Budget 2025: Watch: Nicola Willis speaks on Budget at Hutt engineering firm

Finance Minister Nicola is visiting an engineering firm in Wellington’s Hutt Valley this morning, speaking about her Budget’s flagship policy: a tax change that will stimulate economic growth by encouraging investment.

Willis is set to speak at 8.10am. The speech will be live-streamed at the top of this story.

The speech follows a challenging Budget, in which the Government pared back some subsidies and ploughed that money into pro-growth tax

New Zealanders will get less from the Government in their retirement savings and child support payments in a Budget that hits some households in the back pocket while also offering financial relief in other areas.

Willis pitched it as “a responsible Budget to secure New Zealand’s future”. Opposition parties said it was an “austerity Budget” that would penalise low-income workers and those saving for their pension.

A series of changes will hit many New Zealanders financially.

People who are contributing to KiwiSaver could, until now, get $521 from the Government a year, but that has been halved. The Government contribution to KiwiSaver will also be means-tested for people earning $180,000 a year.

For those already in the scheme, the Government is asking them to contribute more, gradually lifting the default rate of employee and matching employer contributions from 3% to 4% between next year and 2028. For those who are too young to sign up, eligibility will be extended to 16- and 17-year-olds.

The Best Start payment, worth up to $73 a week for new parents, will no longer be available to all families in the first year.

The payment – a signature policy of former Prime Minister Dame Jacinda Ardern – will now be means-tested in the first year. It was previously only means-tested in a child’s second and third year.

Student loan borrowers will soon start paying more. The Government has frozen the repayment threshold at $24,128, rather than letting it rise in line with inflation. For every dollar a borrower earns over this amount, they pay 12 cents off their loan.

There were also significant changes to the welfare system, though they will not kick in until 2027. At that point, nearly 9000 young people will no longer be eligible for the unemployment benefit if their parents are deemed capable of financially supporting them.

“We’re clearly saying that 18- and 19-year-olds who don’t study or work and can’t support themselves financially, should be supported by their parents or guardians, not by the taxpayer,” Social Development Minister Louise Upston said.

A parental assistance test will be introduced for those who are not working, in study or in a long-term relationship. That test will ask whether a young person “can reasonably be expected to rely on their parents or guardians for support”.

The spate of changes contributed to $21 billion in savings over four years. By far the largest portion of those savings came from reforms to the pay equity regime, which totalled $12.8 billion over four years.

That prompted Labour leader Chris Hipkins to describe it as a “worth-less” Budget that “left women out”.

He singled out the changes to KiwiSaver, saying they would “steal” $66,000 from the retirement savings of an 18-year-old entering the scheme today.

Speaking in Parliament, Willis said it was not an easy Budget to put together. She had to strike a careful balance between investing in public services while driving long-term reforms to lift investment and productivity.

“Every Kiwi can know that this is a government that has their back,” she said.

Among the Budget cuts were a number of initiatives to ease the cost of living.

Around 140,000 families would get up to $23 more a fortnight through an amended Working for Families. Households would now be able to earn more – $44,900 – before their tax credit began to be clawed back. The average increase would be around $14 a fortnight.

However, the rate at which the tax credit was reduced would be increased from 27% to 27.5%. That meant when a household’s income rose, their tax credit would be reduced faster than before.

In a significant move for patients, the duration of a prescription will be extended from three months to 12 months.

SuperGold cardholders would be given a more generous rebate scheme, which Willis said had originated from the National-NZ First coalition agreement.

The threshold at which SuperGold cardholders are eligible to receive rates relief will rise from $31,510 to $45,000 – about the rate for a couple receiving superannuation. The maximum rebate will increase from $760 to $805.

And in a surprise move, the Government announced a large increase of $266m over four years in learning support, influenced by its social investment approach.

That included extending an early intervention service that helps children with learning difficulties, more resources and secure funding for students with high and complex needs.

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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.