Official — The Treasury

Budget 2026: where the money goes

Delivered 28 May 2026. A plain-English, non-partisan breakdown of what the Government is spending, by sector — with every figure taken from The Treasury.

This is the Government’s Budget, not a party’s. The Budget is an official document published by The Treasury and presented by the Minister of Finance. It was delivered by the National-led coalition government (National, ACT, NZ First). We present the figures neutrally and don’t take a side on them.Unless otherwise stated, funding refers to total operating expenditure over the forecast period (the four years to 2029/30). Capital funding is a one-off sum.

What Budget 2026 sets out to do

1Gets the books back to surplus and reduces debt as a share of GDP.

2Invests to drive better results in health, education, and law and order.

3Delivers infrastructure projects — hospitals, schools, courthouses, police stations, rail upgrades and a new Road of National Significance.

4Provides temporary, targeted support for households and public services facing fuel-price pressures.

5Advances reforms to increase energy security, boost housing growth and replace the RMA.

6Continues to rebuild the capacity of the Defence Force.

7Changes housing support and funds up to 2,250 more social houses.

8Ends final-year Fees Free, doubles Trades Academy places and funds 1,000 more Youth Guarantee places.

The outlook

Treasury publishes these as forecasts. We quote them as stated and don’t add precise figures beyond what Treasury put in words on its summary.

Economic outlook

Treasury forecasts the economy continuing to grow, with inflation coming down after an initial spike from higher fuel prices.

Economic growth (real GDP)Consumers Price Index (CPI) inflation

Fiscal outlook

Treasury forecasts the operating balance (OBEGAL, excluding ACC) returning to surplus in 2028/29, with net core Crown debt peaking and then declining as a share of GDP.

Operating balance (OBEGAL, excl. ACC)Net core Crown debt

In context — what’s already in place

Health, education, welfare and NZ Superannuation are the biggest areas of core Crown spending (Treasury, forecast core Crown expenses 2026/27).
Government revenue is raised largely from income tax, GST and corporate tax.
New infrastructure funding sits on top of an existing pipeline — around $60 billion is expected to be spent over the next four years.

New Budget funding (below) is mostly money added on top of existing spending — read it against this baseline.

Treasury — How taxpayers’ money is spent

Where the money goes

New funding by area. Each figure is tagged Operating Capital (one-off) Saving so you can see what’s ongoing spending, one-off investment, or a saving.

Health

+$5.5b operating

New funding to support access to timely, quality healthcare.

$5.5bIncrease in funding for frontline health services.Operating
$682mCapital investment, including a new tower block for Whangārei Hospital.Capital (one-off)
$54mAdditional funding for Pharmac to purchase medicines.Operating
$34mFunding for three-day postnatal stays.Operating
$16mSpecialist paediatric palliative care.Operating
$33mExtend National Bowel Screening eligibility to age 56.Operating
$35mBoost support for road ambulance services.Operating

Education

$131m teaching + $470m capital

Supports lifting achievement, and reinvests savings from ending final-year Fees Free into trades and vocational education.

$131mStrengthen teaching and learning in reading, writing and maths.Operating
$470mRedevelop up to 10 schools, deliver up to 232 classrooms, and buy land for new schools.Capital (one-off)
$74mSupport a refreshed curriculum and new national qualifications.Operating
$212mContinue Healthy School Lunches and ECE Food programmes in 2027.Operating
~$1bEnding final-year Fees Free at the end of 2026 (a saving of just over $1 billion).Saving
$69mDouble Trades Academy places to 20,000 for year 11–13 students.Operating
$87m1,000 more Youth Guarantee places (free learning for low/no-qualification young people).Operating
$25mIncrease funding rates for foundation-education providers.Operating

Law & order

$503m Corrections + $50m Police

New funding aimed at reducing crime and community safety.

$503mFrontline Corrections services, including resources to manage prison growth.Operating
$50mAdditional funding for frontline policing.Operating
$215mNew courthouses in Rotorua and new police stations in Whanganui and Greymouth.Capital (one-off)
$21mCustoms — combat drug smuggling and transnational crime.Operating
Funding to reform the firearms safety system.Operating

Infrastructure

$1.8b expressway + $1.2b rail

Funding to build or enable infrastructure. New spending sits on top of an existing pipeline — around $60 billion is expected to be spent over the next four years.

$1.8bBuild the Cambridge to Piarere Expressway (a Road of National Significance).Capital (one-off)
$705m + $477mRenew and upgrade the rail network ($705m capital, $477m operating).Operating + capital
$400mState highway resilience upgrades.Capital (one-off)
$400mNew financial incentive for councils to encourage housing growth.Operating
$294mDrive forward resource management system reforms (RMA replacement).Operating

Social housing & welfare

Up to 2,250 social houses

Changes to the social housing and welfare systems, described by Treasury as improving "fairness and sustainability".

$69mFund up to 2,250 additional social houses.Operating
A fiscally neutral package: increase the Accommodation Supplement for private renters, and increase income-related rents for people in social housing.Operating + capital
$196mLower maximum payments of Temporary Additional Support (a saving).Saving
$45mExtend community food support and kids’ breakfast programmes.Operating
More case management to support sole parents into work.Operating

Cost of living (fuel response)

$50/week In-Work Tax Credit boost

Temporary, targeted support for households and services facing sustained fuel-price increases.

$373mA $50-per-week increase to the In-Work Tax Credit for up to a year, to help working families with fuel costs.Operating
$450mSet aside for additional temporary fuel-related measures, if required.Operating
$150mAdditional strategic fuel reserves to firm up fuel resilience.Operating
$24mTemporary increase in mileage rates for support workers and people travelling for specialist treatment.Operating
Additional funding for Fire & Emergency, Corrections, Police, Customs and Education to maintain frontline operations.Operating

Defence & foreign affairs

$2.3b capital + $1.2b operating

Investment in defence and intelligence capabilities, and promoting New Zealand’s interests overseas.

$2.3b + $1.2bDefence and intelligence capabilities ($2.3b capital, $1.2b operating).Operating + capital
$145mA resilient, safe and secure offshore diplomatic and trade network.Operating
$110mInternational development cooperation, focused on the Pacific.Operating
Retain and grow Defence Force staff; keep Anzac-class frigates and HMNZS Canterbury operational; improve base facilities.Operating + capital

Energy security

Generation + gas transition

Investments to support New Zealand’s energy security.

Capital investment in Genesis Energy to accelerate new generation and firming capacity.Capital (one-off)
A new loan guarantee scheme to support businesses to transition away from gas.Operating

Revenue & tax

New bank levy; FBT simplified

Tax measures to reduce compliance costs, maintain integrity, and retain capital and talent.

A new prudential levy on banks and other financial institutions, to help cover the cost of Reserve Bank regulation and supervision.Operating
Simplify fringe benefit tax (FBT) rules for private motor-vehicle use to reduce compliance costs.Operating
Tax-rule changes to help retain talent and support increased foreign investment.Operating
Tax-rule changes for charities and not-for-profits that support the sector and maintain integrity.Operating

Savings & reprioritisation

$424m + $2b in savings

Savings from agencies, redirected to frontline services or used to reduce future spending.

$424mSavings reprioritised to frontline services.Saving
$2bSavings from future baseline reductions.Saving

Other initiatives

Children, conservation & ID

Other initiatives to improve public services, reprioritise funding and meet commitments.

$184mAdditional for Oranga Tamariki to protect and support children.Operating
$109mBetter control of wilding pines.Operating
$36mMake the SuperGold Card an official form of ID.Operating
New technology to improve the emergency management system.Operating

Put it in context

Compare party economic policy

See how each party’s stated economy and tax policy stacks up against what’s actually budgeted.

Compare all parties

Where every party stands across health, education, housing, crime and more — side by side.

Were the promises funded?

Track the government’s promises against the record (private accountability deep-dive).

Source

All figures from The Treasury — Budget at a Glance, Budget 2026 (delivered 28 May 2026). Arapono summarises the official material and does not reproduce it in full. Always verify against the original.

Budget at a Glance Treasury fiscal data