Robertson said he did not believe the Reserve Bank would need to hike interest rates to deal with his increased spending.
“I don’t think this is the impact of what is in that Budget,” he said.
The key highlights:
Meanwhile Treasury believes a toxic combination of higher interest rates and weak wage growth will smash house prices.
In December, it forecast prices would eventually reach their pandemic peak by 2027 - but now it forecasts no end to the crisis.
Prices will plummet to 21.3 per cent of their pandemic highs, before recovering, ever so slowly - but not regaining anything close to their pandemic peak in the forecast period.
Labour will be hoping the additional spending is enough to win them an election - and this Budget is full of election goodies.
But National says it contains “no ideas” to tackle the underlying causes of inflation and retain skilled Kiwis.
Claire Trevett: So what’s in it for you - the key points of today’s Budget
Audrey Young: A practical Budget for less than simple times (Premium)
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The Government’s 20 hours of early childhood education programme for three-to-five year-olds will be extended to two-year-olds at a cost of $1.2b over the four-year forecast period.
The $5 prescription co-payment will be abolished at a cost of $619m over the same forecast period, meaning people will pay nothing for most prescriptions.
Public transport will be made free for children under 13 and half-price for under 25s, costing $327m over the forecast period.
The Government also announced subsidies to fit 100,000 more insulation and heating retrofits, which it said will reduce energy bills for the vulnerable.
Whanau Ora has been given a boost and kapa haka festival Te Matatini has been given a long-sought funding injection of more than $30m,
Even the gaming sector gets a win, a $40 million a year subsidy, offering a 20 cent rebate on every dollar spent in New Zealand up to a cap.
The industry has lobbied hard for the change - its lobbyists even scored a seat at the Budget lock-up and a patsy question to the finance minister. The film industry also secured a $20m boost.
A new gender budgeting approach has delivered new investments for women. The Government will spend $20m on KiwiSaver contributions that “match” an employer’s contribution to people while they take paid parental leave.
Inflation is everywhere in the Budget. One of the larger announcements was $2.3b in new operating spending over the forecast period to give effect to public sector pay claims under the Public Sector Pay Adjustment.
This Budget was pointed squarely at the election, with Robertson making an oblique reference to National’s tax promises.
“There are many things that the government might like to do, or tax cuts that other parties might decide to promise, but for me keeping our children safe, warm and dry at school has to come first,” Robertson said.
Infrastructure is another big winner, with Labour promising a massive $71b spend on infrastructure over the next five years.
Robertson said this investment would initially focus on the recent weather events, but also include “future proofing road, rail, and local infrastructure wiped out by the extreme weather, as well as telecommunications and electricity transmission infrastructure”.
Infrastructure Megan Woods won $6b for a National Resilience Plan which will go towards “building back better” from recent weather events.
“The North Island weather events have added a level of urgency to our infrastructure investment planning and highlighted the importance of building strong and resilient infrastructure,” Robertson said.
“It was unacceptable that basic lifeline services like telecommunications, power and transport links were knocked out for so long. It identified a serious basic infrastructure problem that this investment will help fix,” Robertson said.
Woods also secured funding for an additional 3000 public homes by June 2025, on top of the 14,050 funded to June 2024
There is also support for Maori housing, which added 322 more homes for Māori and 400 relocatable cabins to assist people displaced by the North Island storms.
The Government snuck in a fairly sizable tax hike - lifting the trust rate from 33 per cent to 39 per cent, netting more than $1.12b over the forecast period .
Robertson denied this was a significant tax change,
“This is a change that we signalled that it would make, we saw evidence that we would make,” Robertson said.
This was a Budget characterised by a number of smaller, niche funding announcements.
The SIS was given $645,000 to improve its “capabilities and activities” in an increasingly uncertain world. It was given an additional $5.98m to fund inflation cost pressures.
Also in the security space, the Department of Prime Minister and Cabinet was given $5.18m to counter foreign interference and enhance “the resilience of New Zealand’s critical infrastructure system in the face of growing foreign interference risks”.
Robertson’s “implementation unit” was given an additional $3.9m to fund another two years of work.
A total of $30m was set aside for a grants scheme to fund zero emissions trucks.
Also, $38m is allocated to establish “market governance regulation” for the Emissions Trading Scheme, which has suffered a collapse in the unit price since last December.
Rather ominously, Robertson has also given $14m to “enhance security measures” at MPs’ homes and offices and at Parliament. The security of MPs has been a concern since the pandemic.
