The days of big Budget handouts are long gone and New Zealanders need to get used to the "new normal" that is frugal Government spending.

That was the message of Prime Minister John Key in his post-Budget address at a Trans-Tasman Business Circle function this afternoon.

"The days of Budgets being these massive hand-outs of money we don't have, I think, are gone," he said.

"The new normal is the Government learning to live with about a billion dollars - maybe a billion-and-a-half dollars.


"Those days of three, four and five billion dollars' worth of extra expenditure are over."

Read more: Paul Henry mobbed by protesters outside SkyCity

His comments followed Thursday's Budget in which Finance Minister Bill English continued to keep a tight hold on state spending.

Key used his speech to talk up the Government's moves to address poverty, including a $25 a week increase in benefits for families on welfare and a lift in in-work tax credits for working families.

"We have a responsibility to lock after those who are most in need," he said.

Key said 110,000 families relied on benefits to support around 190,000 children.

Including Working for Families tax credit increases, up to 500,000 children would benefit from the changes, he said.

But those measures did not stop today's event being targeted by a rowdy group of anti-poverty protesters, led by veteran activist Sue Bradford, who police blocked from entering the SkyCity events centre.


Sarah Thompson, spokeswoman for the group, Auckland Action Against Poverty, said yesterday's Budget allocations aimed targeting poverty were a "mean trick" aimed at fooling the public into thinking the Government was trying to affect real change.

"The $25 they are putting towards beneficiaries is too little too late and at the same time they are expecting parents [on benefits] with children who are three to enter the workforce," Thompson said.

"What this means is there will be associated costs such as childcare, travel and clothing. The [extra] $25 will go nowhere to cover those costs."

Finance Minister Bill English, with Prime Minister John Key, on his way to the House to read his Budget 2015. Photo: Mark Mitchell.
Finance Minister Bill English, with Prime Minister John Key, on his way to the House to read his Budget 2015. Photo: Mark Mitchell.

Key said the Government's efforts to address poverty had been lost on the protesters.

"We're the first the Government to raise benefits in 43 years - I would have thought they'd be cheering out there," he said.

Talking to media after his speech, Key said he often saw the rationale behind protests.

"But protesting about child poverty when we're the first Government to raise benefits in 43 years, you just start saying they are protesting for the sake of it."

Through a new requirement announced in the Budget, parents on the benefit will be required to look for work when their youngest child turns three, down from five previously.

Key said there would be "no sanctions" on beneficiaries who genuinely could not find work.

"We've built in quite a lot of flexibility in the way that we deal with childcare and other initiatives," he said.

"We know that the way out of poverty is through work."

Key also defended a new travel levy that will increase the cost of a return flight out of New Zealand by about $22.

The levy is expected to bring in roughly $100 million annually, which will be used to boost border protection.

"I'm the Minister of Tourism and I'm very, very confident that it [the levy] won't make a blind bit of difference to [the tourism industry]."

Key rubbished Labour leader Andrew Little's comments that it was unfair for people aged over 65, who continued to work, to also collect superannuation payments.

"I think that would be grossly unfair to start means testing super," he said.

Key said the $1000 KiwiSaver kick-start, which the Government axed in Thursday's Budget, was no longer required.

"It's a well ensconced system now," he said.

"If you leave school tomorrow, and go and get a job, the first thing HR will ask you is, 'Do you want to join KiwiSaver?' You don't need $1000 for a scheme that's pretty much getting everybody in and two-and-a-half million people are in it."