Budget Updates 2025: What DSPs Need to Know

The Australian and Aotearoa New Zealand governments have recently released their mid-year Budget updates, containing outlooks on each country's economic trajectories and key priorities leading into 2026 Budgets.

We've summarised New Zealand's Half Year Economic and Fiscal Update and Australia's Mid-Year Economic and Fiscal Outlook to call out what these mean for DSPs and how government priorities or funding decisions impact the business software sector.
 

Aotearoa New Zealand Half Year Economic and Fiscal Update

The New Zealand Government Half Year Economic and Fiscal Update (HYEFU) and Budget Policy Statement 2026 were officially released on 16 December 2025. The HYEFU confirms that fiscal consolidation and spending restraint remain central to the Government's strategy. 

Forecasts shared in Budget 2025 initially estimated a return to surplus in 2028-29. However, the revised forecast shows a small deficit of $0.9 billion in 2028/29, with a return to a surplus of $2.3 billion now expected in 2029-30. 

The Government's stated short-term intention remains to return to surplus in 2028-29, noting that forecasting uncertainty and the ability adjust fiscal settings mean this target is still considered achievable. 

Budget 2026 Priorities

Looking ahead to Budget 2026, the Government has reaffirmed four core priorities:

1. Supporting the delivery of core public services, particularly health care, education, and law and order.
2. Keeping tight control of discretionary government spending while funding a limited number of priority Government policy commitments. 
3. Addressing New Zealand's longer-term productivity challenges. 
4. Developing a sustainable pipeline of infrastructure investments. 

Spending Allowances and Constraints 

The operating allowances for Budget 2026 to 2028 remain at $2.4 billion, with Budget 2029 now also set at this amount, signalling continued restraint across the medium term. 

Existing pre-commitments mean that, on average, only $1 billion per year remains available in Budget 2026. As a result, most agencies will need to manage service pressures with little or no additional funding, and any new initiatives will need to be funded through reprioritisation and savings rather than new spending. 

Australian Mid-Year Economic and Fiscal Outlook

Australia's 2025-26 Mid-Year Economic and Fiscal Outlook (MYEFO) was released on 17 December 2025. This year's MYEFO continues the Government's emphasis on fiscal restraint with clear signalling that this approach will carry through to the May 2026 Budget. 

While we've summarised the measures announced with potential implications for DSPs below, DSPANZ members can access our full breakdown via the members only section of our website. 

Data, digital regulation and consumer protection

• Consumer Data Right (CDR): Continued funding to support the operation of the CDR, including work to adjust policy settings to improve adoption and reduce participation costs. 
• Competition reforms: Additional funding has been provided to progress National Competition Policy reforms, which includes amendments to ban non-compete clauses for employees earning below the high-income threshold. 

Supporting and developing digital infrastructure

• Improving business registers: The Government is providing additional funding to support improvements to the Australian Securities and Investments Commission's (ASIC) business registers. The Department of Industry, Science and Resources will wind down the Business Registration Service in 2027-28 and incorporate these services into a new online company registration service to be delivered by ASIC and the Australian Taxation Office (ATO) Australian Business Register. 
• Working with Children Checks reform: Investment in a National Continuous Checking Capability to enable a national approach to Working with Children Checks screening. 

Tax, payroll and reporting obligations

• Crypto asset reporting: Australia will implement the OECD Crypto Asset Reporting Framework (CARF) in 2027, alongside a domestic crypto reporting regime. 
• Superannuation reform: The Government announced in October 2025 that it will be boosting the Low Income Superannuation Tax Offset (LISTO) and making amendments to the Better Targeted Superannuation Concessions measure. More information can be found on Treasury's website. 

What Do These Updates Mean for DSPs

Taken together, the New Zealand HYEFU and the Australian MYEFO point to a broadly consistent operating environment for DSPs over the next few years. 

Both governments operating within tight fiscal constraints, with limited scope for large discretionary programs. For DSPs, digital initiatives are most likely to emerge when they are closely linked to core service delivery, legislative compliance, or risk management, and when value for money can be clearly demonstrated. 

Looking ahead, DSPs should monitor:

• The evolution of AI governance and assurance frameworks, particularly as Australia builds capability in this area. 
• The future direction of data sharing and consumer protection regimes, including the CDR. 
• How productivity and infrastructure objectives are used to justify future digital investments in both countries. 

DSPANZ will continue to monitor the measures announced in these updates and in the lead-up to the 2026 Budgets to provide updates and further analysis.