NZ Budgets 2022–2026 and current fiscal headroom

All figures NZD, nominal. "Operating" amounts are average per annum over the 4-year forecast period unless stated. Capital amounts are one-off totals. Net = after savings, reprioritisation and revenue raising.

Budget 2022 (19 May 2022, Labour, Robertson)

• Operating allowance $5.9b/yr. The core operating package came to $31.6b over 5 years. It included multi-year health and justice funding pre-committed against Budget 2023 ($2.0b/yr) and Budget 2024 ($0.4b/yr), plus $1.0b repurposed from the COVID-19 Response and Recovery Fund (CRRF).
• Capital: $4.7b of new capital (health, education, transport) from the Multi-Year Capital Allowance (MYCA), leaving $5.1b in the MYCA.
• Key initiatives: $11.1b for health system reform and deficits (Health NZ set up); $2.9b from the Climate Emergency Response Fund (CERF, funded by ETS proceeds); $1b cost-of-living package, including a $350 Cost of Living Payment ($814m) and an extension of the fuel excise cut.
• Tax: no major rate changes.
• Future operating allowances it set: B23 $4.5b, B24 $3.0b, B25 $3.0b.
• Sources: https://www.treasury.govt.nz/sites/default/files/2022-05/b22-at-a-glance.pdf ; https://www.treasury.govt.nz/sites/default/files/2022-05/befu22.pdf (Tables 2.7–2.8)

Budget 2023 (18 May 2023, Labour, Robertson)

• Operating package $4.8b/yr, including the $2.0b/yr pre-committed in B22. A further $1.0b of operating came from CERF.
• Capital package $10.7b. A new $6b National Resilience Plan (NRP) was also set up.
• Key initiatives: 20 hours free ECE extended to 2-year-olds ($1.2b); $5 prescription co-payment removed ($619m); free public transport for under-13s and half price for under-25s ($327m); cyclone recovery ($609m operating plus $195m capital); 3,000 public housing places ($3.1b capital); education $3.6b operating.
• Tax: trustee tax rate raised from 33% to 39% from the 2024/25 income year (about $1.1b over 5 years in BEFU23).
• Savings: $4b of savings and reprioritisation plus $1.3b of extra revenue.
• Future allowances: B24 $3.5b, B25 $3.5b, B26 $3.5b. A $3.1b capital allowance was left for B24–B26.
• Fiscal rules at the time: OBEGAL surplus by 2025/26, then 0–2% of GDP; net debt ceiling of 30% of GDP (old net debt measure).
• Sources: https://www.treasury.govt.nz/sites/default/files/2023-05/b23-at-a-glance.pdf ; https://www.treasury.govt.nz/sites/default/files/2023-05/befu23.pdf (Table 2.3)

Budget 2024 (30 May 2024, National-led coalition, Willis)

• Operating package $3.2b/yr net, against a signalled allowance of $3.5b. Gross cost was $9.1b/yr, offset by $5.9b/yr of savings and revenue. The figures include the December 2023 mini-Budget and pre-commitments.
• Tax relief package $3.68b/yr, funded by $3.71b/yr of savings and revenue:
  • Income tax thresholds plus wider eligibility for the independent earner tax credit (IETC), $2.57b. From 31 July 2024 the brackets became 10.5% to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000 and 39% above that.
  • In-work tax credit (IWTC) increase $0.15b; FamilyBoost ECE payment $0.18b; interest deductibility restored for residential rentals $0.73b; bright-line test change $0.05b.
  • Funded by: baseline savings not reprioritised $1.22b; closing Labour programmes $0.78b; climate dividend $0.60b; removing depreciation on commercial buildings $0.58b; immigration levies $0.13b; switching Fees Free from first year to final year $0.22b; tax compliance $0.15b; online casino tax $0.05b.
  • Tax revenue effect: about -$2.3b/yr on average (BEFU24 Table 2.3).
• Other operating funding: health $2.01b/yr (including $1.77b for Pharmac over 4 years); education $1.01b/yr; law and order $0.46b/yr.
• Capital: net $2.4b ($6.7b gross less $4.3b of savings, including the return of the NRP). The MYCA was topped up by $7.0b, leaving $7.5b for B25–B27. Also $4.1b of Crown funding for the National Land Transport Fund (NLTF) and a $1.2b Regional Infrastructure Fund.
• Savings programme: agency baseline cuts, and the NRP and CERF were closed.
• Future allowances signalled then: B25 $2.4b, B26 $2.4b, B27 $2.4b.
• Sources: https://www.treasury.govt.nz/sites/default/files/2024-06/b24-at-a-glance.pdf ; https://www.treasury.govt.nz/sites/default/files/2024-05/befu24.pdf (Tables 2.3, 2.4, 2.8)

Budget 2025 "Growth Budget" (22 May 2025, Willis)

• Operating allowance $1.3b/yr net, the lowest in a decade. Gross new spending was $6.7b/yr, offset by $5.3b/yr of savings, reprioritisation and revenue.
• Capital: $6.8b of new capital within a net capital allowance of $4.0b.
• Key initiatives:
  • Investment Boost, $1.66b/yr: an immediate 20% deduction on new business assets.
  • Health $1.75b/yr; defence and foreign affairs $0.48b/yr; education $0.38b/yr; law and order $0.26b/yr; Disability Support Services $0.26b/yr.
  • Capital: more than $1b for hospitals, $734m for schools and $2.7b for Defence.
• Tax and KiwiSaver changes:
  • Default KiwiSaver contribution rises from 3% to 3.5% (1 April 2026) and then 4% (1 April 2028).
  • The government contribution was halved to 25c per $1 (maximum $260.72) and removed for incomes above $180k, from 1 July 2025.
  • Working for Families (WFF) abatement threshold and rate raised; the first year of Best Start is now income-tested.
• Savings: pay equity regime changes cut the pay equity contingency by about $12.8b over 4 years (about $2.7b/yr). This figure comes from secondary reporting; the BEFU25 PDF was not retrievable.
• Sources: https://www.treasury.govt.nz/sites/default/files/2025-05/b25-at-a-glance.pdf ; https://www.rnz.co.nz/news/politics/561806/budget-2025-coalition-claws-back-savings-from-pay-equity-kiwisaver-best-start ; PREFU 2026 Table 2.6 (B25 gross $6.68b, savings $5.34b, net $1.34b)

Budget 2026 "Securing NZ's Future" (28 May 2026, Willis)

• Operating package $2.1b/yr net, against a signalled allowance of $2.4b. Gross $3.8b/yr ($14.7b over 4 years), offset by $1.7b/yr of savings and revenue ($6.4b over 4 years). Net is $8.27b over 4 years.
• Capital package $5.7b net ($6.96b gross less $1.26b of savings). Includes Cambridge–Piarere Expressway $1.8b, rail $705m capital plus $477m operating, and Defence $2.35b capital plus $1.16b operating.
• Operating by sector (4-year totals): health $5.84b; education $2.02b; defence $1.16b; law and order $1.08b; social housing and welfare $0.82b; transport $0.48b; housing $0.43b; energy $0.20b; other $2.65b.
• Fuel and Middle East response: IWTC +$50/week for up to a year ($373m); $150m for strategic fuel reserves; $450m contingency for further fuel measures. A Conflict Related Operating Contingency was also set up.
• Savings:
  • Final-year Fees Free ends at the end of 2026, saving just over $1b over 4 years (about $0.3b/yr).
  • Baseline reductions: $424m reprioritised now, and $2b from future baseline cuts (about $0.6b/yr, partly not yet allocated to agencies).
  • Lower maximum Temporary Additional Support saves $196m.
  • Accommodation Supplement and income-related rents changes are fiscally neutral.
• Tax: new prudential levy on banks; FBT simplification; charities tax changes; measures to retain talent and investment. No change to income tax rates.
• Sources: https://www.treasury.govt.nz/sites/default/files/2026-05/b26-at-a-glance.pdf ; https://www.treasury.govt.nz/sites/default/files/2026-05/befu26.pdf (Tables 2.4, 2.5)

Current baseline for costing new policy (PREFU 2026, published 29 Sep 2026)

• Operating allowances: $2.4b/yr for each of Budgets 2027, 2028 and 2029. Treasury assumes the same for B30. These are net, so new spending can be offset by savings or revenue, and they are not inflation-adjusted.
  • After PREFU the full $2.4b is available at B27, because the $0.3b/yr NZTA pre-commitment recorded at BEFU was removed.
  • Treasury warns that health cost pressures alone could take 58–65% of each allowance. In B24–B26, cost pressures took about $2.25–3.0b/yr.
• Capital allowances: B27 $3.6b (includes proceeds from the Chorus securities sale), B28 $3.5b, B29 $5.0b, B30 $5.0b. Unallocated capital contingencies are a further $7.25b.
• Built-in baseline reductions: -$393m (2027/28), then -$786m/yr from 2028/29. These are savings from public sector transformation.
• Fiscal path, OBEGALx $b: 2026/27 -6.8; 2027/28 -0.8; 2028/29 +4.0; 2029/30 +8.1; 2030/31 +11.7.
• Fiscal path, net core Crown debt % of GDP: 43.7 (2026/27); 43.9 (2027/28, peak); 43.3; 41.8; 39.5 (2030/31).
• Government targets (Fiscal Strategy Report 2026):
  • OBEGALx surplus by 2028/29.
  • Net core Crown debt on a downward path towards 40% of GDP, then held at 20–40%.
  • Core Crown expenses reducing towards 30% of GDP (forecast 29.8% in 2030/31).
• Implied headroom, my reading (Treasury does not publish a single "headroom" number):
  • Policies that fit inside the $2.4b/yr allowances leave the PREFU track unchanged.
  • Every $1b/yr above the allowances cuts OBEGALx one-for-one and adds about $1b/yr to debt plus finance costs.
  • On PREFU numbers, the 2028/29 surplus target holds with about $4.0b/yr of margin in that year. In 2027/28 the margin is negative ($0.8b deficit).
  • Debt falls below 40% of GDP only in 2030/31 (39.5%).
• Fiscal costs of a policy should be measured against the PREFU 2026 forecasts.
• Sources: https://www.treasury.govt.nz/sites/default/files/2026-09/prefu26.pdf (Table 2.1; Table 2.5; Table 2.6; Note 6 p.101; Risks chapter p.58) ; https://budget.govt.nz/budget/pdfs/fiscal-strategy-report/b26-fsr.pdf (Tables 4–5)

Data notes for the CSVs

• Main source: the time series tables in PREFU 2026 (pp.132–134). These give one consistent, revised series for 2017–2031.
• 2025/26 status: fiscal figures for 2025/26 are unaudited. The audited Financial Statements of the Government for 2025/26 are due 8 Oct 2026.
• OBEGAL: reported as the total Crown OBEGAL excluding minority interests. obegalx (excludes ACC) is also included because it is the Government's target measure.
• Net core Crown debt: the current definition, which excludes advances. It is not comparable with the "net debt" ceiling used in Budgets 2022 and 2023.
• Nominal GDP 2025/26: this is the PREFU estimate ($455.9b). Stats NZ's 17 Sep 2026 release put the year ended June 2026 at about $455b.
• Real GDP growth: 2025/26 is the Stats NZ actual (1.7%). PREFU had forecast 1.6%.
• CPI and unemployment: June-quarter values.
• Average weekly earnings: the QES average weekly earnings for FTEs, including overtime, all sectors, June quarter. Older quarters come from the June 2023 and June 2024 QES releases. Forecasts are given as growth rates only.
• Median household income: median gross household income from HES, which became HILS from 2024/25. The 2025/26 figure has not been published; it is expected around Feb 2027.
• Population: for 2021/22 to 2023/24, population is the sum of Stats NZ's rounded age groups. Treasury publishes no population levels for forecast years, so only growth rates are given.
• GDP per capita: derived by me as nominal GDP divided by 30 June population.
• Spending by function: core Crown actuals for 2021/22 to 2025/26, from the PREFU core Crown expense tables. Forecast years are not included, because Treasury keeps unallocated new spending as a separate line and doesn't spread it across functions.