Budget 2026: Fiscal restraint or a Government out of ideas?

Friday, 29 May 2026

Janet Wilson is a regular opinion contributor and a freelance journalist who has also worked in communications, including with the National Party.

OPINION: In an election year, is a finance minister – self-described as the “steward of the country’s finances” – being politically savvy by not offering some relief to an electorate which has suffered through several crises in the past six years?

Or is Budget 2026, as Nicola Willis says, one that “invests in the future, not just for the election”?

There were crumbs for everyone this year, especially if you’re an NZ First or ACT voter, from a new, improved SuperGold card, to a lowering of the bowel-screening age, to even a levy on banks.

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Yeah, right. The Big Four won’t pass those costs on to their customers, just as early childhood centres won’t reduce their fees by 1.5% for their customers after getting an early increase in subsidies.

Since delivering her first Budget, Willis has always prided herself on charting a prudent fiscal course, but it’s one that has come at a cost, especially when it comes to debt.

One of this year’s Budget “goals” was the intent to reduce spending to 30% of GDP. It’s a pity that’s not the case when it comes to its spending or “reprioritisations”, because the Government’s inclination to rob from Peter to pay Paul continues unabated.

That noise you’re hearing right now is the can being kicked down the road. Again.

According to Treasury’s Budget Economic and Fiscal Update (BEFU), net core Crown debt as a percentage of GDP will increase from 42.4% this year to 46.1% in 2028, before falling back to 44.4% in 2030, still well above the Government’s target of 40%.

Yes, Willis has managed to bring the country back to surplus in 2028/29 – one year earlier than Treasury’s December forecast – but Budget 2026, like Budgets 2024 and 2025 before it, continues the same theme.

Those good times we were promised in 2024 and 2025, and now in 2026? They’re still a-coming, baby, just over that hill.

Sure, geopolitics changes hourly according to the primitive intuition of Trump’s id, but it’s still another three years until the structural deficit can even begin to be addressed.

Which makes Willis’ and Treasury’s claim that the global fuel crisis has “delayed but not derailed” the recovery somewhat Pollyanna-ish, given that peace is yet to break out in the Middle East.

You can’t fault this Government for not being huge risk-takers in an election year, though.

It’s making a gamble that the electorate – or at least the parts that it has focus-grouped – will be patient for yet another year, in the middle of a fuel crisis, when many can’t afford to drive to work, let alone eat regularly.

Has it forgotten that in just over 23 weeks, those voters can let the Government know what they think of Budget 2026 and its “stewardship”?

Because when Willis says, “I know Kiwis are doing it tough”, what that really means is that this Government can’t help because the money isn’t there.

And while Thursday might have been the finance minister’s day to shine, it is Winston Peters who continues to cast the longest shadow over Budget 2026.

It meant that Willis could raise in the Budget lock-up the issue of impending superannuation “Boomergeddon” weighing on operating expenditure costs. Two years ago, the country’s aged population cost $20 billion; by 2030 it will be $30 billion.

But talking about it and coming up with clear policies that solve the problem are two entirely different matters when Peters is a member of your coalition and is resolutely opposed to change when it comes to superannuation.

Peters may like to portray NZ First as fiscal moderates, but it is more closely styled after Muldoon’s economic nationalism.

If voter intentions continue as they have and the coalition is returned, Winston’s rising popularity – hovering between 11% and 14% in the last three polls – will mean economic policy resembles an entirely different fiscal critter from Willis’s and National’s schtick of “let’s slash costs and pray that economic growth catches up soon”.

Ultimately, Budget 2026’s predictions could prove to be among the most transitory in a generation because the timing of the election means that the Pre-election Fiscal Update will be released in just over four months, which will inevitably change forecasts again if the fuel crisis drags on.

There’s another risk here for this Government as it continues to wait for that much-vaunted economic growth that never seems to arrive: that in trying to plot the middle course, it ends up appealing to no one.

That instead of being seen as exercising fiscal restraint, it is viewed as having run out of ideas.

That, as the election begins in earnest, it doesn’t have the answers it claims it does.