Health and handouts in NZ budget spend-up

New Zealand Finance Minister Grant Robertson
"The big focus of the budget today is health," New Zealand Finance Minister Grant Robertson says. -AAP Image

The New Zealand government has pushed back a budget surplus to help Kiwis struggling with inflation and fund multi-billion dollar health reforms.

Finance Minister Grant Robertson on Thursday unveiled the 2022/23 budget, posting a headline $NZ19 billion deficit.

New funding went to the long-term challenges of health reform and climate change, though the government also kept its eye on more immediate concerns.

Inflation has hit 6.9 per cent, the highest level since 1990, making relief a political and practical necessity.

Mr Robertson found space for a $NZ350 cost of living payment that will go to 2.1 million Kiwis, a surprise feature of a high-spending budget.

"As we move through these next few months, further targeted support is needed," he said.

More than $NZ1 billion has been set aside for a cost of living package, which includes the new payment, a fuel excise cut and cheaper public transport for an extra two months.

The package is a concession that inflation is hitting Kiwis hard, but Mr Robertson also boasted of government books and an economy the envy of the world.

Treasury says New Zealand's GDP growth has exceeded pre-pandemic projections, despite the tumult of COVID-19.

Unemployment is at a record 3.0 per cent, and forecast to stay below five per cent for the next five years.

Treasury also believes inflation will ease from here on, though stay above three per cent until 2025.

Mr Robertson delighted in comparing New Zealand's debt - scheduled to peak at 19.9 per cent of GDP in 2024 - as "well below the likes of Australia and other countries we compare ourselves to".

"New Zealand has come through the one-in-100 year shock from COVID-19 better than almost anywhere else," he said.

As telegraphed, the biggest new spends are in health and climate change.

A $NZ11.1 billion package over four years will wipe the debt of regional health boards as the government centralises the health system, reversing Helen Clark-era reforms.

"That means funding for wages, more staff, allowing people to do the jobs and focus on patients rather than on their finances," he said.

Public medicines agency Pharmac has also received a $NZ71 million boost, with $NZ166 million more for the ambulance service, $NZ91 million for helicopter ambulances, and $NZ100 more for mental health.

Prime Minister Jacinda Ardern, who has called alleviating child poverty her political mission, said up to 14,000 Kiwi kids will rise above the poverty line through welfare reform.

There is also funding for new parliamentary buildings - the only measure which attracted cross-party support across parliament.

The opposition attacked the budget as "backwards", with deputy opposition leader Nicola Willis saying the cost of living payment was a bandaid solution.

"$350 is enough for a plane ticket into Australia and I'd suggest to you some New Zealanders when they look at these forecasts will be buying their tickets," she said.

The budget comes after Monday's $NZ2.9 billion emissions reduction plan, which includes a cash-for-clunkers scheme, funding for decarbonisation and forestation projects.

The spend-up has pushed the next forecast surplus to 2024/25, a year later than Treasury's previous forecast.

Mr Robertson said the spending imperative was compelling.

"These are the investments that will secure our future," Mr Robertson said.

Ms Ardern missed the budget in parliament as she is isolating with COVID-19, but delivered on her tradition by virtually gifting Mr Robertson a tie on Thursday morning.

* $NZ1 dollar buys $A0.90.