Wellbeing Budget 2022

A Secure Future

Investments to transform our health system and address climate change are a key focus for Budget 2022

Budget 2022 builds on the progress made in Budget 2021 towards the Government's three goals for this term:

  • continuing to keep New Zealanders safe from COVID-19
  • accelerating the recovery and rebuild from the impacts of COVID-19, and
  • laying the foundations for the future, including addressing key issues such as climate change, housing affordability and child poverty.

Within these Government goals, Budget 2022 has a particular focus on delivering long-term solutions in two areas - embedding health reforms, and addressing climate change. It also includes investments to meet a number of manifesto commitments and address critical cost pressures, building on our investments from previous Budgets. Any outstanding commitments in the Speech from the Throne and the Labour Party manifesto will be prioritised in Budget 2023.

Budget 2022 features a number of innovations alongside the standard fiscal management practices of fixed nominal baselines and using allowances to constrain spending. Most prominently, we are introducing multi-year funding processes to address complex intergenerational issues that require sustained investment, including with the establishment of the Climate Emergency Response Fund (discussed further below).

In this Budget we are making the first step in a multi-year funding approach for health by providing a two-year transitional funding package, with a shift to a permanent multi-year (three years) funding approach from Budget 2024. The Government is also piloting changes to the public finance system in Budget 2022 by establishing the Natural Resources and Justice Clusters. As part of this pilot, the agencies and Ministers within each of these sectors have worked together to shape multi-year funding packages across Budgets 2022 to 2024.

The Budget allowances are net figures, reflecting the emphasis in the fiscal management approach on finding savings opportunities within existing spending. The Budget 2022 operating allowance is offset by savings including increases in revenue resulting from changes to tax policy, and reprioritisation of unspent funding in tagged contingencies and the CRRF.

The CRRF was established two years ago and has been an important tool for managing the fiscal impacts of COVID-19. As our policy response evolves and we adjust to living with COVID-19, we have decided to close the CRRF and repurpose the remaining funding. In addition to $1 billion of funding used to offset the Budget 2022 operating allowance, we have set aside $1.2 billion for urgent public health needs that cannot wait until the next Budget cycle, and $1 billion for a package of measures to support low-to-middle income New Zealanders to manage the rising cost of living.

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