Central to New Zealand’s budget is the largest boost to welfare payments in “more than a generation”. It is also expected to fuel a COVID-19 recovery by taking on some of the country’s social problems. 

Addressing reporters before the budget was announced, New Zealand prime minister Jacinda Ardern “Previous downturns have made inequality worse. We’re taking a different approach.”

Spending will be directed towards child poverty measures, health, education and the climate crisis, Ardern said.

Finance minister, Grant Robertson noted the importance of “careful fiscal management”, amid a strengthening economy. “By lifting benefits we’re talking about having that money be spent in the communities where people live. That’s the best part of a billion dollars a year going into the economy.”

New Zealand was fairly praised by countries for how it managed the pandemic, issuing early lockdowns and unemployment stood at 4.7% in the March quarter. 

According to government documents, Ardern’s government will be spending NZ$3.3bn on increasing benefit payments and allowances for tertiary students in the coming four years. Adults are to receive benefits of between $32 and $55 a week. 

Arden’s government said that this will help lift 19,000 and 33,000 children out of poverty.

Infometrics economist, Brad Olsen said, “It’s a way to make things look a bit rosier than they might currently appear because comparing to a few years back doesn’t reflect current reality. But it’s an important move and recognises the challenges that lower-income families have faced.”