Muted appreciation of New Zealand government's "compassionate" Budget

"Compassionate conservatism" was how New Zealand Prime Minister John Key proudly described his government's seventh annual Budget on Thursday.

But commentators in the business and social sectors were generally muted on what they saw as tentative major policy initiatives.

Finance Minister Bill English eschewed cuts to big spend areas such as health and education in spite of failing to meet the government's self-imposed target of a return to an operating surplus this year.

Lifting welfare payments to the poorest families surprised many and a package to tackle child poverty, at a cost of 790 million NZ dollars (578.99 million U.S. dollars) over the next four years, was passed to respect a pledge Key made to focus on the issue in the flush of last year's election win.

But the carrots were balanced by the stick with greater requirements for parents on benefits to return to work.

While the tourism industry voiced disappointment at being blindsided by a new "travel tax" levied on both arrivals and departures at the border, the business sector mostly reacted cautiously to the Budget.

The government was taking an incremental approach to reforming its finances, said the Business New Zealand lobby group.

"The government's accounts continue to improve and the key economic indicators by which country comparisons can be made continue to move in the right direction, but the jury is still out as to whether a slowly approach is ideal," chief executive Phil O' Reilly said in a statement.

An Economic Note from the ASB Bank said the Budget contained very little "to rock the boat" in the markets and showed the government books were in good shape.

"Forecast growth is solid for the next four years. Moreover, relative to our developed economy peers, New Zealand's economy compares favourably," it said.

"While this Budget is rock solid on these fronts, its policy initiatives are more tentative options are still constrained by the tight fiscal environment New Zealand has endured since 2008."

Child and poverty experts welcomed the extra spending on the most deprived families, but lamented the lack of an overall plan to tackle persistent poverty.

"What we need is a comprehensive plan to reduce child poverty. A plan would set out exactly how we are going to do better for our children and how we're going to get there. This Budget is not that, " the official Children's Commissioner, Russell Wills, said in a statement.

The Council of Trade Unions (CTU) said public services including health, education, social housing and welfare were still "under attack."

"These crucial services, which impact on workers lives on a daily basis, are being stripped bare, increasingly privatized, and so under resourced that they are unable to meet the needs of the community," CTU president Helen Kelly said in a statement. Endi