New Zealand's long-term challenges of mental health, child poverty, children in state care, family violence and homelessness are being taken seriously in the government's first Wellbeing Budget released on Thursday.

The Wellbeing Budget sees the government balancing record levels of investment to resolve key long-term challenges while maintaining fiscal responsibility; delivering a sustainable surplus and growth averaging 2.6 percent over four years, ahead of comparable economies.

"We have so often heard New Zealanders calling for early intervention and investment in challenging issues to save both money and lives in the long run. That is exactly what this budget delivers," Prime Minister Jacinda Ardern said in a statement.

The budget covers a 1.9 billion-NZ dollar (1.24 billion-US dollar) package over five years, including new universal frontline mental health service aimed at helping 325,000 people by 2023-2024; 40 million NZ dollars over four years in suicide prevention services; and 1 billion NZ dollars to re-develop the rail system, including purchasing new wagons, locomotives, tracks and infrastructure.

According to the Ministry of Health, New Zealand's youth suicide rate in 2011 for both males and females was the second highest in the Organization for Economic Cooperation and Development (OECD) countries.

The Wellbeing Budget also covers funding to tackle child poverty and climate change and help homelessness.

"This year's budget also represents systemic change as we work to break the cycle of poverty for kids," she said, adding the indexation of benefits will stop children in poverty falling further behind.

The 1,000 extra Housing First placements will see more children sleeping in warm and dry homes instead of bunking down in cars, she said, adding an end to school donations in lower socio-economic regions means children will no longer miss out of extra activities just because their parents cannot afford the voluntary donations.

Every year about 1 million New Zealanders are also affected by family and sexual violence, including almost 300,000 children, which was "ashamed of," the prime minister said, adding the record investment in family and domestic violence prevention and services will start to eradicate "this national stain."

"Today's budget shows you can be both economically responsible and kind," Ardern said.