Ardern govt lays out 'rebuild' NZ budget

Boris Jancic
New Zealand's government has set up some high spending in the core areas of health and education

New Zealand's Labour government has delivered a run of fiscal surpluses on top of multi-billion dollar spending surprises for health, education and housing, in its first budget under Jacinda Ardern.

"I want my child to look back on the history books and judge me and this government favourably," the country's pregnant prime minister told parliament on Thursday.

"If we're not here for kids or the future of the country they live in, why are we here? If our budget isn't about people, what is it for? On both accounts this government is happy to be judged."

After plenty of goodies in December's half-year mini-budget and announcements in past months, the coalition Labor-led government had been playing down the odds of another splurge.

But it pointed to the need to "rebuild" after what it described as nine years of funding of schools and hospitals under the previous centre-right National government.

Thursday's budget - the first from a Labour-led government in a decade - led with a $NZ3.2 billion boost to health operating funding over four years and $NZ1.6 billion for schools.

Housing was also a big winner, with $NZ1 billion to build 6400 state houses over four years amongst other initiatives.

Of $NZ10 billion of new capital investment promised over four years - to a total $NZ42 billion - $NZ3.8 billion has now been allocated.

Finance Minister Grant Robertson said this was a "start".

"There needs to be long-term sustained investment in infrastructure," he said.

"We can't make up for nine years of neglect in one budget."

On the fiscal front, New Zealand is still looking at budget surpluses out to 2022.

The 2017/18 surplus is tipped to come in at $NZ3.1 billion - $NZ600 million more than expected, thanks to a healthier tax take.

And the surplus for 2018/19 is pegged at an even better $NZ3.7 billion, followed by more surpluses, rising to $NZ7.3 billion by 2021/22.

Net crown debt is forecast to drop to 19.1 billion by 2022, below the 20 per cent target promised to voters.

In a fiery reply, opposition leader Simon Bridges took credit for leaving the books in an "enviable" position.

Meanwhile, Treasury's forecasts for gross domestic product growth has steadied to 3.3 per cent for 2018/19.

Growth is expected to average three per cent in further years while unemployment is expected to flatten out at 4.1 per cent.

But despite the government's focus on health, its plan to make GP visits cheaper across the board has now turned into a more targeted policy.

Heading into the last election, Labour promised 1800 more police officers by 2020. But now the bulk of the funding won't kick in until after then.

Recently, ministers have warned deals with its allies in government - NZ First and the Greens - combined with a promise of no new taxes or borrowings - had meant some tough decisions.