Willis Blames Fuel Crisis For Reduced Budget Savings, Seymour Takes Credit For Lower Operational Spending

Wednesday, 13 May 2026, 3:59 pm
Article: RNZ

Russell Palmer, Political Reporter

Finance Minister Nicola Willis says savings are reduced compared to previous Budgets because of the fuel crisis - and because cuts have already been made.

In a pre-Budget speech on Wednesday afternoon, Prime Minister Christopher Luxon confirmed operating allowances would be lower, while capital allowances would rise.

Willis had previously given a $2.4 billion operating allowance target, saying that was a "ceiling, not a floor".

Following Luxon's speech confirming spending would be $300m lower, at $2.1b in this year's Budget, she said the government had delivered on that.

"It's more important than ever that we ensure the New Zealand economy is financially resilient," Willis said. "As a government, we're doing what the world requires of us right now, tightening the belt."

Willis said that was partly as a result of spending to safeguard New Zealanders from the fuel crisis, including "buffers" in the Budget in case further support was needed.

"We did have to do a rejig to ensure that we included within our spending plans adequate responses ot the fuel crisis."

She also indicated savings in previous years had helped keep operating spending down.

"Without the fuel crisis, yes, we may have been able to have an even tighter allowance, but my view is that we have achieved a great deal by reducing our forecast operating allowance, ensuring that we're building up buffers for the future, keeping New Zealand financially secure."

ACT leader David Seymour was quick to take credit for the lower operational spending.

"This reduction in spending is policy that has ACT fingerprints all over it," he said. "It also creates a real choice for voters. On the one hand, you have three parties that can work together to make careful use of taxpayer money. On the other, who knows? Probably a lot of memes on Tiktok."

He said he was not claiming the savings were all his idea, but "we're the ones at the table who press for careful use of taxpayer money and less spending."

He also echoed Willis' comments about previous Budgets shoring up the government's finances for a shock like the fuel crisis.

"We've had this trade war, now we've got an actual war. New Zealanders have been in a stronger position to deal with those shocks because the government has run a tight ship with its own finances. The alternative is big spending, big inflation, big interest rates and big pain and disappointment."

He said ACT would have a "less than zero" Budget.

"Speaking as the ACT leader, yeah, I think we need to be a lot tougher on reducing the deficit and reducing government spending, but also speaking as the Deputy Prime Minister, I'm proud to be part of this government and I know that we wouldn't have made the level of savings we have."

He was not too concerned with the increased capital spending.

"It's gone up, yes, but that's going to be for things that are yet to be announced, that I think are significant and timely investment and then in later years in the cycle, it will be lower."

Seymour defended the comparatively lower level of spending.

"Let's say inflation's 3 percent and the population goes up 1 percent - that means you've got to go up 4 percent running just to stand still. What we've done is ensured that actually we're increasing it by around about one and a half percent.

Labour leader Chris Hipkins said it was the government's "last chance to show New Zealanders they have a plan for the future", but it was difficult to form a judgement about Luxon's comments given he had not yet seen the Budget.

"New Zealanders want to know that the government understands how difficult it is for them, they want to know that the government feels that pain and is going to do something to ease the pressure that they're facing," he said.

Greens co-leader Chlöe Swarbrick said the lower operating allowance was "exactly this government's game plan, right - it's austerity".

"The government has decided to hand out billions of dollars in tax cuts to landlords, and in turn, has decided to cut off our lowest paid working women from their ability to get paid fairly.

"Time and again, day after day, this government ... shows us more than tells us that they don't work for regular New Zealanders, they work for massive corporations."

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