Budget 2026: Is this an election-winning Budget?

Friday, 29 May 2026

OPINION: Nicola Willis was not shy about the lack of sweeteners in her Budget.

“It would be easier for me personally to try and bribe New Zealanders with their own money. It would actually be politically expedient to pretend we can afford a lolly scramble,” Willis said yesterday when presenting her Budget - before confirming that there was no sugar available.

It is true that there are strikingly few retail offerings in the Budget.

There is no $50 a week delivered through Working For Families or a tax cut. There is no major new entitlement - such as the three free GP visits that Labour will be taking to the election. There are cuts to public servants and hikes in rentals for state house tenants, but no immediate reward for such parsimony.

Willis is instead asking voters to - in her terms - grow up and accept that they can’t always have nice things. That getting to surplus one year earlier is actually more important than getting some inflationary cost of living relief now. And that she needs the room to move in case the fuel crisis gets worse.

Which isn’t to say this is a budget of nothing but cuts.

Willis is live to the political problems of actual austerity - which is why she hasn’t delivered any.

Spending has gone up in every one of her budgets and did so yesterday too, with Health getting an average of $1.5b a year, education $503m a year. Willis will look to make that health spending feel tangible with a promise that new mothers can stay in hospital for three days. Voters care that these baseline services perform at least as well as they did the year prior, and with an ageing population and rampant inflation, just keeping the lights on requires major investment every year.

The problem with this for Willis is voters are slow to reward things staying the same, and in different parts of the country at different times the health service will always feel like it is falling apart. Labour is consistently seen as the party of social services and while National has made real inroads to changing that with respect to education it feels a while away on health.

It is also not the number one issue facing most voters. The cost of living is. And there is no direct cost of living relief here. This gives Chris Hipkins - offering three free GP visits per year - something of a stick to beat Willis with.

Of course, the Budget belongs to the coalition, not National alone. And Willis may be keen to offer something a lot more retail at the election.

Where might the money come from? Willis was very keen to emphasise how much her party would like to change superannuation settings, if it was not prevented from doing so by its agreement with NZ First. I asked her a question about something quite different during the lockup and yet she decided to answer as if I had asked her about superannuation.

Promising to trim Super in the 2030s would not give Willis any room for an election promise immediately. But it would allow Willis to at least tell younger voters that she is aware an increasing proportion of their tax goes to their parents, with little help for them. Savings found in other programs that are important to NZ First but not National might offer a more immediate promise.

But this will pale in the face of the wider offer National is looking to make at the election, which is not that the Government can deliver voters goodies, but that the Government can deliver sustained economic growth so voters don’t need them.

The problem with this strategy is it hasn’t really worked yet. Growth was negative last year and is still looking reasonably anaemic, with 1.2% growth for the year we are in, down from 1.7% predicted in December. We will not reach the guns a-blazing 3%+ growth until 2028 - and that is presuming nothing goes wrong - well after the election.

Before then Treasury expects inflation to go up to 4% and unemployment to peak at 5.5%. National can cling to the polls that show voters still see it as the most competent party when it comes to managing the economy. But if that management doesn’t result in something that feels like optimism come November, it might not matter.