The savings came from changes to the student loan scheme and an unused contingency for the Wiri Prison, Finance Minister Bill English said.
Priorities in this year's allocation include broadband, rail and schools.
In addition, the Government is investing about $12.2 billion over the next 10 years in New Zealand's state highway network and $3.8 billion through Transpower to upgrade the national grid.
"Tackling bottlenecks in our broadband, transport and electricity networks is a Government priority, as is providing high-quality modern schools and other social infrastructure," he said.
The spending outlined in the Budget included. -
• Broadband - $942 million to complete the Government's funding for ultrafast broadband and $28 million more to connect fibre to schools.
• Rail- $250 million more for KiwiRail for its 10-year turnaround plan as well as $88 million for Wellington's Metro Rail.
• Education - $109 million for leaky-building remedial work; advancing a public-private partnership at two new schools at Hobsonville, Auckland; an early learning information system to improve information on participation in early childhood education; and development of a moderation tool for teachers for national standards.
Mr English said state sector agencies would also be required to deliver better value from existing assets.
Agencies were being asked to consider speeding up the sale of surplus assets such as closed schools and surplus Defence Force property.
At the end of the last financial year, the Government owned more than $220 billion of assets and was expecting to accumulate $34.3 billion of net new assets over the next four years.
"We need to make sure we are doing that in a way that provides value for money for taxpayers and does not increase Government borrowing," Mr English said.
