The government is reducing its operating allowance – the new money it has available to spend at the Budget in May – from $2.4 billion to $1.3b.
Finance Minister Nicola Willis announced the significant reduction at her first pre-Budget speech, adding that only a small number of government departments will receive additional funding this year.
Willis said based on the forecasts she had seen the books will still be back in surplus by 2029.
In her speech to the Hutt Valley Chamber of Commerce she confirmed there would be “no lolly scramble in Budget 2025”.
Instead, further public service savings to the tune of billions have been found to redeploy.
New spending will be limited to health, education, law and order, defence, and some small spending in social investment, business growth, and targeted cost of living relief.
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