NZ Budget 2021 Highlights

Date May 21, 2021
Blog category Power
By Khristine Eusebio

This year's NZ budget has finally been revealed. According to Prime Minister Ardern, this year is a significant one. The Budget 2021 mainly supports Kiwis by prioritizing important issues, including continuous protection against COVID-19, help Kiwis recover from the impacts of COVID-19, and addressing other major issues, particularly the response to climate change, affordable housing for everyone, and ending child poverty.


What exactly is the Budget all about?

The Budget is an evaluation of how much money the NZ government has after taking into consideration several factors, including debt, income from tax, etc. Based on this evaluation, the government will start planning where to designate the money. This Budget is considered as a bill that is split up into different areas and must go through a process and readings, including ruling parties negotiating with their coalition partners. Once it has passed the third reading in the House, the bill is considered done.

Why it matters:

The Budget has a huge effect on Kiwis because it's responsible for pretty much everything around you such as funding for transportation, schools, public buildings, and ways to resolve issues like climate change, child poverty, and many more. Aside from that, Kiwis play a huge part in paying for all these services and the plans included in the Budget may affect the government's decision to lower or increase taxes (income taxes, GST, etc.)

While it seems like the government is doing its job of taking care of the country's needs, keeping track of the Budget could be helpful to see whether your hard-earned money is being used for something worthy and beneficial. And if you do not agree to some of the plans included in the Budget, you can complain and express your concerns by doing a petition or lobbying the public officials.

Here's a quick guide to get you informed on Budget 2021, and what to anticipate in the coming months:

Housing support and changes:

  • $380 million to support Maori by providing them about 1000 new homes
  • Additional funding for the Warmer Kiwi Homes scheme
  • $100 million to support the Healthy Homes Standards for rental properties and Residential Tenancies Amendment Act and the implementation of its changes

The government has expressed its support, including increasing income and price caps for the First Home Loan and First Home Grant schemes. $380 million will be used to provide around 1000 new homes for Maori and repairs to about 700 homes and more. Aside from that, the budget will provide additional funding for the Warmer Kiwi Homes scheme to support at least 47,000 homeowners with low income, especially when it comes to insulation and heating.

$100 million will be used to implement some changes to the Healthy Homes Standards for rental properties and Residential Tenancies Amendment Act. According to Tuffley, it may take some time for the housing proposals to take effect, and homeowners and renters should be ready as housing costs continue to increase.

Climate change support:

  • $300 million to boost investment in low-carbon technology
  • $67.4 million for the implementation of the Carbon Neutral Government Programme
  • 19.5 million for the State Sector Decarbonisation Fund and $41.8 million to support low-emissions vehicles.

New Zealand has been trying to transition to a more sustainable and environment-friendly country by decreasing greenhouse emissions, promoting EVs, and eventually becoming carbon-neutral by 2050.

More funding was put to this transition, specifically in areas that release large emissions, such as transport, agriculture, etc. The funds are also to increase the government's commitment to New Zealand Green Investment Finance and improve the response to the harsh impacts of climate change, focusing on decarbonizing public transport, waste, and plastics.


COVID-19 response:

  • $4.6 billion from the COVID-19 Response and Recovery Fund will be used to support Kiwis and help them recover from the impacts of COVID-19.
  • $3.8 billion Housing Acceleration Fund from the COVID-19 Response and Recovery Fund
  • The $5.1 billion left from the COVID-19 Response and Recovery Fund to respond if more outbreaks occur and continue the economic rebuild.

While the NZ government has already shown an exemplary response to the pandemic, they will continue to keep Kiwis safe and ensure that essential operations, including public services, will keep going. Funding was also given to Managed Isolation and Quarantine (MIQ) to support them in ensuring that Kiwis and essential workers can come home safely while keeping everyone safe from COVID-19. Another priority this 2021 is to provide accessible and free COVID-19 vaccine to all New Zealanders to protect them from the virus.


  • The government has allocated $4.7 billion in Health, including a $200 million funding for PHARMAC
  • $485 million for Health and Disability System Reform

The health budget also aims to improve Kiwis' quality of life through health and disability services provided by District Health Boards (DHBs) despite the growing population and inflation. The Health and Disability System Reform fund is expected to help implement a new health system operation model.

Other key highlights:

Increase in benefits:

  • Increase in the weekly main benefit rates by between $32 and $55 per adult to address inequality and child poverty


  • A budget of $1.7 billion over four years on school and early childhood education and $470 million on tertiary education
  • A one-off funding package worth $52.8 million for property renovations and maintenance, specifically at state-integrated schools.


  • Extending the Training Incentive Allowance 
  • The government has started working on the Social Unemployment Insurance scheme to help Kiwis who lost their jobs by providing them around 80% of their income.

This year's budget looks promising, but while waiting for the implementation of most of these projects and plans, we can always be more mindful of where our monthly expenses go.

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