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2d ago

New Zealand's Luxon Government Unveils 'Growth Budget' Focused on Fiscal Restraint

Finance Minister Nicola Willis delivers the coalition's second budget, emphasizing spending cuts, debt reduction, and selective investments in defense, health, and infrastructure.

New Zealand's Finance Minister Nicola Willis walks on the day she briefs media on the government's budget, at parliament buildings in Wellington, New Zealand, May 30, 2024. REUTERS/Lincoln Feast/ File Photo

Overview

  • The 2025 budget projects a NZ$14.74 billion deficit, narrowing from last year's NZ$17.3 billion, with no surplus expected until 2029.
  • Spending cuts include the cancellation of 33 pay equity claims affecting 180,000 workers, prompting protests and criticism from unions and opposition parties.
  • Key investments include NZ$1 billion for defense, NZ$600 million for cancer treatments, NZ$600 million for railway upgrades, and NZ$750 million for abuse survivors in state care.
  • Net debt has risen to 42% of GDP, driven by pandemic-era borrowing, with annual interest payments now exceeding NZ$8.9 billion.
  • Prime Minister Chris Luxon and Finance Minister Nicola Willis defend the budget as necessary for long-term fiscal sustainability, despite backlash over reduced public services.