Budget 2026 winners and losers: Winston comes out on top, banks lose

Thursday, 28 May 2026

ANALYSIS: The coalition's election year Budget had been promoted as a 'tough love' plan, delivering 'the basics', while demanding belt-tightening across the state sector.

And while cost savings are scattered across almost every section of the public service, some areas are protected. Those safe zones are, in many cases, the domain of NZ First leader Winston Peters. Peters and the issues he cares about are the undeniable winner of Budget 2026.

Not only has Peters scored funding for the railways, foreign affairs, and superannuitants, but one of his main political targets - the Australian-owned banks - are the big losers. (Although they didn't lose as much as they could, thanks, it seems, to ACT.)

As with every Budget, some people, some communities, some ministers and some companies must pay more so others can claim a win.

In this Budget, banks will be taxed more. Stricter regulation of charities could also deliver more Government revenue. Public services focused on culture, women, Pacific people, and the functioning of government, will face cuts. University students must pay more out of their own pocket.

In exchange, more money is on the way for primary school students, secondary students looking to learn a trade, and of course, health always needs more money. Access to bowel cancer screening will expand, more money is on the way to keep up with demand on the health sector, and the Government is starting work to build a new hospital in South Auckland.

These are the winners, and these are the losers:

Overall winner: Winston Peters

The Minister for Rail has delivered significant funding for railways.

The Minister of Foreign Affairs has protected his ministry from cost cutting and secured new funding for diplomats to respond to regional emergencies, host the Pacific Islands Forum, and provide aid in the Indo-Pacific region.

And Peters, who has always marketed himself as a champion for New Zealand's superannuitants, can say he has delivered for those important voters.

During their Budget speeches, ACT leader David Seymour and Finance Minister Nicola Willis made a strong case for cutting the huge and growing cost of pensions. Superannuation is set to cost almost $25 billion this year, growing to $31 billion in 2030. There ratio of taxpayer to pension-taker is worsening.

And yet this coalition, thanks to NZ First, won't touch superannuation.

With those wins secured, Peters is the overall winner of Budget 2026. Here's why:

Foreign Affairs funding

When Willis revealed, during a pre-Budget speech, that she would demand ongoing cost cutting across almost every government department, she admitted Peters' Ministry of Foreign Affairs and Trade (MFAT) would initially not need to deliver the first year saving of 2%. But she said it would be required to deliver 5% next year, and 5% the year after.

The Treasury is not counting on any savings from MFAT.

In the 'Foreign Affairs' section of the Budget, it lists only 'new spending'. There is no 'savings'.

New spending totals $275 million across the next four years.

Railways funding

KiwiRail will receive half a billion in new capital funding, to invest in upgrades and maintenance for the Wellington and Auckland metro services as well a the 'National Rail Freight Network' plan.

Willis said this was available funding, but the plan had not been fully signed off yet.

New Super Gold feature

This is a modest amount of money, but will help older New Zealanders who no longer have a driver's license.

The Government will provide $36 million over four years, plus a $6 million capital investment, to introduce a version of the Super Gold Card that can be used as an official form of identification.

Other winners

1. Councils with growing populations

As expected, thanks to a promise from the ACT Party coalition agreement, the Government will incentivize councils to make it easer for more houses to be built. There had been suggestions it would share GST from local government fees with local government. Cabinet decided to instead provide a payment, which will cost $100 million per year.

The policy said, 'Councils will receive payments based on a proportion of the national average new dwelling consent value.'

Here's a few unexpected winners to emerge in Budget 2026:

1. Young musicians

A small one-off fund of $5.6 million will buy musical instruments for primary schools. The kits will be worth about $2000 each.

The Government will also provide a small amount of funding to keep Rock Quest, the music competition for high school students, going. It will receive $50,000 each year.

Other areas of the arts, however, must make cuts. The Royal NZ Ballet, New Zealand Film Commission, New Zealand Music Commission, and New Zealand Symphony Orchestra are required to return year-on-year savings over the next four years.

2. Waikato drivers

The only Road of National Significance to get a shout out in the Budget was the section of the Waikato Expressway. For a capital investment of $1.7 billion, NZTA would deliver an extension to the expressway from Cambridge to Piarere Road. This 16km section of road would get four lanes.

Willis said this road was signed off and funded as it was 'ready to go', with the land acquired and planning done.

3. Māori broadcasting

Te Māngai Pāho, which funds Māori broadcasting, will receive an extra $48 million across the next four years. Willis said this was to fill a 'fiscal cliff left by the last Government'.

It has been a very difficult year for Māori media, with massive cuts hitting Whakaata Māori, the TVNZ news bulletin Te Karere, and every iwi radio station.

Other areas of Māori culture and broadcasting will be required to make some cuts. New Zealand on Air, Radio New Zealand and national kapa haka organisation Te Matatini will need to make year-on-year savings over the next four years. Willis said the Government was sure, 'Te Matatini will go on'.

Losers

1. Banks

A new bank tax will collect $70 million per year.

The Government will force banks to pay a levy to fund the Reserve Bank’s regulatory functions. The Reserve Bank monitors the banking industry, supervising deposit takers, insurers and financial market infrastructures. That work will now be entirely funded by a levy on banks, rather than being paid for directly by general taxpayers.

Willis said she did look to go further with the bank tax, but could not get coalition agreement to do so. Asked about the bank tax, ACT leader David Seymour said taxes needed to be 'based on principle'.

2. Children in poverty

The Child Poverty Report, also issued with Budget 2026, showed the Government was not on target to meet its child poverty reduction targets.

Material hardship has increased. The report forecasts that the proportion of children living in 'very low income' households will not significantly decrease over the next four years. On the third measure, which looks at how many households have much lower incomes than middle-income households, the 2027 target could be met but there's no chance of making the 2028 target.

For those children in the most severe levels of poverty, with parents out of work who live in state homes, it is tough. The Government's temporary fuel crisis support only gave money to parents in work.

Willis said the Government was investing in programmes to alleviate the impacts of poverty, by extending funding to food banks and funding community providers to build public houses. She said the Government was investing into many different policies to directly help children living in poverty, with an overall goal of growing the economy so that there will be more jobs for their parents.

She pointed to investment in child safety measures, more money for Oranga Tamariki, and the continuation of free school lunches, as proof the Government was focused on these children.

3. People needing state houses

The Budget lays out how the Government's move to build fewer state houses has cut its maintenance bill. Kāinga Ora is expected to spend $368 million less over four years on maintenance and lower depreciation.

As previously announced, the Budget is also raising rents for state housing tenants, from 25% of household income to 30%.

4. Anyone expecting anything

This was a steady-as-she-goes, keep the lights on, no frills Budget. Anyone excepting an election year surprise or big cost of living relief package will be disappointed.