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Ben McKay

Cuts and tax relief take centre stage for NZ Budget

Finance Minister Nicola Willis will hand down the New Zealand coalition government's first budget. (Ben McKay/AAP PHOTOS)

Kiwis will embrace the New Zealand coalition's budget of cuts, Finance Minister Nicola Willis says, as they are "sensible" and "understand that no government can live beyond its means".

Ms Willis will hand down the coalition government's first budget on Thursday, which will slash public spending in a bid to "right-size" the government's footprint.

The hard-nosed budget will shrink the public service by 4000 jobs and reveal 240 initiatives that will be shrunk or scrapped, producing multi-billion dollar savings.

"When we came into office, we knew we needed an ambitious plan to not only give Kiwis cost of living relief but also to refocus government investment on front-line services and bring back responsible economic management," Ms Willis said.

"Budget 2024 is our plan to do just that."

All three parties in the right-leaning government - conservatives National, libertarians ACT and populists NZ First - campaigned on public sector cuts.

A mini-budget last December scrapped more than $NZ7 billion ($A6.5 billion) worth of Labour's planned projects, including childcare rebates and climate spending.

More will be revealed on Thursday.

Government parties also campaigned on their own plans to offer tax relief, which will be the centrepiece of the budget.

The size and scale of the government's tax changes, after much closed-doors negotiations between the parties, will be unveiled at 2pm.

The road to the coalition's first budget has been bumpy, with botched pre-budget announcements and confusion around some commitments.

Earlier this month, Prime Minister Chris Luxon and Corrections Minister Mark Mitchell were roundly criticised for not knowing detail behind a new mega-prison south of Hamilton.

Ms Willis has also claimed both capital and operational spending in defence and foreign affairs will increase, when announcements from her ministers appear to contradict that.

Among other details selectively released by ministers ahead of the budget, the government will reduce spending on school lunches to poorer students, increase defence pay, and fund the introduction of private schools.

It will also increase spending to lure teachers to New Zealand, to fund new medicines, to youth mental health service Gumboot Friday, and to Surf Life Saving.

On the same day as the budget is released, the government will also face a day of national protest co-ordinated by the left-wing Maori Party.

Disgruntled by the coalition's plans to dis-establish Maori-only services and redefine the legal status of the Treaty of Waitangi, thousands of people are expected to demonstrate at dozens of sites across the country.

Mr Luxon has attacked the protests, saying those who chose not to work on the day are acting illegally.

Alongside the tax changes and government's spending plans, Treasury will also release its updated economic outlook, informing the fiscal forecasts.

With negative growth in four of the past five quarters, NZ is in recession, giving the government less revenue and blowing out forecasts for a return to a budget surplus.

Amid the gloom, Ms Willis said she was confident that Kiwis would support the budget.

'We're a government that is doing what we said we would do," she said.

"New Zealanders are sensible. They understand that no government can live beyond its means indefinitely.

"When they see us delivering on our commitment to right-size the government footprint, to rebalance things, they I think see us delivering."

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