Budget 2026: The long game

Explore our infographic for the key Budget 2026 announcements.

It came as no surprise that Budget 2026 didn’t deliver an election year lolly scramble of tax cuts, but it has delivered good news to taxpayers who don’t like parts of the existing Fringe Benefit Tax (FBT), Foreign Investment Fund (FIF) rules or Non-Resident Contractors Tax (NRCT) rules. A line is also drawn under the taxation of charities and not-for-profits, providing decisions on reforms after a number of years of speculation. The Research and Development Tax Incentive (RDTI) is also on the receiving end of some tweaks.

As Budget 2026 approaches, the Government is signalling a shift towards fiscal constraint, tighter prioritisation, and a more targeted approach to social assistance. For a country with New Zealand’s tax base, targeted support has long been a more viable foundation than universal provision. Even systems that appear universal, such as health, are ultimately rationed in practice.

New Zealand’s farmers, fishers, growers, and foresters – in short, the entire food and fibre sector – have sustained a remarkable period of growth despite challenging conditions. While growth across all components hasn't been even, the most recent Situation and Outlook for Primary Industries shows a 13 per cent uplift in export earnings to around $60 billion in the year to June 2025.

Healthcare cannot be funded one Budget at a time: the long game demands strategic investment to improve outcomes and build a more sustainable system. New Zealand’s post‑Covid healthcare system could be seen as experiencing declining performance, despite increased investment. In short, we haven’t yet consistently converted funding into better outcomes for New Zealanders. Workforce shortages, a scarcity mindset of “doing more with less”, and ever-growing demand have all contributed to this reality.

This Budget lands at a challenging moment for the New Zealand economy. Policymakers must walk a narrow line to strike the right balance between the reactive policy responses that cushion the blow of global chaos, and the proactive decisions needed to restore New Zealand’s longer-term fiscal and economic outlook. Getting that balance wrong risks entrenching existing weaknesses rather than correcting them.

Budget 2026 arrives at a point where the pressures on New Zealand are well understood. Climate change is already reshaping our economy and communities. The cost of living continues to strain households and social cohesion. Infrastructure and energy systems are under pressure. And the path to Net Zero remains challenging, particularly in a small, trade‑exposed economy.

Budget 2026 must recognise digital as core economic infrastructure that drives productivity, trade, and living standards. Every Budget season we hear the same refrain: government needs to “go digital”. Better online services, fewer forms, and faster back-office processes matter, but digital isn’t a cost-cutting tool alone. The opportunity is to unlock economic value through digitising the economy.

We have seen that repeatedly. COVID-19 disrupted global freight networks, severe weather exposed weak domestic links, and the current Middle East conflict has forced an active government response to fuel security risks flowing through the Strait of Hormuz. In a country as distant from major suppliers and customers as New Zealand, supply chain disruption translates quickly into higher costs, constrained exports, delayed investment and weaker confidence. Supply chains are economic infrastructure, and when they fail, the impacts are economy‑wide.

New Zealand’s infrastructure challenge has moved beyond ambition. The task now is to make deliberate decisions that deliver lasting impact. As Budget 2026 approaches, the challenge facing asset decision-makers is not a lack of understanding as to what needs to be done, as the scale of the infrastructure deficit is well known. What is less certain is how New Zealand is to chart a credible, affordable and resilient pathway forward. Innovation and ingenuity must be called upon to move us beyond short‑term, reactive responses and toward more durable investment decisions that will serve current and future generations.

When it comes to the tax system, Budgets (and elections) are where you expect to see “big ticket items” announced. However, while there have been some notable developments (Investment Boost in 2025 and a 39% trustee tax rate in 2023 are particular stand outs), the last Budget to deliver meaningful tax reform was in 2010.