Asia-Pacific

Ardern's 'budget for the kids' pours billions into health, education

Jacinda Ardern continued to work as Prime Minister right up until the birth. Source: Getty Images AsiaPac

Jacinda Ardern's New Zealand government has bestowed multi-billion dollar spending surprises for health, education and housing in its first budget.

New Zealand's centre-left government has boosted spending on welfare and public services in a maiden budget aimed at delivering on the promises made during last year's "Jacinda-mania" election campaign.

Health services were the centrepiece of the budget's spending spree after Prime Minister Jacinda Ardern's campaign promises to help "left behind" voters eked out a narrow victory for the popular young leader's governing Labour Party.

"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.

"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."

An extra $NZ4 billion, or about 6.3 per cent, was allocated to health spending through to 2021-22, including $NZ850 million to fix run-down hospitals.

Elsewhere an extra NZ$1.6 billion will be spent on schools to hire 1,500 new teachers, along with a promise of 6,000 new public housing dwellings.

Finance Minister Grant Robertson said: "We can't make up for nine years of neglect in just one budget, but these are the first steps in doing that. We are determined to turn the page on the ideology of individualism and a hands-off approach to the economy that has left too many people behind."

Spending to reduce child poverty and domestic violence was also boosted, along with support services for refugees.

The government had already announced a $NZ5.5 billion families package and a rise of $NZ700 million, or one third, in the foreign aid budget, much of it aimed at the country's impoverished Pacific neighbours.

Ardern said her government’s first budget was focused on generational improvement in the lives of New Zealanders.

“Rebuild what?” said Ardern, defending her budget. “Well let’s start with New Zealand’s reputation, shall we? We are rebuilding a government that thinks about people.”

New outlays were partially paid for by scrapping $NZ7.9 billion in tax cuts promised by the previous government, Robertson said, a move Ardern foreshadowed during the election campaign.

He said the goal of reducing net government debt to 20 per cent of gross domestic product had been pushed back two years to 2021-22 to allow more spending.

Net government debt is currently 20.8 per cent of GDP.

The budget optimistically forecasts annual economic growth will average just below three per cent over the next five years, with unemployment approaching the government's 4 percent target by 2021.

It predicted a surplus of $NZ3.1 billion in 2017-18, rising to $NZ3.7 billion a year later.

Finance Minister Grant Robertson Delivers Budget 2018
Deputy Prime Minister Winston Peters speaks as Prime Minister Jacinda Ardern looks on during the 2018 budget presentation.
Getty Images AsiaPac

Opposition leader Simon Bridges said it was an "anti-business" budget that lacked vision.

"This is a hugely disappointing budget of little imagination from a government that is borrowing more, taxing more and spending more," he said.

"But (it) has no plans for how we as a country can earn more."

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