I would highly recommend Poplar Lodge in Arrowtown. Both Jackie and Adin are seasoned travelers (Jackie’s photographs of her travels adorn the walls, which gives it a lovely homely touch), so they get the essentials right. It's clean and has great showers. However, Poplar Lodge goes way beyond budget traveler expectations. It has a large landscaped garden, there are barbecues on Christmas Day, and expert advice is on hand on what to see and do around Arrowtown. It truly is a home away from home.
Their website is here.