The business sector gets little from the budget but should benefit from work generated by the big spending on infrastructure and consumer spending from family support programmes.
There will be $300m spent to support the development of medium sized start-up companies wanting to develop and commercialise products and services.
Economic development Minister David Parker said the money, which will come from the Super Fund and the Venture Investment Fund, aimed to fill a capital gap for fledgling local companies. After 15 years all funds invested, and any returns, will be returned to the Super Fund.
“New start-ups are well served, but mid-sized ones between $2m and $15m are not well supported.”
“We also want to increase the amount of technology that gets commercialised and to lift the level of innovation in New Zealand,” he said.
In recent years a host of New Zealand tech companies have headed to Australia to raise money, leaving the local stock exchange short of new listings.
Businesses will also benefit from close to $250m to be spent on skills training and apprenticeships.
The $10bn of capital spending – especially on hospitals, schools and other public facilities – will offer a pipeline of work to local contractors.
The big infrastructure winner looks to be KiwiRail which gets $1bn over four years to upgrade and extend its network, buy new rolling stock and Cook Strait ferries.
Transport Minister Phil Twyford said the investment would help reduce heavy truck traffic, improve freight movements and reduce carbon emissions.
Another $157m is also being allocated to support businesses become more productive and develop high-value, low-emissions products, including help for start-up businesses.
The economic underpinnings of the Budget are softer than those forecast in December’s half-year update, with growth seen averaging about 2.6 percent over the next four years, while unemployment holds around 4 percent and inflation slowly climbs to 2 percent.
The government is paying for the bulk of the new spending and capital investment by running lower Budget surpluses, down $9.2bn from the December forecasts, while it also increases its borrowing by $5bn.