collins said this Budget is "setting New Zealand up to fail" and there is "nothing in there for middle New Zealand." Read the full reaction from the opposition leaders here.
• 3.50pm: Schools and early childhood centres will only see a small increase in their day-to-day funding. However, the Budget has allocated $761 million to build more schools and classrooms. Read everything you need to know about the education announcements here.
• 3.45pm: The Government is spending $36.6 million to help reach it's Smokefree 2025 goal. Read more about this "bold move" here.
• 3.40pm: Almost $132 million is being invested in community and iwi-led programmes to reduce family and sexual violence over four years. Read the story here.
• 3.30pm: The Government has announced a $1.1 billion package for Māori, including nearly a quarter of a billion dollars for health initiatives such as setting up the new Māori Health Authority. Read the story here.
• 3.25pm:From 19.1% to 0.9% - could house price growth collapse by that much? Read Anne Gibson's Premium analysis.
• 3.20pm: Budget 2021 includes funding of $344 million for the redevelopment of Scott Base in Antarctica , which will deliver 170 jobs at the peak of construction and more than 700 jobs over six years. Read the story here.
• 3.15pm: The Government projects between 19,000 and 33,000 children will be lifted out of poverty by 2022/23. Read the story here.
• 3.00pm: Labour has moved to reinstate the Training Incentive Allowance for single parents who are studying or training, taking $127 million from the Covid-19 fund to do so. Read the story here.
• 2.55pm: How the ghost of Ruth Richardson haunts the Budget. Read Audrey Young's Premium column.
• 2.45pm: What are the main highlights from the Budget? Here are 10 things you need to know.
• 2.38pm: Follow all the reaction from Budget 2021 - including the best tweets and memes - in our live blog.
• 2.35pm: After a severe recession in 2020, the economy is expected to expand by 2.9 per cent this year, accelerating to 4.4 per cent in 2023. Read the story here.
• 2.30pm:The Government is scrapping a prior $197 million promise of free annual GP visits and eye checks for senior citizens. Read the story here.
• 2.25pm:The Government is forecasting a significant slowing in house price growth in the coming years, after the New Zealand market's red-hot run. Read the story here.
FULL STORY BEGINS
The Government's first Budget has ticked off some key Labour pledges, spending billions on increasing benefits but keeping a lid on major spending and debt increases.
The headline of Budget 2021 is an up to $55 per week increase in main benefits rates – a move the Government is expecting to lift between 19,000 and 33,000 children out of poverty.
Drug buying agency Pharmac got a $200 million increase as Labour delivered on its election pledge to increase the funding.
The Government has also earmarked $380 million of new funding towards a Māori housing package, expected to deliver another 1000 homes for Māori across the country.
And Finance Minister Grant Robertson is talking up his books, forecasting a significant jump in economic growth, a shrinking deficit and lower than expected levels of debt.
But the effects of Covid-19 are still evident in the budget, with the Government not expected to return to a surplus until 2027.
Prime Minister Jacinda said today's Budget would set New Zealand up to both recover from Covid-19, and be "stronger than when we entered the pandemic".
"Previous economic downturns have made inequality worse," she said. "We're taking a different approach."
At the heart of that approach is a $3.3 billion, over the next four years, spend on boosting benefit levels.
All weekly benefit rates will increase by between $32 and $55 per adult in April 2022.
The sole parent support benefit – which is currently at $398 a week – will jump to $434 a week in April 22.
The jobs seeker support benefit will go from $267 a week to $315 a week – a 17.9 per cent jump.
This follows years of pressure from advocacy groups to raise benefit levels as part of the Ardern's pledge to address child poverty.
There is also a carrot for students – student allowances and loans will go up by $25 a week from April next year.
Social Development Minister Carmel Sepuloni said today's Budget is an example of the "two-birds-one stone plan" the Government is following to emerge from Covid-19 "stronger than when we went in".
"This is not only the right thing to do; it's also good for our economy."
Grant Robertson also used today's budget to highlight 2021 was the 30th anniversary of former National Party finance minister Ruth Richardson's 'mother of all budgets'.
That budget saw a significant drop in social sector spending, including on benefits as the then-Government attempted to balance the books.
"This is the biggest lift in benefits in more than a generation," Robertson said in the Budget lockup.
As signaled in the weeks leading up to the budget, Maori housing gets a big boost in this year's budget.
As well as the $380m for new Māori housing, a further $350m of the previously announced $3.8b Housing Acceleration Fund has been ring-fenced to help enable the construction of more homes for Māori.
"Our people face constant housing challenges… this has been the way for far too long," Associate Maori Housing Minister Peeni Henare said.
According to Robertson, New Zealand's economy has performed better than expected.
This time last year, he was delivering a budget with $50b of new spending initiatives to combat the looming economic downturn of Covid-19.
The Budget reveals that only $5 billion of that fund remains – and will be held in contingency.
Although the economic impact of the downturn is clearly still being felt, New Zealand's economy is doing much better than had previously been expected by the Treasury.
GDP is expected to rise from 2.9 per cent this year, to 4.4 per cent in 2023 and an extra 221,000 extra people are expected to be in employment over the next four years with unemployment expected to drop to 4.2 per cent by 2025.
But the jobless number is expected to peak at 5.3 per cent later this year.
The Treasury is, however, still expecting the Government to produce a deficit for the next six years – producing its first razor thin surplus in 2027.
On the debt front, the total level of money expected to be owed by the Government had dropped by billions of dollars – but the Government is still expected to owe $255b in 2025.
That's 43.6 per cent of GDP – last year, Treasury expected that to be closer to 55 per cent – that's $20b lower than expected.
In terms of house prices, the Treasury is expecting 2021 to be the peak when it comes to growth.
Its expectations of annual house price growth are 17.3 per cent this year – that number drops to 0.9 per cent in June next year and to stay around 2.5 per cent over the coming four years.