The 2026 budget hasn't sugarcoated New Zealand's financial situation, but has overlooked potential growth, according to businesses.
Industry leaders have responded to the 2026 "responsible" budget revealed by Finance Minister Nicola Willis, highlighting that there were missed opportunities for any economic boost.
Retail NZ said the Government has missed the opportunity to get people back out spending in their communities and encourage economic growth in the 2026 Budget.
“We would have loved to have seen the Government jump at this opportunity to help give local businesses a leg up, and even generate some revenue, by increasing the new low-value import levy, or by putting an additional tax on products that don't meet certain ethical and quality standards, such as fast-fashion and low-value goods made in factories with poor working conditions,” Retail NZ Chief Executive, Carolyn Young, said.
“The growing pressure on household budgets and declining consumer confidence has felt hard by retailers too, and our members have been calling for the Government to incentivise New Zealanders to shop in their local communities and show their love for their high streets.”
Low and middle-income families have this year received a NZD 50 weekly boost to assist their household budgets, but Young said that while that has meant shoppers are still spending, they’ve still had to cut back as inflation continues to erode the value of their earnings, and that is having a negative effect on the economy.
“The Government has set aside NZD 450 million in this Budget for additional temporary, targeted support if the fuel situation worsens, but retailers say there needs to be targeted relief for freight users now,” she said.
“While high diesel costs have been passed on to retailers, many have been reluctant to pass those on to customers, with getting shoppers in the door also something our members are having to balance. If some of that NZD 450 million was put towards a reduction in Road User Chargers for freight, with the provision those savings are passed on, that would help to ease some of the strain being felt by our sector.”
Retail NZ is encouraged, however, that some of the announcements could have a positive effect on the unemployment rate.
The Government has boosted trade training opportunities for secondary school students, with that providing opportunities for NEETs (those not in employment, education or training) to become more active members of the New Zealand economy.
“The infrastructure package the Government has announced also will create jobs in those particular regions, and it’s great to see a focus on transport resilience projects, including the next stage of the Waikato Expressway and rail network upgrades, to ensure efficient movement of goods around Aotearoa.”
Another important area of focus for retailers is action on crime, and Young said it’s pleasing to see that investment in police continues to be prioritised by this Government.
“Our police do such important work in taking action against retail crime, which costs New Zealand retailers NZD 2.6 billion each year. To see this Budget putting NZD 391 million towards frontline policing is vital to ensure our police can continue to do their work and keep our communities safe.”
The Budget is also introducing a new levy on banks, non-bank deposit takers, insurers, and other financial market participants to help cover the costs of services provided by the Reserve Bank. Retail NZ is concerned that without proper oversight, that could end up being passed on to the rest of New Zealand.
“We are worried that the cost of this new levy could end up being passed on to businesses and consumers, which goes against the spirit of this policy,” Young said.
“Banks already charge high fees and make good profits, and we don’t want a scenario where this new levy is also passed on to the average New Zealander. Retailers, for example, are already having to pay high fees for card transactions passed on by banks and credit card companies, and we would hate to see yet another fee introduced that ultimately ends up driving up the cost of goods and services for consumers.”
Young said this Budget announcement, in addition to the Reserve Bank Governor yesterday signalling likely hikes to the Official Cash Rate going forward, will have left retailers feeling unsettled.
“Interest rate rises usually results in households cutting back on spending, as more of their income goes towards servicing mortgages and paying rent. This will be a worry for many retailers, with the strain of higher costs and reduced spending unlikely to be mitigated by this Budget."
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