Labour delivers on election promises in mini-budget and keeps books in the black, although there is limited wriggle room

Finance Minister Grant Robertson has stuck to his promise and delivered a mini-budget today that shows his government's election and coalition promises can be afforded, whilst keeping the books in the black.

Although the government will not have huge amounts of spare cash in future to deal with any cost surprises.

Treasury has confirmed the Labour-led Government's promises and coalition commitments can be met. Source: 1 NEWS

In its Half Year Fiscal Economic Update, Treasury is forecasting a budget surplus of $2.5 billion in 2018 and $2.8 billion in 2019.

Those surpluses are down slightly on what was forecast prior to the election.

Finance Minister Grant Robertson delivered his mini-budget outlining a families package to lift 88,000 children out of poverty. Source: 1 NEWS

However stronger economic growth in future years will see the surplus rise to $8.8 billon by 2021/22.

Government debt levels are also expected to rise more than was being forecast prior to the election, however they will then dip below 20 per cent of GDP by 2020, which is the self imposed target set by Grant Robertson prior to the election.

The forecast surplus and debt track today produced by Treasury fully includes the cost of policies in the 100 day plan such the $5.5 billion Families package.

At the heart of the Government's mini-budget is a families package, to replace National's $2 billion tax cuts. Source: 1 NEWS

Most of the money for that package - which is spread over five years - comes from canceling National's $8 billion tax cuts.

Meanwhile the government has allocated a further $21.7 billion of new expenditure over the next four budgets, with a $2.6 billion operating allowance for next year's budget.

$6.6 billion has at this stage been left unallocated from that $21.7 billion. Which is not a huge amount of wriggle room - should new costs pressures arise.

This money will most likely be needed for things like wage claims from police or nurses.

1 NEWS political editor forecast what the government’s mini-budget will contain today. Source: Breakfast

Spending on capital items (bridges, schools etc) will be set at around $12 billion over the next four years. $3.4 billion for 2018 and 2019.

Meanwhile Treasury has estimated that cost of polices in the coalition agreement will be $419 million, although some of the coalition promises will be funded from within money already set aside for health and education spending.

The coalition agreement will also see an extra $3.7 billion of capital spending – most of this will be the $1 billion a year regional development fund.

Helping drive the surpluses forecast today is economic growth which is expected to average around 2.9 per cent over the next four years, with unemployment to drop to 4 per cent.

Wages are also expected tick up towards 3 per cent.

The Finance Minister said meeting the Government's 100 days fiscal plan impacts was largely paid for by repealing National's tax cuts. Source: 1 NEWS