New Zealand’s government unveiled a “no frills” pre-election budget on Thursday, vowing to ease cost of living pressures while ramping up climate defences following deadly flash floods and a cyclone. Prime Minister Chris Hipkins promised to help New Zealanders cope with inflation, running hot at 6.7 percent in the year to March, reports BSS.
“When I became prime minister I said I would focus on the bread and butter issues Kiwi households are facing,” Hipkins said.
“Today’s budget does that by providing cost of living relief across key expenses families experience — childcare, healthcare, transport and power bills.”
Hipkins faces a general election in five months.
He took over from fellow centre-left Labour Party member Jacinda Ardern after she stepped down as leader in January, saying she no longer had “enough in the tank”.
Hipkins’ government said it would spend NZ$2.6 billion (US$1.6 billion) on cost-of-living measures in the financial year to June 30, 2024.
The money will finance more efficient heating, extra money for childcare, cheaper medication and free public transport for children. Finance Minister Grant Robertson said he had set aside NZ$6 billion dollars for a “national resilience plan” to help cope with climate disasters.
A month after flash floods killed four people in Auckland in January, Cyclone Gabrielle smashed into the country’s North Island, killing 11 people. Gabrielle swept away or heavily damaged homes, businesses, bridges and roads — leaving a repair bill the government estimates at up to NZ$14 billion. About 10,000 people were displaced.
“The North Island weather events have added a level of urgency to our infrastructure investment planning,” Robertson said.
“It was unacceptable that basic lifeline services like telecommunications, power and transport links were knocked out for so long.”
The plan will help fix weaknesses exposed when storm damage cut power supplies, damaged roads and knocked out communications in parts of New Zealand, he said.
With the country recovering from the “lingering hangover of the Covid emergency”, Robertson predicted net debt would peak at 22 percent of gross domestic product in 2024. The budget predicts a deficit of NZ$7.56 billion in the financial year ahead, only anticipating a return to surplus in 2025-26. Inflation is tipped to return to around three percent by late next year.