Pacific aid rises as domestic cuts hit Ministry for Pacific Peoples in Budget26

New Zealand is increasing its financial support for the Pacific region in Budget 2026, even as the Coalition Government tightens spending at home and cuts funding for the Ministry for Pacific Peoples (MPP).

The Budget shows a clear split between Aotearoa’s regional priorities and its domestic cost-cutting drive.

On the international front, the Government is stepping up its Pacific engagement.

New Zealand will spend $1.2 billion on foreign aid this fiscal year, around $116 million more than the last year.

A $20 million investment has been set aside to cover the costs of hosting the 2027 Pacific Islands Forum Leaders' week. The major geopolitical event is expected to bring 17 Pacific leaders and about 1500 delegates to New Zealand's shores.

The Government has also committed $109.75 million for development cooperation and humanitarian assistance across the Pacific and Indo-Pacific regions.

Officials say the funding is aimed at helping countries deal with economic pressures, climate impacts, and security challenges. A further $145.3 million will go towards maintaining what the Budget describes as a "resilient, safe and secure" offshore diplomatic network.

Finance Minister Nicola Willis, David Seymour, Shane Jones, and Chris Bishop: Willis has delivered Budget 2026, which increases New Zealand’s financial support for Pacific nations while confirming cuts to the Ministry for Pacific Peoples and tighter domestic spending. Photo/Pacific Mornings/William Terite

Domestic cuts for Ministry for Pacific Peoples

While Pacific-focused funding overseas is rising, the Ministry for Pacific Peoples is facing a tighter financial outlook at home.

Budget 2026 includes no new funding for MPP and confirms baseline reductions are already underway with further savings expected over the coming years.

The Ministry will lose $2.8 million over four years, averaging a $700,000 reduction each year from 2025/26 to 2029/30.

The Budget says the savings will come from "increased efficiencies in workforce and operational management".

Prime Minister Christopher Luxon's government has increased Pacific funding alongside domestic public sector cuts and tighter spending across government agencies. Photo/Supplied

Immigration focus

Immigration is another key area in this year's Budget, with new funding aimed at both enforcement and system upgrades.

The Government is investing $18 million into Immigration New Zealand and Labour Inspectorate compliance work.

Officials say funding will help respond to breaches, reduce backlogs, and improve enforcement action against exploitation.

For Pacific communities, including families working under the Recognised Seasonal Employer (RSE) scheme or on temporary visas, the move is aimed at strengthening protections for vulnerable workers.

Budget 2026 documents outlining New Zealand’s increased Pacific funding commitments alongside reduced domestic spending, including cuts to the Ministry for Pacific Peoples and wider public sector savings measures. Photo/William Terite

But the Budget also signals that immigration costs may increase. An "Immigration Funding Package" includes $31.2 million in operating funding and an $84 million capital contingency fund.

The money will go towards identity technology and maintaining core immigration services.

For Pacific communities in Aotearoa, today's Budget announcements highlight increased spending on New Zealand's relationships and responsibilities in the region, while domestic agencies focused on Pasifika communities face tighter budgets and reduced funding.