The Coalition Government is taking a pragmatic middle-ground path in its first Budget.

Delivering a pre-Budget speech in Lower Hutt this morning,  Finance Minister Nicola Willis outlined the challenging economic landscape.

High inflation, soaring interest rates, sluggish growth and rising unemployment have taken a toll on New Zealanders.

"Everyday workers are hurting and the reality of your struggle is impossible to ignore," Minister said.

"Our Government is clear-eyed about the raw deal experienced by too many Kiwis in recent times."

Cost of Living Relief

Tax cuts and targeted spending to ease squeeze on middle class.

The Budget's priority is providing relief to the "squeezed middle" - hard-working New Zealanders struggling with the cost of living crisis.

Meaningful but modest income tax cuts will increase take-home pay for 83% of those over 15 and 94% of households.

These tax reductions will be fully funded to avoid adding to debt or inflation.

"Treasury modelling indicates fiscally neutral tax relief reduces inflationary pressure and interest rates," Minister explained.

"Tax relief will be good for our economy."

Frontline services like health, education and police will receive targeted spending boosts to deliver better results.

Family households can also expect new childcare subsidies under the FamilyBoost payment announced earlier.

Durable Savings Identified

$1.5b in annual efficiencies to fund investments and balance books.

To support new investments while reining in spending, the Government has identified $1.5 billion in annual savings across public sector agencies.

This was achieved through line-by-line reviews to reduce back office costs, consultants and lower-value programmes.

"The savings mean every dollar redirected to frontline services like health and education is working harder for New Zealanders," Minister stated.

New revenue measures like taxing online gambling will also contribute to getting books back in surplus over time.

Sowing Seeds for the Future

Social investment to break cycles of vulnerability.

Looking ahead, the Budget lays foundations for a "social investment" approach to achieve better outcomes from $70b annual social spending.

A new Social Investment Agency will use data and analytics to guide smarter, earlier interventions for the most vulnerable.

A Social Investment Fund will directly commission services from communities to improve lives, preventing issues before they escalate.

These steps reflect the Government's determination to maximise human potential and build a stronger, wealthier New Zealand, Finance Minister Nicola Willis emphasised.