At the heart of Budget 2023 is a cost of living package, designed to ease the pressure on New Zealanders in the face of global inflation and the challenges of rebuilding from extreme weather events.
It provides practical cost of living relief across some of the core expenses facing Kiwis – childcare, healthcare, transport and power bills. It will help to make things a bit easier for families, students and older New Zealanders by reducing or removing some of the costs they currently face. Millions of Kiwis will pay a little less as a result.
Here are the details:
We’re significantly reducing the cost of early childhood education for parents by extending 20 hours ECE to two-year-olds. This will be a major saving for families and will reduce barriers for working parents to take on more hours if they can. Based on average costs in 2023, families who were not previously receiving childcare subsidies would save an estimated $133.20 a week in childcare costs if a two-year-old child attended ECE for at least 20 hours a week.
We’re helping with health costs by removing the $5 co-payment for prescription medicines from July this year. It’s estimated three million people will no longer have to worry about the cost of collecting their medication. Removing the $5 charge will make it easier and cheaper for Kiwis to access the medicines they need, having a meaningful impact for many households, particularly those who have multiple prescriptions to fill on a regular basis.
We’re permanently cutting the costs of public transport for young New Zealanders. We’re providing free fares on buses, trains and ferries for children aged 5 to 12 and half price discounts for all passengers aged 13 to 24 from July this year. More than 1.6 million Kiwis in total will now benefit from free or half priced public transport; with 774,000 additional children and young people now eligible for the Community Connect discount scheme. Free fares for kids under 13 could see savings of $30 a week for families with two children.
We’re reducing power bills by making Kiwi homes more energy efficient. In addition to the Winter Energy Payment, we’re helping to reduce power bills by hundreds of dollars a year through the Warmer Kiwi Homes programme. We are nearly doubling the existing retrofit programme that has reduced electricity use by 16% on average over the winter months.
This cost of living package will make a real difference to millions of New Zealanders now and deliver lasting benefits into the future. It builds on the steps we’ve already taken to lift incomes and make everyday life more affordable, including:
- Lifting incomes for 1.4 million Kiwis with our 1 April changes
- Rolling out over a million free and healthy school lunches a week
- Providing over a million people with cost of living relief on their power bills
- Fuel tax cuts and half price public transport fares
- Cheaper GP visits for more than half a million people
- Extending free doctors’ visits for kids to include 13-year-olds
We’re focused on the bread and butter issues that matter most, helping with the cost of living and bringing down inflation. Budget 2023 is the next step in our plan and will help to make things a little easier for New Zealanders by reducing or removing some of the costs they currently face.
You can learn more about Budget 2023 and our plan to build for the future, here.