Budget 2022: What can Kiwis expect from Government's mega spend, what's already been announced?

Budget 2022 has rolled around, promising a significant investment in the major changes coming soon to New Zealand's health system.

It's the day marked in political nerds' calendars when Treasury opens the finance books, shining a light on the country's economic condition, and the Government reveals the multitude of initiatives it's pumping new spending into.

The scale of that spend-up ($6 billion in operating allowance) has been defended by the Finance Minister as necessary for "the transformation of the health system" as the new entities Health New Zealand and the Māori Health Authority are established. It's "one-off" spending, according to Grant Robertson, with operating allowances to return to usual levels in following years.

But it's come under criticism from the Opposition concerned that channelling so much cash into the economy isn't a smart idea during a time of 30-year-high inflation.

One of the main questions swirling around the Budget, to be unveiled publicly at 2pm on Thursday, is whether it will address the current cost of living crisis. 

The recent jumps in prices - which the Government blames international supply chain issues and the war in Ukraine for - weren't Kiwis' main focus when ministers first began knuckling down on the Budget, meaning it's unclear how much of a priority that will be in Thursday's document.

So what can we expect to see in the Budget, what are politicians anticipating, and what's already been announced?

Budget 2022: What can Kiwis expect from Government's mega spend, what's already been announced?

What to expect from Budget 2022

In December's Budget Policy Statement - which outlines the Government's intentions for the Budget - Finance Minister Grant Robertson made it clear that pumping money into the health reforms and addressing climate change would be the key focus.

On July 1, New Zealand's 20 District Health Boards (DHBs) will be replaced with a single entity - Health New Zealand. It will akin to the UK's NHS, responsible for the implementation of health initiatives. The Ministry of Health will move into a more strategic and policy-orientated role.

At the same time, the Government's also establishing the Māori Health Authority, which will be tasked with commissioning services and achieving equitable outcomes for Māori. However, that entities' future could be in doubt if National gains power after next year's election.

"It will be about setting up a national health system that can meet the needs of our nation," Robertson said at a pre-Budget breakfast. "It will be about setting up the infrastructure that will direct the attention of our health workforce to where the need for care is greatest, not to where the vagaries of our current structures direct them."

Newshub understands Budget 2022 will see a significant investment in Māori health that could rival the $1.1 billion package delivered at last years Budget, which included $100 million towards the health authority. Earlier this year, the Government announced $22 million from the Budget 2021 funding would be allocated to a number of Māori health services. 

Finance Minister Grant Robertson.
Finance Minister Grant Robertson. Photo credit: Getty Images.

Keeping with health, there's also a chance dental care gets some love, and if not on Thursday, then possibly at next year's Budget. A Newshub-Reid Research poll on Tuesday revealed 83.7 percent of Kiwis want the Government to subsidise dental care to make it cheaper for adults. 

Asked for his response to that, Health Minister Andrew Little told Newshub: "It's an area we need to give attention to at some point". While Kiwis aged up to 18 get support to pay for their dental care, Little believes after that point "there is a lot of room for improvement". 

Labour promised $176 million for more emergency dental grants at the 2020 election. Asked if the party had broken that promise in government, Little said the commitment would last through until next year's election, suggesting action will come at some point. 

But how much of that $6 billion operating allowance pie will be left for other initiatives?

Climate action, the other main focus, got its day in the sun on Monday when the Government released its Emissions Reduction Plan, which contains hundreds of actions ministers want to take to cut down our greenhouse gases. 

However, that's funded out of the Climate Emergency Respond Fund (CERF). It was established last year and is funded from revenue out of the Emissions Trading Scheme (ETS), meaning polluters pay for their emissions.

On Monday, Robertson announced $2.9 billion in CERF funding would be allocated. While much of it was - including $1.2 billion for transport and $710 million for agriculture - a line in Robertson's press release stood out.

"A small number of CERF initiatives will be announced on Budget Day and are not included in the package announced today."

Climate Change Minister James Shaw.
Climate Change Minister James Shaw. Photo credit: Getty Images.

The Government's come under pressure to respond to the skyrocketing cost of living, which has really ramped up over the last five months as Omicron swept the globe and Russia invaded Ukraine.

So what could it do to respond? And even more, what could it do to respond that would also help bring down emissions, therefore being seen as a climate action as well?

Making half-price public transport fares permanent could be one option. 

The Government did this for a three-month period from March in the face of growing frustration over transport costs. To say the policy has gone down well would be an understatement, with a third more people using public transport in Wellington and a 50 percent increase in Auckland.

A Newshub-Reid Research poll earlier in May found 66.9 percent of Kiwis supported keeping the half-price fares and the Climate Change Minister gave a strong hint the Government would listen to the "evidence". 

"It's clear those half-price fares have led to a massive increase in the number of people who are taking various forms of public transport," James Shaw told Newshub at the time. "I think what you'll see in the plan is we're going to work with the evidence that's been provided to us."

That plan he refers to is the Emissions Reduction Plan - except there was no mention of reducing public transport fares in it on Monday. That's despite the discussion document for the plan released last year specifically mentioning "reducing public transport fares" as a proposed idea.

Could it instead be announced at Thursday's Budget? Robertson has been tight-lipped about it, but repeatedly said the Government's original decision to halve prices was taken "on a temporary basis" and it would be reviewed at a later point.

Other things to look out for include possible support for Kiwis with disabilities - the new Ministry for Disable People will come in to effect in July - and if there will be another increase to benefits.

Treasury will also publish the Budget Economic and Fiscal Update (BEFU), which sets out how the Government is doing with the likes of debt, unemployment, and inflation. It also includes the all-important OBEGAL (operating balance before gains and losses), which forecasts when we might next be in the black.

National's Christopher Luxon.
National's Christopher Luxon. Photo credit: Getty Images.

What do politicians want?

Budget 2022 will largely reflect the Labour majority's vision for New Zealand. The Greens - via their two ministers - will have had some input in their areas, but parties will be waiting eagerly to find out how the Government is spending Kiwis' money.

"What we are looking for very clearly is what is this Government going to do to help the squeezed middle, those are the people that are actually not getting government assistance, but not wealthy enough to be able to power through this cost of living crisis," said National's Christopher Luxon on Wednesday.

He wants to see discipline from the Government with its spending and for that to result in real outcomes.

The party's deputy leader, Nicola Willis, said if the Budget doesn't prioritise relief for those middle-income New Zealanders "then the Budget fails".

Greens co-leader Marama Davidson said there's been some "good stuff" on climate announced, but "there's even more" the party wants.

"Free public transport would be amazing for people's pockets, would be amazing for the environment, and obviously for emissions. We would love to see a particular focus on Māori and Pasifika health providers."

She said they will become very important as New Zealand enters the flu season.

"We'd love to see nurses better supported, we'd love to see some more funds in ACC for birth injuries. There's a whole lot of stuff we've spoken to, that we would love to see in the Budget."

ACT's David Seymour.
ACT's David Seymour. Photo credit: Getty Images.

The Budget may not have been delivered yet, but ACT's David Seymour has already predicted it will be known as the "Brain-drain Budget".

"For the simple reason, that people who rely on working and their own efforts to get ahead will find that there is nothing in it for that squeezed middle," he said.

"Young people, in particular, will ask themselves, with higher housing prices and lower wages in New Zealand than across the ditch or further afield, why not go?"

He expects the Budget will ignore real pressures on Kiwis.

Te Pāti Māori's Rawiri Waititi wants the Budget to prioritise "by Māori, for Māori kaupapa and investment", saying the party expects the Māori Health Authority to have equitable funding to Health NZ.

Co-leader Debbie Ngarewa-Packer wants "cost of living urgently addressed".

"We need to have more kai on the table for our whanau, the ability to be able to have not motels as a housing solution, and we need to be able to see GST taken off kai, we need to see a capital gains tax and a redistribution of the wealth in Aotearoa."

She also wants to see half-price public transport fares continued.

Robertson said the Government is making sure it finds a "careful balance in this Budget between supporting people in the here and now, but also not letting issues like health and climate change get away on us".

"I think we have struck a good balance in the Budget."

The Māori Party co-leaders.
The Māori Party co-leaders. Photo credit: Newshub.

What's already been announced?

In the lead up to the big day, the Government makes an assortment of what are called "pre-Budget" announcements. They're typically initiatives ministers want the public to take note of, but might be overlooked if left to Budget day. 

The announcements made ahead of Thursday include funding to tackle truancy and ensure tamariki are engaged in their learning. There's also $90 million to expand an in-school mental wellbeing programme to outside of Canterbury.

More than 60,000 New Zealanders are expected to benefit from funding to support them getting their driver's licence, while $15 million is being directed towards youth development to "develop the skills and connections needed to take part in society". For those wanting to upskill in the trades, the Government's extending the Apprenticeship Boost scheme.

There's also $114.5 million to enact the national strategy to eliminate family and sexual violence, and money is being put up into supporting police to tackle gangs.

More than $110 million is also going into biosecurity to protect New Zealand's environment and primary sector as the country reopens.