The actual net operating allowance in Budget 2026 is $2.1 billion. The package incorporates $3.8 billion of new spending a year on average and it includes $1.7 billion of savings and revenue.

Budget 2026 maps path to surplus but at a cost

New Zealand Country Head Peter Vial FCA provides an overview of Budget 2026.

Tax

NZ Tax and Financial Services Leader, John Cuthbertson FCA, provides an overview of the tax measures announced in Budget 2026, which include:

• Simplification of fringe benefit tax rules for private motor vehicle use
• Changes to tax rules for charities and NFPs
• Targeted simplification of the financial arrangements rules
• Further relief for foreign investment fund (FIF) interests
• Changes to the treatment of R&D expenditure
• Increased investment to assist Inland Revenue’s debt compliance activities

Health

Budget 2026 sets out a $5.5 billion increase in funding for frontline health services over four years. Other initiatives include additional funding for specialist paediatric palliative care, longer postnatal stays, further extending eligibility for the National Bowel Screening programme, more money for Pharmac and boosted support for road ambulance services.

Education

For education there is a $131 million package of measures to strengthen teaching and learning to help students meet standards in reading, writing and maths, and a $74 million package to support the refreshed curriculum and new national qualifications. As announced prior to the Budget, this year sees the end of the final-year Fees Free programme.

Fuel Response

Funding of $150 million has been tagged in the budget for additional strategic fuel reserves to firm up New Zealand’s fuel resilience for the next two years.

An additional $450 million contingency is set aside for additional temporary fuel-related measures, if required.

Roading

On infrastructure, capital investment of $1.8 billion has been set aside to build the Cambridge the Piarere Expressway, a Road of National Significance.

Rail

Budget 2026 includes $705 million capital and $477 million operating funding to renew and upgrade New Zealand’s rail network.

Defence

Budget 2026 invests a total of $2.3 billion capital and $1.2 billion operating funding for defence. This includes funding to retain existing Defence Force staff and increase numbers in key areas, investment to improve facilities at military bases across New Zealand, and funding to enable continued operation of aircraft, ships and land forces.