'No frills' NZ Budget to suit tough economic times

·3-min read

Finance Minister Grant Robertson is set to hand down his sixth - and possibly last - budget, a document reshaped by Jacinda Ardern's departure and Cyclone Gabrielle's toll on New Zealand.

Mr Robertson unveiled the budget's title outside parliament on Wednesday, the uninspiring "Support for today, Building for tomorrow".

Ms Ardern's successor Chris Hipkins has also pledged it will be a "no frills" budget, in keeping with his oft-promised "bread and butter" prime ministership.

Falling tax receipts and a stuttering economy suggest Mr Robertson will reveal a budget deficit on Thursday, which will be New Zealand's fourth year in the red owing to the COVID-19 pandemic.

Given the budget falls in an election year, surely there will be enough for Labour to campaign on ahead of the October 14 poll.

Mr Hipkins has ruled out "major" tax changes or tax cuts, insisting the gloomy economic times aren't right for income tax relief.

The hot tip is welfare reform that could provide family income support.

The government has completed a review into its "Working for Families" tax credit system, but is yet to release it, fuelling speculation it will form the centrepiece of the budget.

"This has been a very difficult budget to put together for two reasons," Mr Robertson said.

"One, the economic circumstances that we are in as a country and that people are facing, and secondly the cyclone.

"The arrival of the cyclone in the latter part of putting the budget together was a real challenge so we've had to make some adjustments for that."

The government has set four budget priorities: the cost of living, strong public services, COVID-19 recovery and resilience and being fiscally sustainable.

Under Mr Hipkins' back-to-basics leadership, Mr Robertson was ordered to lead a search for savings that could be reprioritised in the budget.

Mr Robertson found $NZ4 billion ($A3.7 billion), axing Ardern-era climate projects and a public media merger, while pushing out Auckland's expensive light rail projects.

Of that $NZ4 billion, $NZ2.3 billion ($A2.1 billion) has already been announced, with the balance to be revealed on Thursday.

The government has also announced more than $NZ2 billion ($A1.9 billion) in budget spending already, including more than $NZ1 billion ($A940 million) on cyclone recovery.

Treasury estimates Cyclone Gabrielle, which caused widespread destruction to infrastructure and property in February, is expected to have cost New Zealand between $NZ9-14.5 billion ($A8.4-$A13.6 billion).

Between half and two-thirds of that cost is expected to fall to government.

Cyclone spending announced last week includes major highway and rail rebuilds, flood protection work, support to farmers, school rebuilds, and support to Maori and community health.

Other pre-budget announcements have included pay rises for NZ's under-pressure defence force, $NZ300 million ($A281 million) to both a green investment fund and to new school buildings, and a $NZ73 million ($A68 million) family violence protection package.

Labour is also under pressure to reveal in the budget how it plans to make-up the shortfall in emissions reductions from the axed climate plans.

Under Ms Ardern, the government legislated the Zero Carbon Act which requires it to make plans to meet its carbon obligations.