Tax cuts and tourist fees in new NZ govt's first budget

Finance Minister Nicola Willis on Thursday handed down the coalition government's first budget since winning office in 2023.

Its centrepiece is tax cuts, including income tax relief which will make 3.5 million Kiwis better off but deny the government $NZ3.7 billion ($A3.4 billion) of revenue in 2024/25.

To keep the cuts fiscally neutral, Ms Willis has found the same amount in savings and new revenue, allowing the government to argue they are not inflationary.

"This is a budget for every New Zealander from every walk of life who gives their best and wants a fair deal in return," Ms Willis said.

The suite of tax relief targets lower middle-income earners, with poorer families with young children the biggest beneficiaries through a childcare rebate.

Those families could be up to $NZ135 ($A125) a week better off, while an average-income household with two young children to benefit by $NZ126 ($116) each week.

Higher wage earners will be $NZ20 ($A18) a week better off, while minimum wage earners will see an extra $NZ12 ($A11) a week, and retirees living off the pension will get just an extra $NZ4.50 ($A4) a week.

Along with the income tax cuts are broad public spending cuts across the entire government.

Last year after forming office, Ms Willis ordered departments and agencies to cut spending by up to 7.5 per cent, revealing on Thursday around 240 initiatives that have been scrapped or shrunk.

Among programs facing the axe are a string of climate programs, including $NZ180 million for a plan to price agricultural emissions and $NZ178 million for energy efficiency programs for low-income Kiwis.

Helping to boost revenue is the proposed doubling of the International Visitor Levy which is currently $NZ35, but is budgeted to grow to $NZ70.

The levy, which Australians are exempt from paying, is budgeted to bring in $NZ261 million.

The government will also hike immigration fees to save $NZ530 million.

Also on the chopping block is the First Home Buyers Grant (saving $NZ245 million) and a switch from Labour's "Fees Free" policy, giving free study for tertiary students, from their first year to their final year (saving $NZ900 million).

Departments and agencies have worn billions in cuts, for the loss of around 4000 public servant roles.

Around $NZ1.2 billion has been booked by the government, with more reinvested in "frontline" health, education, police and corrections.

Some agencies including prime minister and cabinet, foreign affairs and the Defence Force have been spared deep cuts.

Ms Willis took aim at the Labour-led governments that preceded her coalition, which blew out public spending to steer New Zealand through the pandemic.

"This year's budget is the clean-up job New Zealand needs after six years of economic mismanagement," she said.

"We are getting the country's finances under control and establishing foundations for growth."

The tax cuts are almost precisely what was promised by the National party, the biggest of the three-party coalition government, during the 2023 election campaign.

Ms Willis said the free-market ACT party's plan to flatten the tax scale "had a lot of merit" but did not benefit Kiwis in the way she wanted.

"It remains, however, an idea for the future," she said.

* 1 Australian dollar = 0.92 New Zealand dollar

Australian Associated Press