Luxon said the Government were reviewing Kāinga Ora because it is an "abysmally, badly-run" organisation.

"I'm comfortable that we are fixing Kainga Ora,” he said

"We will make tough choices, we are here to turn the country around and to get things done... What we cannot do is spend another decade talking about a housing crisis and not getting things done."

Kāinga Ora was only told yesterday morning or the day before that first home grants would be axed, Housing Minister Chris Bishop said.

“We hadn’t told them of course because we had to take the website down,” Bishop said.

Luxon defended funding the Gumboot Friday charity as part of National’s coalition deal with NZ First.

Stuff reported today that the chair of the I Am Hope Foundation, which runs Gumboot Friday donated $27,000 to the National Party prior to the past two elections, and its recently-departed CEO sought the National Party candidacy for Botany in 2019, losing selection to Luxon himself.

“We should take the money out of the bureaucracy and give it to the community organisations,” Luxon said.

"Every New Zealander knows that Gumboot Friday is a fantastic organisation. Young people have been helped tremendously by Gumboot Friday and the work of Mike King and the counsellors that are involved with that.

"I make no apology for backing Gumboot Friday."

Luxon said Mike King's donations to the National Party had nothing to do with the Government's announcement.

"It's outrageous and ridiculous frankly if the Labour Party want to make that accusation. Mental health is not something that you politicise."

"He said it wasn't a one-off spend for the mental heath sector."

Prime Minister Christopher Luxon has defended his decision, announced yesterday, to axe the First Home Buyers’ grant, despite promising to keep it when asked about it on the election campaign.

“We have to make tough choices and the choice that we made is that we want 1500 more social housing places,” Luxon said.

Luxon also defended using money intended for frontline housing services to pay for the Kainga Ora review conducted by Bill English.

“We have delivered a good review. I am comfortable that we are fixing Kainga Ora… we are making tough choices,” he said.

Luxon said there needs to be a greater supply of houses built, rental properties and social housing to combat the housing crisis that New Zealand is in.

"I fully understand there will be some people that will be disappointed by that but the reality is we think that, as we've said, we'll stop some programmes and power up other programmes," he said.

"We live in a country the same size as Great Britain and Japan with a lot less people and yet we have very expensive housing prices and it's very hard to get hold of housing in New Zealand.” 

Housing Minister Chris Bishop said he was happy to look at individual cases of people who had missed-out thanks to his decision to kill the First Home Grant yesterday.

He abruptly announced on Wednesday that applications for the grant of up to $10,000 per individual for a first home were closed, effective immediately although existing applications would be honoured.

Bishop said there would be “cases on the margins” the Government would look at.

Prime Minister Christopher Luxon is speaking from Lower Hutt, outside of Wellington. Luxon has been visiting an engineering firm, as the countdown to his Government’s first Budget passes the one week mark. 

It will be streamed live on the Herald.

The Department of Conservation has also announced 124 public sector jobs will be cut.

“Today we announced that following this consultation, DOC will have 124 fewer positions overall. We will disestablish 257 permanent positions and create 133. 114 of the disestablished positions are currently vacant. We are working to transfer as many of our current staff as possible to these new roles through a management of change process to implement the changes by 1 July 2024,” Penny Nelson, DOC Director-General said.

DOC has been directed to find 6.5% savings from its budget to meet the Government’s savings target. The department also needs to fund cost pressures of approximately $7m for the next financial year (2024/25)," Nelson said.

“Over the past few months, we have identified areas where we could make savings, which included looking at the number of positions we have, our operating expenditure and programmes where the funding is ring fenced and funding is yet to be drawn down yet. We have tried to minimise the impact on DOC staff and on the conservation outcomes we are seeking.”

The Ministry of Social Development is proposing cutting 712 positions.

“MSD is reducing the size of its workforce to meet its fiscal sustainability commitments and ensuring it is managing within its funding baseline. It is doing this through a combination of voluntary redundancies, attrition, fixed term roles coming to an end, and the current change proposals,” Nadine Kilmister, MSD Deputy Chief Executive for People and Capability said. 

The agency had previously confirmed 200 voluntary redundancies were accepted out of 404 applications. 

It now states some additional redundancies have been accepted after "requests for reconsideration", taking the total to 218.

In her first pre-Budget speech, Willis confirmed the Government had hit its savings target of $1.5b of savings a year to fund its tax package.

Today, Willis acknowledged these cuts would go further. The savings would not be funnelled into tax relief, but into fiscal sustainability.

“There will also be other savings in the Budget – quite significant ones,” Willis said.

“What I think is less understood by commentators is that our savings go well beyond tax relief. The Government is making active choices to stop some areas of spending so that we can redeploy those funds to better uses in frontline public services and other Government priorities.”

Finance Minister Nicola Willis has warned Treasury estimates the Government is running a sustained structural deficit in the current financial year, worth about $6b. 

“After stripping out large one-off expenses, and adjusting for the economic cycle, the Treasury estimates a structural operating deficit of around 1.5 per cent of GDP in the current financial year,” Willis said.

 “Structural deficit is a technical term. More colloquially, we’re borrowing to pay for the groceries. That is not sustainable in the long term as it requires continual borrowing to cover expenses, leading to a never-ending debt spiral,” she said. 

Willis made the remarks in a pre-Budget speech to the Employers and Manufacturers Association in Auckland.

Finance Minister Nicola Willis will deliver a pre-Budget speech to the Employers and Manufacturers Association today. The speech is scheduled to begin at 2pm and it will be livestreamed by the Herald.