Budget 2026: Overview from Vine

The Government has released Budget 2026.

There is no new funding earmarked for family violence or sexual violence services.

Minister of Finance Nicola Willis said in a Budget press release:

“Budget 2026 invests in essential frontline services, critical infrastructure and the reforms needed to secure a future where New Zealanders can look forward to more opportunity, higher wages, better public services and a more affordable country for the next generation.”

“Budget 2026 is a responsible Budget that boosts funding for essential services and invests in the infrastructure New Zealand needs for the future without breaking the bank.”

A full summary of initiatives can be found on the Treasury website.

See also Stuff's Budget Bot, an AI tool that can answer questions about Budget 2026.

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Public service cuts

Budget 2026 includes a public service transformation programme that will see most public agencies directed to deliver year-on-year baseline savings, to a total of 12% over four years. It aims to “right-size the public sector and improve the efficiency and productivity of government spending” and “transform the public service into a digitally-enabled, efficiently-structured system that is better positioned to deliver high quality and responsive public services” (p. 66). It will aim to reduce core public service full-time equivalents (FTE) from approximately 63,600 to 55,000 by June 2029.

The Interdepartmental Executive Board for the Elimination of Family Violence and Sexual Violence is excluded from public agency baseline savings targets, but not from FTE reductions.

The PSA, Aotearoa’s largest trade union representing workers across central government, state-owned enterprises, local councils, Health and community groups, expressed concern about the proposed cuts. In a press release, National Secretary Fleur Fitzsimons said:

“We cannot afford to lose more experienced public servants. Who is going to tackle rising poverty, fix our crumbling infrastructure, care for our ageing population, and grow the economy? You can’t do more with less forever, and the Government has long passed the point where cuts cause real harm.”

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Changes to social housing

The budget makes several changes to social housing and housing support:

• The minimum Income-related Rent contribution for social housing tenants and the client contribution for households in emergency housing and transitional housing will increase from 25% to 30% phased in over a 12-month period from 1 April 2027.
• The weekly Accommodation Supplement for low-income households in private rentals will increase between $10 and $30 per week from 1 April 2027.
• The Budget invests a further $69.2 million into the Flexible Housing Fund to deliver between 1800 and 2250 additional social homes and other housing solutions over three years starting from 2028/29.

RNZ notes the changes will mean 111,000 families not in social housing get an extra $14.91 on average per week, while 45,000 families would lose $10.82 on average a week. For those in social housing, 84,000 families would be $31.02 worse off on average a week.

The Salvation Army's director of social policy Dr Bonnie Robinson told RNZ the changes would make it harder for many families who come into Salvation Army centres for support:

"They're already struggling and finding it very difficult to afford the basics. This Budget is doing nothing to change that for them in any significant way, and for some people, things are probably going to get worse… We're going to leave more children in poverty. We've already had about 48,000 children in the last three years slip into poverty. That's very sad and disappointing because we know the life-long impact that's going to have on these kids."

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New spending to implement Dame Karen Poutasi Review recommendations

The budget provides $82.584 million between 2025/2026 and 2029/2030 to support the delivery and implementation of recommendations made in the Dame Karen Poutasi review. The recommendations aim to improve the system of safety nets for preventing harm in the children’s system. This initiative will:

• support a sequenced rollout of mandatory training for 20,000 core children’s workers over two years to increase their capability to identify and respond to children at risk of harm
• ensure the child protection system has the capacity to respond safely and effectively to expected higher volumes of reports of concern arising from both training and the recently established multi-agency hub
• support Health New Zealand to increase participation in the Child Protection Protocol, working alongside New Zealand Police and Oranga Tamariki to assess and respond to the most serious cases of abuse.

Children’s Commissioner Dr Claire Achmad said in a press release she was pleased that Budget 2026 made a strong investment towards Dame Karen Poutasi’s recommendations, but that it did not go far enough for the nearly 170,000 New Zealand children living in material hardship, despite some initiatives for them:

“This is a missed opportunity to make a significant difference to our country’s child poverty rates. The reality of day-to-day struggles for children in material hardship are immense, and I’m deeply disappointed the Budget doesn’t deliver enough for them.”

New Zealand Council of Christian Social Services (NZCCSS) CEO Alicia Sudden called the funding “the ambulance at the bottom of the cliff” in a press release:

“Recent research shows that income support in a child’s early years can reduce rates of maltreatment. Increasing incomes and reducing hardship can have very real long-term impacts on the wellbeing and broader productivity of New Zealand… NZCCSS is calling on political leaders to show justice and compassion by taking urgent action to lift children out of poverty.”

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Proposal for Reducing the Risk of Online Harm to Children

This initiative within Vote Internal Affairs allocates $30.75 million over four years to develop policy and possible regulatory options to improve children’s online safety, subject to future policy and funding decisions.

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Closure of Project Whetū

The budget has clawed back funding earmarked for Project Whetū, which aimed to invest in technology and new ways of working to establish a consistent national approach to the management of family violence. It returns $5.196 million because the replacement of the New Zealand Police Family Safety System with a new technology platform is not ready to progress.

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Forensic mental health services

An undisclosed amount has been earmarked as contingency to address critical demand pressures on forensic mental health services. Figures have been withheld due to commercial sensitivities.

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Justice

Te Au Reka

The budget has allocated $34.112 million for Te Au Reka, the digital case management system for the courts, with the pilot due to commence in the Family Court later this year. Time-limited funding of $12.154 million will also be available in 2026/27 for demand-driven cost pressures for court and coroner services.

Legal Aid

The Ministry has received $30.280m in 2026/27 to meet demand-driven cost pressures. This initiative will help alleviate pressure on legal aid services that are critical to the effective operation of the courts. It will ensure eligible court participants continue to receive legal advice and representation.

Offender Levy

The offender levy is payable at sentencing by any offender who is convicted. It is used to fund services for victims of serious crime and ensures that offenders pay to help address the harm that their crimes cause. This initiative increases the offender levy from $50 to $100.

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Firearms reform

Budget 2026 provides a total of $44.903m over four years to deliver a reformed firearms system to improve public safety and trust and provide efficient, effective, and responsive regulatory services. It enables the establishment of Firearms Safety and Education New Zealand as a new independent entity, and enables the modernisation of firearms licensing, case management, and registration to improve public safety and enhance efficiency.

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Three-day hospital stay for postpartum mothers

The budget sets aside $34.4 million over the next four years to implement the Pae Ora (Healthy Futures) (3 Day Postnatal Stay) Amendment Bill. This initiative provides funding that will create a legal entitlement for all women to access a minimum three-day postnatal stay in an inpatient care facility after birth.