From students to seniors: The deeper story behind Budget 2026’s winners and losers

Friday, 29 May 2026

Finance Minister Nicola Willis unveiled a no-frills Budget focused on returning the country to surplus.

‘Winners’ included overseas retail investors, sole parents, regional medical commuters and seniors requiring photo ID.

‘Losers’ included public servants face massive job cuts, state housing tenants and tertiary students.

*Correction: This article’s original statement that there would be a 20% decrease in take-home pay has been corrected to note it’s actually a 20% increase in rent.

ANALYSIS: Looking at Nicola Willis’ Budget announcement, you’d be forgiven for thinking we aren’t in what’s shaping up to be a tight election year.

There were certainly no lollies distributed in a bid to win votes. This was a tough love Budget, focused on bringing the country back into surplus.

“Now is not the time for promises of reckless spending,” Willis said.

Any fresh spending will be funded by cuts elsewhere. There were no changes to any of the tax brackets, which means Kiwis won’t be seeing any difference to their pay cheques.

But that’s not to say the Budget was meaningless. Far from it.

Loser 1: Tertiary students and their families

Tertiary students and their families were struck by a double blow. The Government confirmed the conclusion of the free university fees policy, with some of the savings being redistributed to expand the number of places in secondary school Trades Academies, to 20,000 by 2030.

Under the fees-free policy, students could get their final year of tertiary education covered.

The cancellation of the policy means students and their families will have to rely on student loans or fork out their own money to pay for fees. And those fees aren’t set to become any cheaper, given the Government has also announced a 6% increase to tertiary fees from 2027.

The average student today carries approximately $26,000 in student loan debt.

The average amount added per year of study is roughly $12,090, which means a young graduate will start their life more than $30,000 in the red after three years at uni.

The combination of increased fees and the cancellation of the fees-free programme will likely mean the student loan burden grows over time.

It will also mean that struggling families may forego a university education in favour of learning a trade or taking on roles that don’t need higher education.

Willis didn’t shy away from this, saying that the fees-free programme did not increase enrolments or completion rates, especially for those from low-income backgrounds.

“The money from Fees Free will now be put to better use delivering frontline public services, including to better prepare young people for trades and other vocational education,' she said.

Loser 2: Public servants

The hit to the public sector was already well-telegraphed in the Government’s announcement that it would slash roughly 8700 core public sector roles by mid-2029 to find $2.4 billion in savings.

To fully bring this vision to fruition, the Government will have to be re-elected at the next election, but it will leave many workers (particularly those in Wellington) feeling vulnerable right now.

Willis didn’t mention job cuts, redundancies or layoffs in her speech, referring instead to “a fundamental overhaul of the public service”.

She noted these decisions are motivated by getting the Government books in the black “for the first time in a decade”.

Loser 3: State housing tenants

Those currently reliant on social housing will see a 20% increase in rent, as tenants will from April 2027 be expected to pay 30% of their income towards rent (up five percentage points from 25%).*

This will leave the 84,000 families in social housing worse off by more than $30 per week.

The money the Government saves from this will go to increasing the accommodation supplement for households in private rentals, which will make 110,000 families in the private rental market better off by an average of $14.91.

Winner 1: Investors with more than $50,000

This Budget delivers some meaningful changes to rules that have left investors frustrated for some time.

If you hold a hold a portfolio of overseas shares (like US tech stocks) or global index funds, the Budget outlines a major change designed to make the system simpler and fairer.

Investors investing directly in foreign shares drift into a danger zone when they pass the $50,000 cost milestone.

As you cross that figure, you move away from just being taxed on dividends and realised gains (from selling your shares) to the world of deemed returns.

Once this happens, you enter a tax minefield (you can read more about this here), which means you could be taxed on unrealised gains.

Investors have never been fond of how low this limit is and have been calling for change for some time.

Budget 2026 doubles that minimum threshold to $100,000.

If your total cost of overseas investments sits between $50,000 and $100,000, you are completely exempt from the annoying Foreign Investment Fund rules.

Instead, you'll just pay standard tax on the actual dividends you receive.

For the average retail investor, this means you can keep building your portfolio without facing the prospect of a surprise tax bill based on gains you haven’t actually realised.

The Government is setting aside $72.5 million in new spending to implement these changes and ease the compliance burden.

Winner 2: SuperGold Card holders

In one of the more unexpected Budget announcements, the Government announced that older Kiwis who do not have a driver’s licence or passport will be able to use a new updated SuperGold Card as official photo ID.

A total of $36.4m has been allocated to introduce the new card, which will resolve a major pain point for seniors who frequently face difficulties proving their identity for essential everyday needs, such as opening or accessing banking services.

The new card rollout is expected to begin in October 2028.

While this won’t necessarily lead to more money in the back pockets of older Kiwis, it will offer the convenience that they have been calling for for some time.

Winner 3: Regional commuters

For everyday Kiwis who have to travel for medical reasons or support services, the government is boosting the In Between Travel and National Travel Assistance schemes.

From July, these schemes will provide a $24m boost to temporarily absorb the massive increase in fuel-related costs faced by travellers.

This means that families who need to commute to hospitals for treatment will be able to claim 30% more in terms of mileage reimbursement rates. This initiative is really designed to take a little pressure off families and individuals when they’re already carrying the burden of having to travel long distances to get the treatment they need.

Much like the $50 payment for eligible families announced earlier this year, this boost is designed to be temporary. It will exist for 12 months only or until the retail price of 91 petrol drops below $3 per litre for four consecutive weeks.

Winner 4: Kids’ breakfast

The Government has committed to continuing to fund the KickStart breakfast programme, providing ongoing funding of $9.5m per annum, which will cover both the KickStart Breakfast programme and the Food Secure Communities programme.

A total of $1.5m per annum will go the KickStart Breakfasts programme – a collaboration between the Ministry of Social Development, Fonterra and Sanitarium, this programme provides breakfast free of charge to 42,000 school kids around the country every day.

It was initially introduced as a temporary measure, but this Budget has made it permanent.

This will come as a welcome relief to parents who would otherwise struggle to give their kids a decent meal in the morning.

Released alongside this document, we also had the latest update on the state of child poverty in New Zealand.

The report showed that children facing material hardship rose slightly from 13.5% to 14.3%.

In the document, the Government says a key driver of child poverty is living in a benefit-dependent home.

“The Government,” the document says, “is committed to supporting parents who are receiving a benefit into work, including as part of the target to reduce the number of Jobseeker Support recipients by 50,000.”

The Government said the combination of a stronger economy and early intervention will help to lift childhood outcomes over time.

Winner 5: Sole parents to get more support

This one is linked to the previous initiative.

Budget 2026 includes funding of $93m for additional case management and assistance to support sole parents into work.

Willis said this upfront cost is expected to deliver net savings of $97m as more sole parents move from receiving a benefit to having a job.

The success of this initiative will, however, be contingent on the economy.

In its November 2025 Monetary Policy Statement, the Reserve Bank said that the job-finding rate was the lowest it’s been in 30 years.

The rate tracks the share of workers moving from unemployment to employment. In other words, it tells you how difficult it is to find a job if you’re currently out of work.

This has since stabilised, with employment growth ticking back into positive territory, but there’s still a long way to go for a full recovery. And none of this is being helped by an economy clinging to the latest updates from the Middle East.

What were your thoughts on the Budget? Do you feel that you’re on the winning or losing side of the equation? And what would you have liked to see? Let us know in the comments below.

*Correction: This article’s original statement that there would be a 20% decrease in take-home pay has been corrected to note it’s actually a 20% increase in rent.