"Moderate", "responsible" and "careful" is how the Government is describing today's Budget.
In a matter of hours, New Zealand will find out how much money the Government has to spend and what it will be spending it on.
Finance Minister Nicola Willis has previously said it won't be a big-spending Budget but doesn't go as far as austerity. Quoting rock band Florence & The Machine, she said it will be the "darkest before the dawn".
She has warned the country's deficit is expected to worsen in the coming years before starting to improve.
"This reflects, for the most part, the deterioration in the economy and downgrades to the forecasts for GDP and tax revenue. It does not reflect the Government’s fiscal decisions in the Budget," Willis added.
In fact, on Monday Willis said economic forecasts have continued to be downgraded since the Coalition Government came into office and Kiwis can expect to see that on Budget Day.
Alongside the Budget, the Treasury publishes its latest Economic and Fiscal Update (BEFU) which shows its economic outlooks and forecasts. Willis has already acknowledged that achieving a surplus in 2026/2017 is not achievable while a surplus in 2027/2028 is still achievable - but is not a given.
Willis said over the past six months, Government Ministers have identified more than 240 individual saving initiatives to be included in the Budget.
"New Zealanders will be surprised at exactly where so much of their money has been going. We have uncovered a layer cake of government initiatives, many of which we have never heard of before, which were absorbing tens of millions, if not hundreds of millions of dollars," Willis said.
She said some of the saving initiatives will reduce the amount of funding for a particular activity while others will be stopped altogether.
"Each of these individual savings will be included in the Budget documents," Willis said.
"This means our Budget will read differently from Budgets in recent years. Instead of being a confetti of new spending ideas, you'll also see examples of careful reprioritisation in almost every area of government."
Willis said the operating allowance – the amount of money allocated to fund new spending and revenue initiatives – will be set at less than $3.5 billion for the coming Budget.
Tax cuts and all the other Budget priorities
The National Party campaigned hard on providing tax cuts to what it described as "the squeezed middle".
In the election campaign, National said its tax relief plan would come in the form of adjusting tax brackets. Willis said an official tax calculator for households to work out their savings will be released alongside the Budget.
Earlier this month, Willis said 83 percent of New Zealanders could expect to see tax relief in Budget 2024. She added the tax cuts will be aimed at middle and lower-income workers across the country.
"The relief will be meaningful, but modest," Willis said.
How the Government will fund the tax cuts will be something to look for in the Budget.
National had planned to partly fund the cuts with a foreign buyers' tax, however, part of its Coalition agreement with NZ First was to scrap the foreign buyer tax. Instead, the tax reductions would be funded through a "mixture of savings, reprioritisation and additional revenue sources", Willis said.
The Budget will include a list of 240 programmes that have been cut amid the Government's drive to reduce public spending.
Part of the Government's public service cuts will also go towards funding the tax cuts. However, some of the savings will be cycled from the "back office" to frontline services.
Identifying savings across government departments and focusing spending on priorities including health, education, and law and order are other priorities in this Budget. Latest official advice found 3900 jobs (2750 filled roles and 1150 vacancies) would be cut, however, the number of jobs created by the Government would be higher, Willis said. She also wouldn't rule out any further changes to workplace structures after the Budget.
There will also be a limited number of high-priority Government policy commitments and urgent cost pressures that cannot be funded through reprioritisation, along with developing a long-term pipeline of infrastructure investments.
The Government has already made a few pre-Budget announcements in the led-up to Thursday such as funding for charter schools, changes to the school lunches programme, funding for Gumboot Friday, more prison beds, and a top-up for Pharmac.
All the rest of the Government's spending plans will be revealed to the public at 2pm tomorrow.
"Budget 2024 begins that process by bringing government spending back under control, delivering responsible tax relief and focusing on the economic and fiscal fundamentals that make the greatest long-term difference to the quality of life in New Zealand," Prime Minister Christopher Luxon said.
