Budget 2021: What you need to know

Budget 2021 sees the ‘the biggest lift in a generation’ to benefits, $1 billion for Māori housing, health and education, as well as an overall investment of $4.7 billion to health.

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1 NEWS' political editor broke down the big points of this year's Budget. Source: 1 NEWS

Finance Minister Grant Robertson said this year’s Budget was "still in the shadow of Covid-19 and its focus is to secure our recovery from its impact".

Here’s what you need to know.


Benefit rates are set to rise, with rates to increase by at least $32 to $55 a week from April next year. That is in addition to a $20 boost to all main benefits in July. It comes on top of the $25 benefit lift which came in during the Covid-19 response last year.

Prime Minister Jacinda Ardern and Finance Minister Grant Robertson make their way to the house during Budget Day 2021 at Parliament . Source: Getty

- Weekly benefit rates to increase between $32-$55 per adult by April 2022, estimated to cost $3.3 billion over four years (dependent on the number of people receiving benefits)
- All benefits to increase $20 in July 2021
- Main benefits to get a further boost on April 2022 to be in line with Welfare Advisory Group recommendations.
- Families with children will receive an extra $15 per adult per week
- Student support living costs increases by $25 in April 2022
- Increasing the income threshold for childcare assistance


- $4.7 billion allocated to health
- Pharmac gets an extra $200m for the purchase of more medicines, treatment and devices
- $486m for new health reforms – that includes $98.1m to establish the Māori Health Authority
- Overall - $243m operating for Māori health which includes $18m to establish iwi/Māori partnership boards, the establishment for the Māori Health Authority and for it to invest in hauora Māori services
- $2.7b extra for District Health Boards over four years
- $516.6m for the development and running of health infrastructure, which includes a national health information platform
- Almost $400m for people with long-term physical, intellectual or sensory impairments
- $100m for air and road ambulance services.
- An extra $50m for the Healthy Homes Initiative
- $3.8m for Family Planning

Among the $586 million to start the transition, is $98m to establish the new Māori Health Authority. Source: 1 NEWS

Health Minister Andrew Little said Budget 2021 increased primary care funding by $46.7m a year – “so that as our population grows, GPs can contribute to provide affordable healthcare to the people who need it most”.

Māori Housing:

- $380 million for Māori housing
- Of that, 1,000 new homes for Māori – including papakāinga housing, affordable rentals, transitional housing, and owner-occupied housing
- Repairs to 700 Māori-owned homes and support services
- $30 million for iwi and Māori groups to accelerate housing projects
- Injecting $350m from the Housing Acceleration Fund for infrastructure for Māori housing

Houses (file picture). Source:

Associate Māori Housing Minister Peeni Henare said that making sure Māori had access to warm, dry homes was important for “health, social and economic reasons”.

Economic recovery:

- Treasury’s Budget update forecasts the deficit to narrow, reaching $2.3 billion in the 2024/25 period
- Net Core Crown debt is forecast to go up by about $100b by 2024/25 – peaking at 48 per cent of GDP in 2022/23
- Unemployment is forecast to rise up to 5.2 per cent this June, before trending down to 4.2 per cent in 2025.
- Operating allowance for Budget 2021 was $3.8b per year and capital allowance for Budget 2021-24 up to $12b.

“Despite some near-term weakness, the economy is expected to strengthen throughout the forecast period, supported by the return of international visitors and higher Government spending,” Secretary to the Treasury Caralee McLiesh wrote.


The biggest areas of new spending also included new school property and catch-up funding for polytechnic courses. Source:

- Training incentive allowance scaled up
- Overall – Budget 2021 gives $1.4b over four years to operational funding for schools and early learning
- Schools and early learning get $185m, in operating and $53m in capital to establish an education service agency to support schools
- One-off funding package for maintenance and upgrades at state-integrated schools

Social insurance scheme:

- The Government revealed today it is proposing an ACC-style unemployment insurance scheme
- The proposal looks to provide about 80 per cent cover for a limited time after a person loses their job and linked to training opportunities

Windfarm at Scott Base in Antarctica:

- $306 million to replace windfarm and project operating costs of $38 million
- Expected to need 170 jobs for peak of construction and 700 overall over six years

Pre-Budget announcements:

$118.6 million for improved cervical and breast cancer screening 

$170 million pay boost over four years for early childhood teachers 

$67.4 million over four years to de-carbonise the public sector by 2025 

Priorities of Budget 2021:

Continuing the Covid-19 response

Delivering priority and time-sensitive manifesto commitments

Supporting core public services through managing critical cost pressures

Continuing to deliver on existing investments