The Government's first Budget has delivered a big boost for public services including $3.2 billion extra for health services over four years - and a large-scale state house building programme.

Spending on prison services goes over $1 billion for the first time and Corrections gets funding for pop-up prison units to house an extra 600 prisoners.

And an extra $1.6 billion for education will go to early childhood education and a boost for students with higher learning needs.

But health is the biggest winner, with the Government saying the system was starved of funding under the last administration.


Finance Minister Grant Robertson said public services had been underfunded for too long.

"Budget 2018 begins the economic and social transformation that must happen if New Zealanders are to have better lives in the decades to come."

It was the largest injection into the health sector for a decade, he said.

Finance Minister Grant Robertson receiving a hug from Prime Minister Jacinda Ardern after reading his Budget. Photo / Mark Mitchell
Finance Minister Grant Robertson receiving a hug from Prime Minister Jacinda Ardern after reading his Budget. Photo / Mark Mitchell

As well as the $3.2 billion new operating funding for health, there would be an additional $750 million for capital spending, which compared to $150 million in the last National Government's Budget.

Free doctor visits will be extended a year from under 13s to under 14-year-olds and community card holders will get cheaper visits.

Community midwives will get an 8.9 per cent boost in their fees but Robertson was adamant that that should not be taken as a signal for other state sector pay negotiations.

It was special case to address an inequity with hospital-based midwives.
An extra 6400 state houses will be built over four years.

New Zealand First's big Budget items, for Foreign Affairs and the Provincial Growth Fund, were pre-announced.

Finance Minister Grant Robertson is congratulated by Prime Minister Jacinda Ardern and his government colleagues after reading his Budget. Photo/ Mark Mitchell
Finance Minister Grant Robertson is congratulated by Prime Minister Jacinda Ardern and his government colleagues after reading his Budget. Photo/ Mark Mitchell

But the Green Party's $100 million green investment fund, negotiated in the confidence and supply agreement, was confirmed in this Budget.

The amount of new operating money Robertson had to allocate for this year's Budget increased from $2.6 billion to $2.8 billion because of extra tax revenue – and increased over four years from $21 billion over four year to $24 billion.

New capital allocations increased from $3.4 billion to $3.8 billion. Allowances for future years of expenditure have been adjusted upwards as well.

The books show a forecast surplus for the 2018 – 19 year of $3.7 billion, up from the half-yearly forecast of $3.1 billion.

Treasury forecasts economic growth to average 3 per cent a year over five year, up marginally.

Real wages are forecast to grow each year with annual average earnings rising to $71,000 by 2022.

Among the Budget documents is breakdown of how the Government's extra spending has been funded: 38 per cent from adopting a slower debt track than National; 33 per cent from reversing National's tax cuts; 23 per cent from extra revenue from growth in the economy; and 6 per cent from cutting previous programmes and greater compliance on tax collection.

Robertson has also announced that consultations will begin soon on Independent Fiscal Institution, which was part of Labour and the Greens' Fiscal Responsibility Rules.

Among their tasks would be to independently cost political promises during an election year. Australia, Canada and Britain had similar institutions.

Responding today in the House, Opposition leader Simon Bridges said the "Tax more and borrow more" Budget breaks coalition promises.

It had promised no new taxes, but had introduced regional fuel taxes, an extension to the bright line test, and excise taxes, National's leader said.

National leader Simon Bridges during his Budget speech in Parliament. Photo / Mark Mitchell
National leader Simon Bridges during his Budget speech in Parliament. Photo / Mark Mitchell

"More than $2b more in tax over the next four years, whereas we were giving New Zealanders … tax relief," Bridges said.

Of the $40b in spending over four years, the Government was spending close to $1b on foreign affairs.

He repeated his line that the Government was spending on "diplomats not doctors" - though most of that $1b will go towards foreign aid in the Pacific.

Prime Minister Jacinda Ardern hit back, describing Bridges' post-Budget speech as "Ninety minutes and 30 seconds of shouting".

Ardern said she was proud of today's Budget and had heard a number of names to describe it, including the "spray and walk away budget''.

Prime Minister Jacinda Ardern during her Budget speech in Parliament. Photo / Mark Mitchell
Prime Minister Jacinda Ardern during her Budget speech in Parliament. Photo / Mark Mitchell

She acknowledged she did not take offence to that, however, as she remembered it was a mould and algae remover.

Ardern said no decision in the Budget was taken lightly. Every dollar spent was considered, prioritised and balanced.

She said National should not be lecturing the Government on debt, having borrowed $50b while in power.

Claims that Labour was spending less on health was false, she said. National had factored in the $1.5b pay equity settlement in its funding, which was "not comparing apples and apples", she said.

"I am happy to debate this Budget, but let's debate the facts not Facebook memes," she said.

The big winners

Health: $3.2 billion injection over four years, including $2.2b more for DHBs and $126m for elective surgeries and other areas. $750m for hospital upgrades and rebuilds.
Cheaper doctor visits for more than 500,000 people. Free GP visits extended to 13-year-olds (56,000 more children). About 540,000 people eligible for Community Services cards will get $20 to $30 cheaper GP visits. Cost $385m.
Midwives: $112m more for community midwives, including 8.9 per cent fee increase to level them with DHB midwives.
Housing: $3.8b to build 6400 more state houses by 2022 - and $170m for emergency housing. Insulation subsidies for low-income families. HNZ to borrow $3b.
Education: $395 million to build new schools and classrooms.

What they said

Prime Minister Jacinda Ardern: We have stuck to our plan

Finance Minister Grant Robertson: A lot in this Budget for businesses

National leader Simon Bridges: Budget won't help business confidence

Budget 2018 summed up

Budget 2018: What's in it for you and your family

Grant Robertson's Budget 2018: At a glance - what you need to know

Budget 2018: Winners and losers

Budget 2018: Greens defend share of wins after NZ First gets triple the cash

Explore our Budget 2018 interactives

Interactive: Crunching the numbers - Budget 2018 in detail

Interactive: A graphical walkthrough of Budget 2018

Budget 2018 opinion

Audrey Young: Jacinda Ardern was right about the Budget - not boring but not exciting

Barry Soper: The Budget that didn't tell us anything we didn't already know

Liam Dann: Subtle vision requires bold sales job


Budget 2018: What it means for the property market

Budget 2018: Govt plans to build 6400 state houses

Budget 2018: 6400 new state homes - Judith Collins says 'disappointing'

Budget 2018: New housing funding praised, but industry figures urge Govt to act fast

Budget 2018: Treasury halves forecast progress on KiwiBuild


Budget 2018: The gift that keeps on giving – our economy

Budget 2018: Rising wages to push people into higher tax bracket, yielding Govt $5.7b

Budget 2018: Tax crackdown to raise $183 million in revenue in next four years

Budget 2018: Govt sets aside $1b for R&D tax rebates

Budget 2018: New watchdogs for election spending promises, RMA, and EQC disputes


Budget 2018: Big cash injection for 'starved' health system

Budget 2018: Funding boost into fixing hospitals: 'only scratches the surface'

Budget 2018: Government rejects claim by National that its boost to health funding was larger

Budget 2018: Lack of Whānau Ora funding a 'kick in the guts', says Māori Party

Budget 2018: Pharmac to buy all medicines for DHBs


Budget 2018: $100m for America's Cup in Budget


Budget 2018: Schools get a boost, but not by much

Budget 2018: Schools: 'We're not going backwards'

Budget 2018: Māori education and training in focus

Budget 2018: Grant Robertson finds $24 billion extra spending

Budget 2018: Funding for vulnerable children receives mixed response

Budget 2018: Relief for KidsCan as more funding comes through


Budget 2018: Special units in PM's Department to drive child poverty reduction policy

Budget 2018: Good start but more needed to address housing crisis and child poverty, say Sallies and Union

Budget 2018: Focus on child poverty with extra funding for new reduction units, Oranga Tamariki

Budget 2018: Government is failing beneficiaries, advocates say


Budget 2018: Auckland receives money for America's Cup, trams and state housing

Wellington mayor Justin Lester welcomes Budget 2018

Christchurch rebuild

Budget 2018: Megan Woods announces Canterbury's rebuild to get $300m "shot in the arm"

Budget 2018: Christchurch gets money for insurance tribunal, public inquiry and anchor projects


Budget 2018: Govt allocates $85M to fight cattle disease

Budget 2018: Spending on M.Bovis could be too low - Fed Farmers

Budget 2018: Environment: 'greenest Budget ever' says James Shaw

Budget 2018: More money for predator control, biodiversity and green projects


Budget 2018: $34m to tighten screening of migrants coming to NZ

Budget 2018: Labour Inspectorate gets $8.8m boost for more inspectors

Law and order

Budget 2018: Age for youth justice system increases to 17 to ease remand population

Budget 2018: Corrections gets boost to cope with fast-growing prison population

Budget 2018: $300m boost for police 'commended' by association


Budget 2018: Media allocation falls short of $38M promise, Minister says more to come


Budget 2018: NZDF gets $360m funding boost, with extra $40m going to modernisation


Budget 2018: Production Commission to investigate impact of disruptive tech

Budget 2018: Few surprises in Govt's science and tech spend


Budget 2018: Tourism New Zealand takes a cut for marketing the country