Finance minister Nicola Willis says she’s delivered ‘a responsible budget to secure New Zealand’s future’. But what do the experts think?

Read Lyric Waiwiri-Smith’s report from the budget lockup here and Joel MacManus’s analysis here.

Belinda Himiona: Bricks and mortar put ahead of struggling families

In a time of scarcity, frustratingly, this year’s budget places a premium on infrastructure, defence and law and order, but not on easing the enormous cost pressures facing whānau and the community services that support them.

We welcome measures in the budget around child safety, and it was good to see more funding for responding to an increase in reports of concern made to Oranga Tamariki, and an increase for support for children in care with high and complex needs.

In the bigger picture though, fuel prices and cost-of-living pressures are hurting whānau and the community services that support them, and more children are living in material hardship than two years ago. Community-based social providers are being stretched to almost breaking point as they continue to assist whānau in need. While some sectors have been given relief from rising fuel costs, nothing is outlined for the community sector.

It is disheartening to see such large investment in bricks and mortar projects when so many whānau need relief now and access to critical social services. A budget is about choices and trade-offs, but there is no balance in this budget and no relief in sight for struggling families.

Belinda Himiona is chief executive at Te Pai Ora SSPA (Social Service Providers Aotearoa)

Terry Baucher: A typical National budget with a guest appearance by Ruth Richardson

This was a typical National budget with plenty of talk about fiscal responsibility enabling increased spending in key areas such as health, education and law and order. 

From a tax perspective, there was also the usual sleight of hand of paying for these increases with “reprioritisations” and disguised tax increases such as the new prudential levy on the financial services sector. At $209 million raised over the four years to 2029-30, it’s the biggest single fund-raising initiative in the budget. The levy will be paid to the Reserve Bank supposedly to recover costs of administering the sector, but the expectation is that the revenue will flow through to the government “through an increased dividend”.  

A long-standing tax tactic by governments of both hues is to use “fiscal drag” to help balance the books without attracting too much attention. This is where growth in salaries means average tax rates for individuals increase as they cross tax thresholds that have not been increased since 2024. It falls particularly heavily on middle-income earners when their annual earnings exceed $53,500 and the tax rate jumps from 17.5% to 30%. The budget predicts that total tax revenue will rise by $38bn over the period to June 30, 2030. $2.9 billion or 7.6% of this represents fiscal drag: a tidy sum that will only increase over time without adjustments to tax thresholds. We got no indication of when that might happen.

There were changes to the research and development tax incentive which overall means the government will gain $87.3m over the forecast period. The changes expand the range of R&D expenditure mining businesses can claim, which sounds like someone might owe Shane Jones a monster crayfish. 

It wasn’t all bad though. The $100,000 cap on donations and other changes to not-for-profits are welcome. The proposal to impose a tax charge on shareholders owing money to a company that goes into liquidation is sensible. (That measure is actually now in force as it was part of proposals announced last December and retracted after Act and New Zealand First objected).

To be fair, this sort of giving with one hand and taking with the other is very much a feature of most budgets. This time it has enabled Nicola Willis to claim a surplus will be achieved. Whether the flinty Ruth Richardson – who was present in the spirit of the Taxpayers’ Union – will approve, I’m not so sure. As for the electorate, we shall see.

Terry Baucher is a tax specialist

Nicola Gaston: Research and renewable energy rejected

Well, haven’t we made a dog’s breakfast of the once-in-a-generation opportunity afforded by our science sector reforms?

I’ve been thinking quite a bit about accountability lately. Partly because there seems to be an assumption that scientists or academics are not sufficiently accountable, and that this justifies the costly reform processes that are under way. But on the other hand, any scientist, any researcher, any academic is held accountable repeatedly and frequently through mechanisms of peer review. Through the need for reproducibility, and to demonstrate impact through citation or research use.

It occurs to me that our politicians need to take the same lens to assess their effectiveness in funding research. Or in making sector-wide decisions.

When this government rejected the emphatic advice from the Science System Advisory Group that increased funding was necessary to achieve the objectives of reform, it rejected those objectives. It should have drawn a line under the whole project then. The ongoing attrition in the sector – the cancellation of funding rounds, and what looks a whole lot like the death of the Marsden Fund in the recent announcement of “transition funding” – well, yes. That’s what you get when you blunder about like a bull in a china shop in the name of “efficiency”.

Oh yes – and Crown funding is being discontinued for Ara Ake. It was set up in 2020 in New Plymouth for the sake of a “just transition”, and to move our energy sector towards a sustainable future. I guess it is no surprise (cough, LNG, cough) that this is not where this government’s heart is.

But in the context of the prices we are all paying at the pump at the moment, it is hard to see this government’s rejection of anything related to renewable energy as anything other than ideological.

Nicola Gaston is a professor in the department of physics at the University of Auckland and co-director of the MacDiarmid Institute for Advanced Materials and Nanotechnology. (Nicola Gaston receives funding from the Tertiary Education Commission as the director of the MacDiarmid Institute. She also receives funding from the Marsden Fund. All research funding goes to the University of Auckland to pay the costs of the research she is employed to do.)

Holly Bennett: A simple tax change to target unscrupulous business owners

The centre-right is doing what it always should have been doing: being clear with unscrupulous business owners that if they do not take their financial duties seriously, Inland Revenue will do it for them.

In the unsexy portfolio of revenue, Simon Watts has announced that Budget 2026 will introduce tax on company loans to shareholders that remain outstanding six months after a company is removed from the companies register.

Once a company becomes defunct, any shareholder loan still outstanding six months later will attract tax. In other words the government is targeting any shareholder who uses their business to withdraw money tax-free by taking “loans” that were never truly intended to be repaid.

Simple, niche and an important policy direction. I couldn’t agree more with the minister’s comments: “Not taxing it is unfair to all the other New Zealanders who pay income tax and contribute to the costs of public services.”

Given the government expects to raise $160m over four years, it suggests that this is a reasonably common pattern.

Holly Bennett (Te Arawa, Ngāti Whakaue, Ngāti Pikiao) is the managing director of lobbying firm Awhi and a former adviser to National ministers

Rod McNaughton: More like a collection of components than a coherent pathway

On first reading, Budget 2026 signals fiscal discipline and a focus on infrastructure, energy security, frontline services and vocational education. Those are important economic foundations. But it does not strongly signal that the government sees SMEs, startups, research commercialisation or entrepreneurial scale-up as central to New Zealand’s productivity challenge.

New Zealand’s long-run problem is not just public infrastructure or fiscal pressure. It is also weak productivity, uneven firm capability, too few firms growing through innovation at scale, and an underpowered pathway from public research into commercial value.

There are useful components in the budget: funding for science-system investment, commercialisation and partnership, advanced technology, founder support, early-stage capital-market development and small-business services. But the budget still feels more like a collection of components than a coherent pathway. 

There is also more visible innovation-specific support for startups, early-stage capital and R&D-active firms than for the broad base of SMEs that are struggling with costs, capability constraints and low productivity. Startup support matters, but most New Zealand firms are not venture-backed startups. They are small and medium-sized businesses trying to survive, adopt technology, find staff, improve management capability and lift margins.

The risk is that we fund parts of the innovation system without designing it from the perspective of the firms that need to use it. The issue is not whether government has programmes, but whether those programmes form a simple, accessible and credible pathway to capability, innovation and growth.

Rod McNaughton is a professor of entrepreneurship at the University of Auckland Business School

Ah-Leen Rayner: Keeping the lights on is not a long-term solution

An additional $54 million for Pharmac over four years does little more than maintain the status quo. That’s simply not good enough when too many New Zealanders with breast cancer are still being forced to shoulder the cost of unfunded medicines themselves. 

This funding helps Pharmac manage rising global supply and cost pressures, but it does not meaningfully improve access to new medicines for patients. Keeping the lights on is not a long-term solution.

For people with breast cancer, medicines sitting on Pharmac’s waitlist – treatments already assessed as cost-effective that could provide more time and better quality of life – remain out of reach.

This budget misses a crucial opportunity to address the growing pressure facing our health system as cancer diagnoses continue to rise. New Zealand continues to underinvest in medicines compared with similar countries, and patients are living with the consequences every day.

Ah-Leen Rayner is chief executive of Breast Cancer Foundation NZ