Helping older people get the right care

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New funding will give older people greater access to aged residential care and longer care outside of hospitals, Associate Health Minister Casey Costello announced today.
“We want to ensure older New Zealanders can get the treatment and care they need in the best possible place. They should not be in hospital simply because they are frail and there are limited options for their care,” Ms Costello says.
“This investment of $24 million over four years will help people, who don’t need continued hospital treatment, to move to other care places in the community, including aged residential care.”
This timely care transfer initiative was developed with the aged care sector in 2023 but had time-limited funding that ends next month. 
“This investment means current delays in discharging older people from hospital will be reduced and hospital beds will be freed up for those requiring treatment,” Ms Costello says. “It will benefit anyone needing to access hospital and specialist services.
“The new funding will enable better rehabilitation and recovery in the community – for example, providing support for older people with exceptional needs, such as bariatric care, and the extra care required for new residents with complex needs,” Ms Costello says.
“I’ve seen first-hand how Aged Care residences can provide this level of recuperative care. They are currently funded to provide these ‘hospital’ rooms, and this extra funding will support access to this care and for the transfer process to occur safely and faster.
“We are working on large-scale and long-term improvements to the aged care system, but this initiative delivers some immediate support and helps us achieve national health targets.”

Supporting school choice

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Diversity and choice in New Zealand’s schooling system will be supported by increasing funding for independent (private) school subsidies, Associate Education Minister David Seymour says.
Budget 2025 will invest $15.7 million over four years to increase the subsidy available for independent schools. This increases the yearly funding for independent schools by 11 percent, from $41.6 million to $46.2 million.
“Independent schools are an important part of New Zealand’s education landscape, offering diversity and choice to parents. If parents want to send their children to independent schools, they should be able to,” Mr Seymour says. 
“Often parents are making big sacrifices because they would prefer to send their child to an independent school. They pay just as much tax as anyone else, yet the money that comes back for their kids’ education has effectively been getting smaller over the last 15 years. 
“In 2010 the Government said that it was appropriate to fund the independent school sector $41.6 million per year to divide between schools based on their roll size. 15 years later, that amount is still the same. In 2010, there were around 27,600 students enrolled in independent schools. This grew to over 33,000 in 2024.
“Inflation and costs for schools have increased, and independent school enrolments have grown. This means schools receive funding that is worth significantly less than they need. For example, independent schools pay more in GST than they receive in funding.  
“Alongside an increase to total funding, I am making changes so that funding for independent school subsidies will automatically be considered annually to accommodate roll growth. This will mean independent school funding increases will work the same way as any other school.
“Independent schools are a crucial part of the education system. The sector has been seeking changes to ensure they can continue to support students. This funding addresses key issues they have raised and gives independent schools support that is long overdue.” 

Investing in public safety and reforming young offenders

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Initiatives to help serious and persistent young offenders turn their lives around, and improvements to facilities for them, have been given a significant financial boost in Budget 2025. 
Building on the successes that have already led to a 13 per cent reduction in young people with serious and persistent offending behaviour (a key Government target), more than $103 million is being invested over four years in upgrading facilities and funding ways to address recidivism amongst young people.
“This investment will have a real impact on these young people and their whānau. It will also ensure our communities are safer, both immediately and in the future”, Minister for Children Karen Chhour says.
“This Government’s efforts to keep the public safe and reform young offenders is already bearing fruit. The Budget ensures we can continue this important work.”
The funded initiatives over four years include: 

$22 million for repairs and upgrades to Oranga Tamariki residences
$16 million to implement the new legislative regime for Young Serious Offenders, as proposed by the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill
$33 million in safety and quality improvements to the facilities at youth justice residences
$33 million for the operation of military style academies and transitional support for young serious offenders. 

“Sometimes all it takes to improve the lives of an entire whānau is supporting one young person to make better choices.
“We continue to want better for, and from, these young people. This is not just an investment in facilities, it is an investment in them,” Mrs Chhour says.

More staff, better prisons to keep public safe

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New investment in prison capacity and frontline staff will help reduce reoffending and keep the public safe, Corrections Minister Mark Mitchell says. 
“Our Government has restored proper consequences for crime. Because of that, there has been an increase in the prison population and fewer victims of crime.
“Budget 2025 invests more than $472 million over four years to ensure Corrections can continue to safely and securely manage the growing prison population. This includes funding for 580 new frontline staff, including 368 Corrections Officers. This is additional to the 685 new frontline staff funded through last year’s Budget.
“Corrections is ready to recruit these staff through an excellent recruitment campaign that has driven more than 110,000 applications since being launched in February 2024,” Mr Mitchell says. 
“We’re also investing in safe, fit for purpose prisons including redeveloping Christchurch Men’s Prison.
“Funding through Budget 2025 will help deliver 240 new high security beds at Christchurch Men’s Prison, along with a new Health Centre and Intervention and Support Unit containing 52 beds. 
“Phase 1 of the redevelopment will be designed, built, financed, and maintained for 25 years under a public private partnership. Corrections will retain responsibility for operations and custodial management of the facility.
“The new Intervention and Support Unit will provide dedicated specialist mental health support to prisoners who are at risk of harming themselves or others. This unit will be safer for staff and help prisoners with their mental health needs, preparing them to successfully take part in rehabilitation programmes.
“Our investment will ensure Corrections can meet other cost pressures due to the increase in prisoners and inflation.
“We’re investing in the frontline because we are serious about bringing back law and order and creating a safer New Zealand.”

Mental distress 111 calls to get a mental health response

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The Government is overhauling the way emergency services respond to 111 calls from people experiencing mental distress, Minister for Mental Health Matt Doocey says.
Budget 2025 invests $28 million over four years to fund the transition from a Police-led response to a mental health response to 111 mental distress calls.
The Budget also invests $50 million in improving the safety, privacy and dignity of mentally distressed people at mental health facilities.
“New Zealand’s current response to mental distress crisis calls is not fit-for-purpose. Transitioning from a Police-led response to a mental health response is the right thing to do,” Mr Doocey says.
The multi-agency response will involve 10 new co-response teams and a significant boost to the capacity of mental health telehealth services.
“Advocates, families, Police and mental health and addiction workers have repeatedly told me that having a uniformed Police officer turn up at times of mental health need can be disheartening and distressing.
“Police do a great job in our communities, but they are not mental health professionals. Police will always attend when there is a threat to life or safety, but this initiative will free Police up to do with core Policing.
“We know that co-response teams work. An evaluated trial saw fewer people being taken straight to a police station or emergency department. Instead, some had their issues instantly addressed, saying this was far less stressful and frightening than being transferred directly to hospital.
“The package includes increased funding for psychology internships, stage one psychiatry registrars and peer training. Money is also set aside for security for up to 12 smaller emergency departments that require security and support.”
Mr Doocey said the investment in lifting standards at care facilities was part of the Government’s response to safety recommendations by the Royal Commission of Inquiry into Abuse in Care.
“Keeping vulnerable people safe in the care of mental health services is an absolute bottom line for this Government,” he says. “We must ensure mental health facilities are safe and fit-for-purpose.
“This investment will cover in-depth assessment, safety improvements and upgrades.
It is expected to reduce the number of incidents and deaths in state care, and to improve working conditions for mental health staff who do an excellent job in often challenging situations.
“As New Zealand’s first Minister for Mental Health, I’ve heard too many stories from families whose loved ones died while in the care of mental health services. It’s heartbreaking, and we have to do better.”
The Budget will also bolster safeguards and oversight of compulsory mental health and addiction care.
“More than $9 million will go towards stronger protections for people receiving compulsory assessment and treatment and to improve complaints and investigation processes for people under compulsory care.
“These measures will improve the experience of state care for people with high and complex mental health, addiction and intellectual disability needs,” Mr Doocey says. 

Billion-dollar investment in hospitals

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Nelson and other communities will benefit from a billion-dollar upgrade and expansion of hospitals across the country, Health Minister Simeon Brown says.“Budget 2025 funds a major redevelopment of Nelson Hospital. This will deliver a new inpatient building with more beds to meet population growth. The hospital’s two main buildings will be refurbished, and essential services will be upgraded. The Budget package also provides funding for:  

Construction of a new emergency department at Wellington Regional Hospital
The National Remediation Programme and small-scale infrastructure projects
Increasing interim inpatient bed capacity across New Zealand
Critical Auckland hospital infrastructure
Palmerston North Hospital remediation

“Nelson’s new 128-bed inpatient building – 41 more beds than current capacity – is expected to be built by 2029, two years earlier than planned. The hospital’s two main buildings will be refurbished and seismically strengthened, and a new Energy Centre will house critical infrastructure.“The $73 million design and enabling works for the new hospital are already well underway, and the $11 million emergency department expansion is expected to be completed by early 2026,” Mr Brown says. “Wellington Regional Hospital’s emergency department has long been inadequate to meet demand. The infrastructure boost will support construction of a new emergency department and specialist treatment spaces, refurbishment of the Old Children’s Hospital, expansion of the Intensive Care Unit, and fit-out of refurbished floors in the Clinical Services Block.“Providing more hospital beds quickly is also a priority. New funding will deliver at least three modular, transportable 32-bed inpatient units that can be moved where needed to support ongoing care while major infrastructure projects are underway. “Budget 2025 also funds small-scale support for urgent infrastructure issues at hospitals nationwide.“Fixing critical systems such as electrical, heating and hot water at Auckland City Hospital and Greenlane Critical Centre is a key priority. Patients care is being delayed due to outdated infrastructure which is failing. “Patients and staff in Palmerston North will also benefit from major electrical, heating, and fire protection improvements.”Mr Brown says the Government is determined to reverse decades of under-investment in the health system.“We are making the long-overdue investments needed to modernise our hospitals and strengthen our health system.“Modern reliable infrastructure will help deliver more for patients, reduce waiting lists, and ensure Kiwis can get the timely and quality healthcare they expect and deserve.“Today’s announcement is in addition to the $6.39 billion of infrastructure investment already underway and will support Health New Zealand to deliver the modern reliable health infrastructure Kiwis rely upon. It’s about delivering for New Zealanders now, and creating a system that will serve future generations,” Mr Brown says.

Improving care for disabled New Zealanders

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More than 7,000 disabled New Zealanders will receive improved residential care, thanks to a $240 million four-year funding boost in today’s Budget. 
This is on top of more than $1 billion already funded annually for Disability Support Services. It means 89 residential providers across the country, and the people they care for, are better supported.
Disability Issues Minister Louise Upston says today’s announcement reinforces the Government’s commitment to stabilise the disability support system so it’s more consistent, transparent, sustainable and fair.
“As part of Budget 2025, the Government will increase Disability Support Services (DSS) funding for residential care by $60 million each year over the next four years, starting from 1 July 2025,” Louise Upston says. 
“DSS provides essential services and supports to more than 52,000 disabled people, including about 7,200 people in residential care facilities. 
“About half the DSS operating budget is allocated to residential care. It’s vitally important public money going to providers ultimately benefits the disabled people it’s intended for.
“Previously, funding for carers was unpredictable, subject to change or interruption, and varied across regions. The new funding will remove that uncertainty.
“These are very significant sums. Government contracts with providers must be robust, fair, and sustainable right across New Zealand.
“A new residential care pricing model will give providers, disabled people, and their families more confidence in the funding available. 
“It will allow for more flexibility and means that from 1 July, we are beginning to lift the funding constraints we had to implement last year. 
“Last year’s independent review was vitally important in responding to serious concerns about the state of disability support services. It found that the cost of residential care services was growing, without the settings in place to manage current or future needs. 
“Compounding those problems, the system DSS uses to pay residential providers hadn’t been significantly updated since 2016, leading to thousands of one-off, inconsistent rates.
“This new funding model sets a nationally consistent approach while also recognising regional variations in costs such as housing prices.
“Importantly, it also enables DSS to forecast expenditure, which will support the Government to make informed future budget decisions.
“My absolute priority is to ensure continuity of care to disabled people, and to support providers to transition to this new model,” Louise Upston says.
 

Tackling New Zealand’s rising tax debt

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The Government will boost its investment in chasing tax evaders, Revenue Minister Simon Watts says. 
“Hard-working Kiwis who pay their taxes are being ripped off by tax cheats who deliberately evade their obligations,” he says.
“New Zealand’s tax debt rose to $8.5 billion by the end of 2024. At a time when the Government is carefully managing every dollar to fund the essential frontline services Kiwis rely on, it’s essential we crack down on those who are not paying their share of tax.
“Every dollar we recover is another dollar we can devote to funding schools, hospitals, and law and order. Investment in tax compliance delivers real results for Kiwis.”
Budget 2025 provides new funding of $35 million a year for Inland Revenue to carry out tax compliance and collection activities. It also continues funding of $27 million a year provided in Budget 2022 that was due to cease in June 2025.
“We are already seeing returns from the compliance funding in Budget 2024. This increased investment will accelerate that,” Mr Watts says.
“In the year to March 2025, Inland Revenue collected almost $3 billion of overdue debt and is on track to collect more than $4 billion by 30 June. 
“The return on investment from compliance activities is increasing. The Budget’s compliance investment has an expected return of four dollars for every dollar spent in 2025/26, rising to eight dollars per dollar spent in 2026/27 and beyond. 
“We want to know that the funds we allocate are a prudent use of taxpayer dollars. That’s why a small portion of the funding will be used to develop internal capability to assess the indirect effects of audit activity, based on international best practice,” Mr Watts says.

More Police funding to improve public safety

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The Government is investing more in core police services to continue its good progress in restoring law and order and improving the safety of all New Zealanders, Police Minister Mark Mitchell says.
“This year’s Budget package continues to support Police’s frontline to deliver the policing services our communities need. Our frontline officers do an outstanding job, and this funding will help make sure they can continue doing that.
“We are investing $480 million over four years to support the Police frontline. Much of this remedies an under-funded increase to Police numbers inherited from the previous Government. It funded the salaries of 1800 extra Police, but not the associated infrastructure, equipment and other costs,” Mr Mitchell says. 
“There is also new funding of $60 million over four years for the Police Prosecutions Uplift Programme (PUP), and funding to update the out-dated Police payroll, human resources, and workforce management systems. 
“PUP is a programme of targeted interventions, including improving prosecutions to support court efficiencies and more timely case resolutions. It has the added benefit of freeing up frontline Police from administrative overhead. 
“The programme started in July 2023 in Auckland, and its success there means it will now be rolled out nationally. 
“Upgrading the Enterprise Resource Management technology will enable a modern, reliable system that ensures Police’s 10,000-plus staff get paid on time and deliver improved rostering and scheduling data to better inform frontline deployment decisions.   
“We’re supporting Police to crack down on crime and ensure there are real consequences for offenders.
“We’ve brought in new laws to go after gangs, we’re tackling youth offending and retail crime, and we funded beat teams to get more officers back on the beat as part of delivering 500 new officers. 
“We’re demonstrating our commitment to 20,000 fewer victims of violent crime and cutting youth offending by 15 per cent across our Government’s term. We want Kiwis to be safer at home and in their communities. We recognise there is more work to do, and this Budget contributes to that.”

Tertiary study subsidy boost in priority subjects

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The Government is backing the tertiary system with new investment in study that delivers the greatest value for students and for New Zealand, Minister for Universities Dr Shane Reti and Minister for Vocational Education Penny Simmonds announced today. 
“Budget 2025 invests an extra $398 million in tertiary education over the next four years. We need to grow our domestic pipeline of skilled workers to support the growing economy,” Dr Reti says.
Ms Simmonds says, “When considering subsidies, we focused on workforce demand areas where study adds the greatest value – both for students planning their futures, and for the wider economy that relies on their skills.
“These subjects often lead to rewarding careers and contribute to productivity and growth in sectors like health, energy, infrastructure and digital technology,” she says.
The Budget tertiary system investment includes:

$213 million to provide a 3 per cent increase in tuition and training subsidies in many subjects across all levels of tertiary study. The extra funding will be ongoing from 2026.
$64 million for an additional 1.75 per cent lift in tertiary education subsidies at degree level and above in high demand “STEM” subjects (Science, Technology, Engineering and Maths), along with Initial Teacher Education and other priority health workforce areas. This is on top of the broader 3 per cent increase, meaning that, in total, the STEM and other higher-priority subjects will attract a 4.75 per cent tuition cost subsidy increase at degree level and above.
$111 million to fund forecast enrolment in 2025 and 2026. This includes ongoing funding for another 175 Youth Guarantee students a year – this scheme provides fees-free tertiary tuition at Levels 1–3 to help young people move to higher-level study or work.

Budget 2025 proposes an annual maximum fee rise of 6 per cent for 2026 to further help providers manage cost pressures and maintain quality delivery. 
“The proposed maximum rate reflects that fees have lagged behind inflation in recent years, making it harder for providers to maintain course quality. I will consult on the proposed fee increase later in 2025 through a notice published in the New Zealand Gazette,” Mr Reti says.
“Together, the targeted funding rate increases and the proposed fee increase will support tertiary education and training providers to sustain the quality of provision and further invest in priority areas,” the ministers say. 
Changes to funding for vocational education and training will provide some additional support during the transition away from Te Pūkenga to the redesigned system. The new Industry Skills Boards will receive ongoing funding of $30 million a year for industry-led standards-setting alongside Budget funding for a one-off $10 million in 2025/26 towards establishment costs. 
“Provider-based delivery in priority areas, including engineering, trades and primary industries will receive a boost to funding rates. There will also be funding available for two years from 2026 for institutes of technology and polytechnics during their transition to greater independence,” Ms Simmonds says. 
“In developing the Budget package, we have reprioritised funding to focus on core activities and to further support frontline tertiary education services.
“Taken together, these initiatives support a sustainable tertiary education and training sector that will lift student achievement and contribute to growing the New Zealand economy.”