The second set of government programmes to be cut, trimmed or delayed include the voting age, alcohol reform, a used container refund, and various transport projects.

Aimed at helping tackle the cost of living, it comes alongside a decision to increase benefits in line with inflation rather than average wages.

Prime Minister Chris Hipkins announced the decisions this afternoon following the weekly Cabinet meeting, saying combined with the first round of reprioritisation it was expected to save the government $1 billion.

He says this would give ministers and the government "more bandwidth to deal with cost of living" and the cyclone.

"The two lots of reprioritisation will save about $1 billion, which will be reallocated to support New Zealanders with the cost of living," he says.

"That's in addition to the over $700m in savings we reallocated to fund the petrol excise cut and half-price public transport extension through to the end of June."

Hipkins says the government was focused on bread-and-butter issues and the things that mattered most to New Zealanders.

"At the moment, the cost of living and the recovery from Cyclone Gabrielle are right at the top of the list."

The reprioritisation would also help save some money to provide extra support to families, and help curb inflation, he says.

"I want New Zealanders to know that the government's doing its bit and it cutting its cloth to suit the times that we are in. Some of the things that we're delaying or stopping do mean a lot to us as a government, but we're taking the hard decisions because we know that Kiwis are also making some tough calls."

Programmes on the chopping block:

• Clean car upgrade scrapped: A scheme which gives people a grant for a cleaner vehicle or a public transport subsidy if they scrap an old gas-guzzler is being stopped.
• Speed limit reductions narrowed: The programme will be significantly narrowed to refocus on the most dangerous 1 percent of highways, with some changes also around schools and marae and in small townships that a state highway runs through.
• Social leasing car scheme ended: A car leasing arrangement for families on low incomes. It was proving difficult to implement and many of the areas where it was trialled were affected by recent severe weather.
• Vote 16 legislation refocused: Work on the legislation that would lower the voting age to 16 in the general election - but would have required the support of three quarters of MPs to pass - is refocused on lowering the age for local body elections, which does not need to meet that threshold.
• Alcohol reform delayed: Advice looking at reform of alcohol pricing, sponsorship and advertising will be pushed back to April 2024 instead of March 2023.
• Container return scheme deferred: The scheme would have given small refunds to people who return used containers, which was estimated to add slightly to household costs.
• Advice on contractors deferred: The advice following an Employment Court ruling was set to look at the differences between a contractor and an employee. This will be put on hold until all cases are heard.
• Public transport refocused: The goal of increasing and improving public transport is being scaled back to target Auckland, Hamilton, Tauranga, Wellington and Christchurch.
• Auckland light rail in stages: Work on Auckland Light Rail will continue, but will be delivered in stages with the first stage expected to be confirmed by the middle of this year.

Benefits to increase higher, in line with inflation - PM Chris Hipkins

The government will also increase benefits and superannuation payments in line with inflation rather than average wages, Prime Minister Chris Hipkins says.

Student support and Superannuation payments will also increase by the same amount, kicking in from 1 April.

For example, a couple with children will see an increase of $40.86 to jobseeker support payments, to a total of $606.86 a week. It amounts to $5.54 more than the $601.32 they would have received under wage-aligned scheme.

The move will cost the government an extra $311 million, and is expected to affect about 1.4 million New Zealanders.

Hipkins says it would help people "feeling the bite" from the ongoing rise in living costs.

The Labour-led government had indexed main benefits to increases in the average wage rather than the Consumer Price Index (CPI) which monitors inflation, bringing it in line with the calculation for increases to Superannuation, as part of the 2019 Budget.

Wages had typically risen faster than the CPI but, with cost of living pressures increasing rapidly this year, Hipkins says Cabinet had agreed to provide additional support and increase main benefits by 7.22 percent, compared to the average wage increase of 6.24 percent.

"It was a practical solution to ensure those being supported by the government didn't fall behind," he says.

"Alongside this, working families will see increases to Working for Families, including an extra $4 for Best Start Payments taking it to $69 per week and an increase of $9 for the eldest child rate of Family Tax Credit lifting it to $136 per week."

The changes from 1 April will also be accompanied by already-announced decisions to increase minimum wage by $1.50 an hour to $22.70, and the Childcare Subsidy announced in November at a cost of $189m over four years.

- RNZ.