The Treasury caveats some funding for individual initiatives has been withheld for commercial and/or negotiation sensitivity reasons.
That means the total of the individual initiatives may not add up to the overall amount spent/saved.
Some of the savings are called “baseline savings”.
These are general cuts within different agencies or ministries, that could come from the likes of reducing staff numbers or pulling back on discretionary spending.
In Budget 2026, most agencies – some were exempted – had to deliver baseline savings of 2% “through reducing back-office staff and contractors and consultants, and scaling of lower-value programmes”.
In the next two Budgets, there will be reductions of 5% for most agencies.
Finance Minister Nicola Willis unveiled the Budget on Thursday. Photo / Mark Mitchell
So where are the savings found?
Taking a big picture view, there are average operating savings and revenue of $1.7b in Budget 2026.
Most of that ($988m) comes from piecing together miscellaneous savings and revenue measures. Additionally, education is saving about $354m, social housing and welfare saves $214m, housing $92m, health $9m, transport $5m, and law and order $4m.
This can be broken down further into what are called “votes”, or categories that group similar spending or saving initiatives.
For example, there is a health vote that has all health-related initiatives.
Many of the votes just list the baseline savings of their relevant ministries or agencies. There isn’t necessarily specific information about where those savings are coming from, as that can depend on operational decisions.
For example, under Agriculture, Biosecurity, Fisheries and Food Safety, there are baseline savings of $13.2m per year, over four years, for a total of $52.8m.
Similarly, in the Women vote, there are baseline savings of $200,000 per year.
Other votes have more specific savings initiatives.
In Education, for example, there are savings from ending Younger Provision. According to the Ministry of Education, this programme supported primary and intermediate students at risk of disengaging from education.
But it’s being ended “due to limited evidence of impacts”.
By ending that programme, the Government saved $3.5m a year, or $14m over four years, money it said is being reprioritised “for other education priorities in Budget 2026”.
In Justice, the Government has saved money by not proceeding with a referendum on whether the term of Parliament should be four years. That has saved $25m.
Several of these savings initiatives return big chunks of cash into the kitty (mostly to be then spent on other things the Government is prioritising).
One example in Housing and Urban Development is the decision to lift the minimum amount of money social housing tenants need to pay from 25% of their income to 30%. This saves the Government just under $390m over four years.
When that announcement was made last week, the Government said it was also increasing Accommodation Supplement rates, to help with rent, board or the cost of living at home. That cost about $374.3m.
In Tertiary Education, the Government saved more than $1 billion over four years by ending the Fees Free scheme.
Some of that money has then been used to fund other education initiatives. That includes lifting the number of places available in Trade Academies by 10,000 to more than 20,000 by 2030 (at a cost of $69m over four years).
The Government is forecasting large savings from its previously announced reforms to the public service. These reforms included the potential for merging various ministries or departments and using artificial intelligence more routinely.
Over the four years forecast, there is about $1.96b in “efficiency savings through public sector transformation”. This is on top of the baseline savings most departments are currently finding.
Jamie Ensor is the NZ Herald’s Chief Political Reporter, based in the press gallery at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist in 2025 for Political Journalist of the Year at the Voyager Media Awards.