Steven Joyce fails to dampen expectations of big spend up in his first Budget

The Child Poverty Action Group is calling for 2011 cuts to Working for Families to be reversed. Photo / 123RF

Finance Minister Steven Joyce has failed to dampen expectations that he has money to burn in today's election-year Budget.

Speculation persists that tax relief will feature large in the new announcements, in the form of Working for Families changes and lifting thresholds at which income tax rates apply.

Labour finance spokesman Grant Robertson is continuing to make the case for a big boost to health, the accommodation supplement and education.

The Child Poverty Action Group is also calling for 2011 cuts to Working for Families to be reversed, annual adjustments and for free doctors' visits for under 13-year-olds to be extended to all young people aged under 18.

Joyce rejected suggestions that Budget spending should be increased by 4 per cent just to keep up with population growth and inflation.

"The Government does not say 'here's the public sector and we should throw a lot more money at [it] regardless of the results that investment would achieve.'"

Productivity was important and the performance of the health sector had improved through setting targets.

The Government has already announced some big ticket items over four years including a $321 million package on social investment, $303 million for big screen grants, $178 million for tourism and over $300 million for the first year of the pay equity settlement with rest home carers.

The new capital allowance the year has been boosted from the $3 billion the Government foreshadowed in December to $ 4 billion - the actual infrastructure on which it will be spent to be outlined today.

An increase in new operating expenditure many also be on the cards in this Budget from the $1.5 billion it foreshadowed in December.

Reducing taxation has been one of the Government's stated Budget priorities since 2014, when it was still in deficit.

But this Budget has been the first year there has been sufficient headroom.

Act leader David Seymour says National has to return some of the forecast surpluses - $24 billion cumulatively over the next four years - to New Zealanders in tax cuts.

Today's updated forecasts are likely to be even brighter than those made in December - the $473 million forecast for the current year has already been overtaken with a $1.5 billion surplus for the nine months to March.

Entitlements to Working for Families, a set of measures that reduce the tax liability of families depending on income, number of children and hours worked, were cut in 2011.

At that stage 421,200 families accessed the credits and the changes were estimated to produce savings of $448 million to the Government coffers.

It dropped to 347,300 families by March 2015.

The average entitlement increased from $4928 a year in 2006 to $6788 a year in 2015.