The first Labour government in close to a decade has pledged to make New Zealand a kind and equitable nation where children thrive, and success is measured not only by the nation’s GDP but by better lives lived by its people.

Finance minister Grant Robertson said the Labour coalition government didn’t want to “manage” issues such as child poverty and homelessness – it wanted to end them.

Although the 2018 budget was focused on rebuilding vital public services – particularly the health care sector – Robertson said next year’s budget would be the first in the world to measure success by its people’s wellbeing.

“We want New Zealand to be a place where everyone has a fair go, and where we show kindness and understanding to each other,” said Robertson. “These changes are about measuring success differently. Of course a strong economy is important but we must not lose sight of why it is is important. And it is most important to allow all of us to have better lives ... the government is placing the wellbeing of people at the centre of all its work.”

The 2018 budget had been preceded by weeks of cautious rhetoric by the government, which repeated time and again that before embarking on its ambitious social policies such as ending child poverty, tackling climate change and housing every New Zealander, it first had to invest in upgrading public services such as hospitals and schools.

Rebuild what? Well let’s start with New Zealand’s reputation shall we? Jacinda Ardern, prime minister

Labour’s first budget was viewed as restrained and fiscally cautious, with Robertson forecasting a NZ$3bn ($2bn) surplus this year, increasing to $7bn in 2020.

The prime minister, Jacinda Ardern, said her government’s first budget was not focused on the election cycle, but generational improvement in New Zealanders’ lives.

“Rebuild what?” said Ardern, defending her government’s budget and rounding on the opposition leader, Simon Bridges. “Well let’s start with New Zealand’s reputation shall we? We are rebuilding a government that thinks about people.”

“In 15 or 20 or 30 years’ time I want my child to look back on the history books and judge me and this government favourably, rather than deciding to change their name.”

New Zealand finance minister Grant Robertson discusses his budget plan in Wellington. Photograph: Nick Perry/AP

“If we’re not here for kids and the future of the country they live in, then why are we here? And if our budget isn’t about people than what is it for? And on both counts, this government is happy to be judged.”

“We could stick with the status quo – or we could try ... I would rather be a prime minister that tried and missed, than a prime minister than never tried at all.”

Major announcements in the budget include a $3.2bn increase in health spending, a commitment to build an extra 1,600 properties for public housing every year, cheaper doctor’s visits for half a million people (and free for those under 14), $450m for new schools, and $300m to recruit new police officers.

The education sector was also a priority, with early childhood education receiving an extra $590.2m over four years, $284m for children with special needs and spending on new classrooms and schools and teachers totalling $394m.

“Every child, regardless of how wealthy their parents are, what language they speak or their ability to disability, has a right to a world-class education,” said Ardern.

With health investment at the core of the budget Robertson thanked health care staff around the country, saying they had carried an unfair burden for too long, and had been neglected, underpaid and overlooked by the previous government.

The Department of Conservation received its biggest funding boost since 2002, with Green party co-leader and climate change minister James Shaw calling budget 2018 the “greenest budget in living memory”.

However opposition leader Bridges said the government had “no plans how we will earn more” as a country, and displayed “a special form of incompetence” in managing the economy.

“The big thing missing in this budget is any meaningful help for Kiwi workers. In fact middle-income families are getting steadily worse off ... Kiwi families can only look enviously across the Tasman where both the Australian government and the opposition are offering tax relief to boost family incomes.”

“This government’s anti-business policies mean the Treasury growth projections are more a hope than a prediction, despite strong growth internationally.”

The Salvation Army was also critical, saying although there would be some relief for New Zealand’s most vulnerable people, the government was a long way off fulfilling its election promises.

“It is not the transformational change we had hoped for,” said Major Campbell Roberts.

“it will not rid New Zealand of the combined plagues of homelessness and child poverty.”

Radio New Zealand’s deputy political editor Chris Bramwell said the budget was more conservative than forecast, while the New Zealand Herald’s political editor Audrey Young said it was neither boring nor exciting, though the education sector may be disappointed and had expected more funding.

Rod Oram at Newsroom.co.nz called it a “patch-up job”.

“There are no new initiatives for achieving the ‘transformation’ prime minster Jacinda Ardern is promising for society, the economy and environment,” Oram wrote.

“Rather than breaking ground for the foundations of a 21st century country, the government has so far only spray-painted a few dashed bright lines in eye-catching colours.”

Let me reassure the Opposition that this is not a dream,

there is nothing wrong with their television sets, and the red pill won’t do

anything. This is reality, and this is what a real government looks like.#Budget2018 — Marama Davidson MP (@MaramaDavidson) May 17, 2018

I love the intentions & sentiments behind #budget2018. They point in the directions I want NZ to go. But the money... is it enough? If we're going to deal to the massive social and infrastructure deficits, as well as transform to a sustainable economy, don't we need to be bolder? — BarbarellaStormforce (@BarbSturmfels) May 17, 2018