The Bullshit Budget: who actually believes these numbers?
- Grant McLachlan
- 10 hours ago
- 3 min read
Arbitrary cuts, heroic forecasts and no map to the surplus — a Budget engineered to win a week of headlines before anyone does the maths.
I have sat in enough Budget lock-ups to know what fog-and-mirrors looks like, and Budget 2026 is a thick bank of it. The headline reveal — a return to surplus a year earlier than forecast — is built for a good first week, the few days when the Budget owns the news and the coverage runs reflexively warm. By the time anyone crunches the figures, the circus has moved on.
The trouble is that the surplus is not money in the bank. It is a $2.6 billion forecast for 2028-29, and only on Finance Minister Nicola Willis’ preferred OBEGALx measure, which conveniently excludes ACC; on the standard measure the books stay red a year longer.
So the real question is not whether the Budget reads well. It is whether anyone — Willis included — believes the assumptions underneath it.
Contents
A forecast dressed as a fact
The road to surplus needs almost everything to land at once.
Treasury has growth lifting from 1.2% to 3.2% by 2028, inflation halving, unemployment peaking politely, and the Government hitting ambitious savings targets across health, housing and welfare. Each is plausible alone; stacked together they are an optimistic call.
The 8700 public-service jobs are the tell: a headcount target of 55,000 by 2029, reached through a “sinking lid” and attrition rather than any stated view of what those people will stop doing. It saves money on paper. It is not a strategy.
A surplus that needs everything to go right is not a plan. It is a hope with a date attached.
The lost art of under-promising
There was a time when finance ministers earned trust by doing the opposite.
Helen Clark and Michael Cullen built three terms on conservative forecasts and surpluses that came in better than promised — the political dividend of under-claiming and over-delivering. Cullen even banked the good years, establishing the NZ Super Fund as a buffer for an ageing population.
A later government then suspended its contributions, and successive Budgets ran down the wider cushion, so that when the real rainy days came — Covid, Cyclone Gabrielle — little headroom was left.
Willis inherited that bind. Her answer is to forecast her way out, which is precisely the move that ends in missed targets.
Spending big, building nothing
Nowhere is the muddle clearer than defence.
The money is real and overdue: a $12 billion capability plan over four years lifts spending toward 2% of GDP, and this Budget takes the Defence Force’s funding to $5.49 billion.
Yet the flagship project of the new Defence Minister, Chris Penk — who also holds Building and Construction and Associate Emergency Management — is a $600 million housing programme built not by soldiers but by private firms and long-term leases.
Consider what the Defence Force actually does between deployments. Its largest recent operation at home was Cyclone Gabrielle, where around 1000 personnel cleared waste, restored water and trucked in supplies — work hampered by chronic staff shortages.
The Army’s combat engineers, meanwhile, amount to a single regiment at Linton. Compare the US Army Corps of Engineers, a uniformed force that builds and runs hundreds of dams, locks and levees. New Zealand has engineering schools beside its bases at Burnham, Linton and Auckland. It could train and sustain engineer battalions that build their own housing, hold bailey bridges and plant ready for the next slip, and gain real experience doing it.
Instead we pay the market rate and bank none of the synergy.
Cut loose and hope
That missing synergy is the Budget’s signature.
Public servants are cut rather than redeployed into anything more productive; money flows into roads with little published return; the instinct is to cut things loose and hope they come back stronger.
Superannuation, climbing from $24.7b to $31.2b by 2030, becomes the convenient excuse — the one big saving that lets every small wasteful spend survive untouched, even as Labour and NZ First earn their own share of blame for refusing to touch it.
And when the forecasts wobble, the framing reaches for shocks “outside our control” and a hopeful Treasury track rather than a concrete plan.
Two agencies have already shifted New Zealand’s credit outlook to negative.
The finance minister’s job is to steer the ship, not to outsource the destination to a forecast.
Budget 2026 is a story you can only believe if you skip the footnotes — and the whole bet is that you will.
