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We can’t have prosperity – more jobs, more opportunity, and higher wages for hard working Kiwis – without security.
In an increasingly volatile world, a country’s ability to withstand international shocks depends on the size of the buffers it has in place.
For a small country like New Zealand, our security depends as much on the system of rules, relationships and institutions that have developed over decades, as it does the size of our defence force.
That’s why in this term of Government, diversification of both trade and defence relationships, particularly in the Indo-Pacific, has been an urgent priority. Upgrades to our relationships with India and Singapore, closer cooperation with NATO’s IP4, and ASEAN, and our role in the Pacific Island Forum are each critical steps against a volatile international backdrop.
Budget 2026 is about rebuilding our buffers and restoring New Zealand’s financial security. That means getting the books in order while continuing to invest in the essentials New Zealanders rely on – health, education, defence, law and order, and infrastructure.
Making that work requires ongoing reprioritisation of lower value spend, because the alternative is more borrowing or higher taxes, and ultimately a weaker economy.
The Government remains committed to returning the books to surplus by 2028/29 and putting net debt on a downward track towards 40 per cent of GDP. That discipline matters for the resilience of our economy and the opportunities available to future generations.
The Budget 2026 operating allowance will total $2.1 billion, around $300 million less than the $2.4 billion allowance set in December. That reflects a deliberate choice: focusing new spending where it matters most, while saying no to lower value programmes.
We saw the damage Labour caused – excessive spending, inflation and interest rates skyrocketing and debt blowing out. And Kiwis are paying the price with a $9 billion interest bill every year.
That’s why our approach is so important.
Something else that’ll feature in this year’s budget is our next phase of Teaching the Basics Brilliantly – focused on raising achievement in reading, writing and math.
Every parent wants their child to leave school confident in reading, writing, and maths – because those skills set them up for life.
Our record on education is strong – we’ve banned cell phones in schools, introduced structured literacy and phonics checks to boost reading success, and have introduced a clear and consistent school curriculum.
The Maths Acceleration Programme showed students made double the progress in just 12 weeks, and the number of new entrants achieving at the expected level in phonics has increased from 36% per cent to 58%.
This year’s budget builds on that approach and sets our schools up to deliver even stronger results.
Our new maths and literacy package will see schools receive more practical classroom support, including Maths Hubs, hands-on maths resources and games, writing workbooks and digital writing tools.
We’re also introducing more targeted interventions, additional maths intervention teachers, and new literacy and maths checks to help identify where students need extra support.
We’re already seeing encouraging early achievement results, and parents will have clearer information about how their child is progressing at school.
We’ll be able to share more of our budget with you soon, but be confident that National is getting it sorted – fixing the basics and building a secure future, where you and your family can get ahead
-Hon Christopher Luxon, Prime Minister of New Zealand