Budget 2021: Securing our recovery
The Budget is the next step in our COVID response. It’s focused on securing our recovery while tackling long term challenges like child poverty, housing and climate change.
Budget 2021
Will secure our recovery
Our targeted approach will help grow the economy and ensure New Zealand can come out of the pandemic stronger than before.
Will lift children out of poverty
By increasing main benefits, up to 33,000 children will have a better start.
Will create jobs
With 221,000 more people projected to be in work over the next four years.
Thanks to our strong response over the past year, our economy is in a better position than many other countries, but we will continue to face ongoing uncertainty as the virus spreads and evolves globally.
To weather the uncertain times ahead, we need to continue to manage the economy responsibly. The Budget is a key part of our plan to meet the challenges COVID has thrown our way, while also making sure our recovery leaves no one behind.
We’re taking a balanced approach that will create jobs and keep a lid on debt, as well as helping to turn around decades old problems like child poverty and inequality.
Take a closer look at how Budget 2021 will drive economic growth while ensuring we can come out of COVID even stronger below.
Budget 2021 will create jobs and support people into work.
Treasury forecasts show 221,000 more people will be in work over the next four years and the unemployment rate will drop to 4.2%, thanks to the policies we’ve set out in Budget 2021. This builds on the thousands of jobs we’re already supporting through our significant investments in infrastructure, programmes like Jobs for Nature, and upgrades to schools and hospitals, and our free trades training, which has seen more than 100,000 people upskill so far.
Key policies include:
- Bringing back the Training Incentive Allowance for higher level study to help people into careers
- Creating hundreds of local jobs by investing in rail workshops in Dunedin and Christchurch
- Backing small businesses to move take advantage of digital tools and improve productivity with new support and training
- Supporting 7,500 Pāsifika people into employment and training through Tupu Aotearoa
- Investing $57.3 billion in infrastructure over the next five years to drive our economy
It will lift children out of poverty while providing much-needed economic stimulus.
Budget 2021 will lift up to 33,000 children out of poverty and help to address inequality in New Zealand, through the largest increase to main benefits in a generation. This will make a real difference for families who need the most support, putting food on the table and shoes on kids’ feet, and it will also support our recovery by adding immediate stimulus to our economy.
Key policies include:
- Lifting weekly benefit rates by between $32 and $55, in line with a key Welfare Expert Advisory Group recommendation, to help reduce child poverty
- Improving childcare assistance for working families so more parents can access support
- Making homes healthier and reducing power bills for more than 47,000 families by funding insulation and heating retrofits
It will help more Kiwis into homes, with further action to tackle the housing crisis.
There is no single answer to the housing issues New Zealand faces, but the policies we’re putting in place will make a real difference. We’ve already taken action to tip the balance in favour of first home buyers and speed up the pace and scale of house building, along with building a record number of public houses. With Budget 2021, we’re taking the next steps.
Key policies include:
- Reforming the RMA to help improve housing supply
- Delivering around 1,000 extra new houses for Māori, who are more likely to face homelessness and less likely to own their own home
- Funding home repairs for whānau most in need, to ensure houses are healthy and safe
It will lay the foundations for lasting action on climate while creating jobs.
Climate change is one of the biggest challenges of our time, and we cannot afford to wait until it’s too late to do our bit. With Budget 2021, we’re laying the foundation for lasting climate action while creating new jobs and opportunities that support our recovery.
Key policies include:
- Accelerating investment in low carbon technology, renewable energy and low emissions vehicles, with a significant boost for Green Investment Finance
- Helping even more schools and hospitals make the switch to cleaner energy
- Supporting farmers and growers to reduce on-farm emissions
- Committing to recycle future Emissions Trading Scheme revenue into funding future carbon emissions
It will improve the wellbeing of Māori while driving our economic recovery.
We’re committed to working with Māori to continue tackling the big issues like inequality as together, we move forward with our recovery. Budget 2021 will support more Māori into work and training, and build on our mahi to improve health, housing and education to ensure our recovery leaves nobody behind.
Key policies include:
- Establishing the Māori Health Authority to tackle inequality in our health system
- A boost for Māori tourism to help businesses recover from COVID-19
- A major investment in Māori education, including support for Māori boarding schools and improving pay in kōhanga reo
- A Māori housing package which will deliver 1,000 new homes across Aotearoa and boost the capability of iwi and Māori housing providers
This Budget is the first of three recovery Budgets – part of our plan to drive a COVID recovery that doesn’t leave anybody behind. It lays the foundations for coming out of COVID stronger by addressing long term challenges like housing, inequality and climate change, while making sure we can continue to grow the economy, keep debt down and create jobs.
