Budget 2025: What the Government's already spent
Monday, 19 May 2025
Finance Minister Nicola Willis will on Thursday release a Government Budget which is set to include very little spending money.
At the end of April, Willis revealed she had cut the operating allowance for her upcoming Budget. That allowance sets how much new money the Government is allowed to spend. In Budget 2025, that’s just $1.3 billion - which is about half the expected allowance.
While $1.3b may sound like a decent chunk of change, it won’t even pay for the promises the Government has already made.
Through pre-Budget announcements and spending commitments, the Government has already committed to almost $1.9b of new funding over the next year.
That means Budget 2025 will need to outline how money has been saved from other initiatives. We already know what some of those are likely to be, with changes to the pay equity scheme expected to save “billions” for the Government.
These are the new spending promises the Government has already made:
Pre-committed health spending
The health sector will need $1.22b to keep running next year. That was signalled last year through the mid-year update, and is part of long-term funding commitments for the health sector.
With an ageing population and ever-increasing cost pressures for the health system, spending is set to continue rising in this area.
Cancer drugs
After last year’s Budget omitted to include funding for promised cancer medications, the Government made a post-Budget promise in June that the 13 treatments would be funded this year.
That will cost $151 million per year.
Support for abuse in care survivors
The Government has committed on average $194m, per year, to increase compensation payments and provide faster, more easily accessible support to survivors of abuse in state care.
Following Erica Stanford’s pre-Budget announcement in early May, survivors questioned if that would be enough to make good on the recommendations of the Royal Commission of Inquiry into Abuse in Care.
Money for movies
Finance minister Willis has pledged $577m, over four years, to boost the Screen Production Rebate.
That brings total funding for the rebate, which is mostly paid to foreign film producers working in New Zealand, to $1.09b over the next four years.
On average, that’s about $144m extra per year.
Teaching tools
In a series of pre-Budget announcements, Stanford and David Seymour have promised:
Social investments
Willis, who is also the social investment minister, said the Government would establish a $190m social investment fund. Over the next year, Vote Social Investment would be boosted by about $69m.
So how will the Government pay for those promises?
A key question for Thursday’s Budget will be how the Government balances its books.
Its pre-commitments far exceed the operating allowance Willis has committed to.
There will also be other as yet unannounced spending commitments in Budget 2025 that must be paid for.
Changes to the Equal Pay Act, to limit pay equity claims from female-dominated workforces, mean the Government is expected to save “billions” in upcoming budgets. Although ministers have not yet confirmed how many billions.
Willis and Seymour have also indicated that they expect to make further cost savings and “reprioritisations” across the public service, as they look to limit the scope and size of the public service.