New Zealand budget plan offers modest financial relief ahead of election

Wellington, May 18 (BNA): Months before the election, the New Zealand government on Thursday delivered some modest financial relief to many people by making most prescription drugs free and increasing subsidies for childcare and public transport.

But the government’s annual budget plan has been notable for its lack of major new initiatives.

Since taking office earlier this year, Prime Minister Chris Hipkins has promised a back-to-basics approach and shelved many of the ambitious and controversial plans of his predecessor, Jacinda Ardern, the Associated Press reports.

Finance Minister Grant Robertson said the budget is about doing the basics well.

“It’s practical and practical and it’s the right budget for these times,” Robertson said. “Were there other things I wanted to do? Were there other things the ministers wanted to do? One hundred percent there were. But this is not the time for all of these things.”

Polls show Hipkins and his Liberal government in a tight contest for the October election against the Conservative opposition led by Christopher Luxon.

The new Treasury forecast released on Thursday no longer expects New Zealand to enter recession as the economy slows this year. However, forecasts still predict a sharp rise in unemployment and weak economic growth.

The government’s budget plan comes after the nation suffered an economic setback earlier this year when severe weather, including flash floods in Auckland and a hurricane, caused billions of dollars in damage to infrastructure and homes.

The budget plan removes a small amount of money on most prescription drugs, expands subsidized preschool childcare to 2-year-olds, and makes bus and train trips free for all children under 13.

The plan also significantly boosts spending on infrastructure such as new schools and hospitals, and allocates billions of dollars to build more power connections and weather-resistant roads to replace those damaged by the hurricane and floods.

The plan needs to be approved by lawmakers, but this is considered a formality with Hipkins and his supporters holding a large majority in parliament. The budget goes into effect when the fiscal year begins in July, but not all initiatives will begin immediately.

FKN