The Government has set out its priorities through the annual Budget, outlining how it plans to allocate public funding and the policy direction for the year ahead.
According to Raewyn Bleakley, Budget 2026 reflects a focus on strengthening economic performance, signalling where attention and investment will be directed across the economy.
It also indicates a return to surplus in 2028/29, a year earlier than previously forecast, enabled by a projected increase in tax take, controls on government spending, capital projects, and a reduction in borrowing and debt service costs.
Changes to Commerce Commission appropriation and introduction of new grocery industry measures
Bleakley said that deep within the vote estimates, the 2026 Budget introduced two new grocery‑specific performance measures under the Commerce Commission’s appropriation, both aimed at tracking competition and supplier engagement in the sector.
There is also movement within the Commerce Commission's appropriation, likely reflecting upcoming changes to how the Commission is expected to operate, with a shift towards a more consolidated structure and a stronger emphasis on monitoring and enforcement.
Funding for Grocery Industry Monitoring and Enforcement has been absorbed into a broader Competition Regulation Enforcement and Monitoring category, with increased resourcing to NZD 27 million.
“This signals a clear intent to strengthen oversight and enforcement capability across regulated markets, including within the grocery sector, under the Commission’s evolving framework,” said Bleakley.
The first new measure aims to track the share of the national retail grocery market held by non‑regulated retailers, with a target to increase over time. This indicator is intended to reflect the range of retail choices available to consumers and aligns with the intent of the Herfindahl‑Hirschman Index (HHI) as a proxy for market concentration.
The second measure focuses on supplier familiarity with the Grocery Supply Code, which is also expected to increase over time, and is designed to assess the Commission’s effectiveness in raising suppliers' awareness and understanding of regulated retailers’ obligations.
Both indicators will be tracked against a 2025/26 baseline and carried through into the out‑years.
Overall Key Budget 2026 takeouts:
- Economic activity (GDP) is expected to increase from 1.2 percent in the year to June 2026, to 2.3 percent in 2027, 3.2 percent in 2028 before dropping slightly in the outyears to 2030.
- Inflationary pressures are expected to rise to 4 percent in the year to June 2026 before falling away to 1.6 percent in 2027 and then averaging around 2 percent in the out-years to 2030.
- Unemployment is expected to increase to 5.6 percent in the year to June 2026 before dropping to 5 percent in 2027 and falling further to 4.4 percent by 2030.
- The operating balance, before gains and losses excluding ACC (OBEGALx) currently forecast at a deficit of NZD 11.9 billion in the year ending June 2026, is expected to improve over the forecast period, with a modest surplus of NZD 2.6 billion expected in the year ending 2029.
- Core Crown tax revenue is expected to remain relatively stable as a percentage of GDP over the forecast period, increasing slightly from 27.6 percent in 2026 to 28.8 percent by 2030.
- Core Crown expenses are forecast to decline as a percentage of GDP, falling from 32.6 percent in the year ending June 2026 to 30.3 percent in the year ending June 2030.
- Net Core Crown debt is forecast to increase from 42.4 percent of GDP in the year ending June 2026 to peak at 46.1 percent of GDP by 2028 and falling slightly thereafter.
More local FMCG news here
