Today Mr Key said the four new state schools would be:
• Rototuna Senior High School in Hamilton.
• A primary school in Rolleston, near Christchurch.
• Two primary schools in Auckland - one at Kumeu and the other at Scott Point.
He said the Government would also establish three new kura kaupapa Maori in Whakatane, Gisborne, and Hastings.
The seven new schools would provide spaces for nearly 4000 extra students and the first was expected to open in 2017.
Mr Key outlined expansion plans for four existing schools:
• Golden Sands School in Papamoa.
• Hingaia Peninsula School in Auckland.
• Shotover Primary in Queenstown.
• and Papamoa College in Papamoa.
The Budget would also contain funding for an extra 241 classrooms around the country, half of them in Auckland.
Mr Key said the Budget would provide a further $80 million over four years to encourage private sector research and development on top of the $566 million over four years in co-funding for companies undertaking R and D.
The funding was equivalent to a 14 per cent increase in Callaghan Innovation's R and D co-funding budget.
It would get New Zealand closer to the overall target of 1 per cent of gdp being spent on R and D.
The extra $80 million would be allocated to a range of qualifying business over 12 months "on an objective, independent basis".
He cited two companies that had received similar grants recently: Rocket Lab, an Auckland-based aerospace company and Pultron Composites of Gisborne which was conducting R and D into resin technology and engineering.
Mr Key said he sought election because he believed New Zealand had under-performed as a country for many years.
With consistent and sensible economic reform, New Zealand was capable of being one of the world's best performing economies again.
"What we are seeing now are the first signs of that.
"I say we are just seeing the first signs of progress because a couple of good years are not enough to change our long-term well being."
He said there was still plenty to keep economists awake at night whether it was falling global commodity prices, a fragile Europe, or a weaker outlook for Australia and China.
"Now is definitely not the time for New Zealand to rest on its laurels."