27 May 2016

'This is a very pedestrian budget'

9:25 am on 27 May 2016

Raising the cost of cigarettes to $30 a packet by 2020 is a kick in the guts for working people, New Zealand First leader Winston Peters says.

Winston Peters on the bridge at Parliament.

Winston Peters says the Budget was a kick in the guts. Photo: RNZ / Alexander Robertson

Mr Peters said middle New Zealand got nothing from this year's Budget, and making cigarettes more expensive would hit them the most.

The cost of a packet of cigarettes - currently $20 - is to go up by 10 percent every year for the next four years, as the tobacco excise duty increases.

Mr Peters said tobacco was a legal product and a lot of children would not be fed because of the price rise.

But Prime Minister John Key was making no apology for it, and said smoking was the most predictable killer in New Zealand.

A behind the scenes look at the Prime Minister John Key and Finance Minister Bill English getting ready for Budget 2016 on Thursday 26 May 2016.

Prime Minister John Key and Finance Minister Bill English preparing for Budget 2016. Photo: SUPPLIED/@NZNationalParty

The government's 2016 Budget contained more than $1.5 billion in new spending, and earmarked $300 million for Auckland housing, and $652m for social services.

Labour leader Andrew Little said it was not very ambitious.

It failed to tackle core problems of child poverty, unemployment and housing affordability, he said.

Mr Little said people would continue living in cars and garages, and people in Auckland still would not be able to buy their first home.

"This is a very pedestrian budget. The classic plaster on a compound fracture. We've got bigger problems that needed more attention."

Labour Party leader Andrew Little responds after the government delivers Budget 2016.

Labour Party leader Andrew Little responds after the government delivers Budget 2016. Photo: RNZ/Elliott Childs

Mr Key said New Zealanders had high expectations the budget would deliver on the core areas of health, education, security and economic growth.

He said there were no question it did that.

"So you can always be adventurous, but adventurous generally means that somebody is a lot worse off. That you're making quite radical changing."

Mr Key said it was a continuation of eight years of a National-led government.

Green Party co-leader Metiria Turei was not impressed and said the budget lacked vision.

Metiria Turei 24 May 2016

Metiria Turei 24 May 2016 Photo: RNZ/Elliott Childs

She said nothing had been done to address the most important issues facing the country.

Mrs Turei said the government had reduced spending in the budget to make it easier for it to announce tax cuts in election year.

United Future leader Peter Dunne said while the budget was not the most exciting, it was very profound.

"There's some big changes in the way in which the government is approaching its whole task of social spending. I think the social investment strategy is not an immediate eye catcher now, but I think over time it will be seen to be one of the big significant shifts."

On Thursday, Parliament sat under urgency to pass budget legislation to increase tax on tobacco and remove Emission Trading Scheme subsidies.

Parliament will continue sitting under urgency on Friday, to progress the bills through all of their stages.

Budget 2016: Read RNZ's full coverage here.

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