Analysis: Finance Minister delivers 'nip and tuck' Budget
It was a nip and tuck budget delivered by Finance Minister Nicola Willis, writes RNZ political editor Jo Moir.
Photo:
RNZ / Samuel Rillstone
Analysis:
After a Budget of trade-offs, middle income New Zealanders may well be feeling shortchanged.
Yes, there was the promised boost to health, education, and law and order, but much of that will be spent simply keeping the lights on.
The cuts or "reprioritisations" required to make that happen are more tangible: less support via KiwiSaver or Best Start, or the onus shifting to parents to pay for unemployed 18 and 19 year olds.
And for the 180,000 workers who were pursuing pay equity claims, the cost could be significant.
It was a nip and tuck budget delivered by Finance Minister Nicola Willis, with wins in some areas paid for with losses in others.
More than 100 initiatives have been canned or halted to allow the government to spend an extra $5.3 billion a year - the cancellation doing the heavylifting was, as expected, the pay equity changes the government blindsided many with two weeks ago.
Of the new spending, $2.7 billion has come from putting a halt on 33 pay equity claims already underway and threshold changes affecting future claims.
In total Willis revealed on Thursday $12.8b over four years had been added to the Crown accounts from pay equity - a significant "blowout" from an initial cost of $3.7b expected in 2020.
Just how much has been set aside for contingencies for pay equity claims is unknown, with Willis refusing to say due to commercial sensitivities.
These are all numbers that would have added some useful context to the government's argument for pay equity changes two weeks ago, which instead descended into an 'explaining is losing' situation for Willis and her colleagues.
Ministers will insist it was better to make those announcements on Budget Day to show what the money was going to instead, but in reality it's just given more oxygen to the opposition's claims that women are paying for the Budget, except now they can say by exactly how much.
Pay equity protestors voiced their disatisfaction outside Parliament on Budget Day.
Photo:
RNZ/Marika Khabazi
For the government, its focus is on its flagship policy 'Investment Boost' - a new rule allowing businesses to write off 20 percent of the value of new assets like machinery and tools from their tax bill.
While it's forecast it could boost GDP by 1 percent and wages by 1.5 percent, those metrics aren't expected to be met for two decades and rely heavily on the depreciation benefits ultimately encouraging investment.
A welcome spend in the Budget will be roughly $400m on early childhood and school education, with a focus on extending the early intervention service, including 560 more early intervention teachers and specialists to help an additional 4000 children.
Extra money will also go to learning support coordinators and resources for children with the highest needs.
It's an area Willis said she was proud to deliver a boost in - making a difference for the children most in need.
In health it was another record spend - as they all are given the constant haemorrhaging the sector endures year after year.
A billion dollars of new capital spend will see fixes and upgrades to crumbling hospital infrastructure, while other new money will go to a number of already announced or expected initiatives, such as increased access to urgent and after-hours care, and training more doctors and nurses.
ACT got to once again deliver a health win. First it was news pseudoephedrine would be allowed back on shelves last winter - part of the party's coalition deal with National - this time round it's easier access to presecriptions moving three-month repeats out to 12-months.
And New Zealand First got its signature SuperGold card extension - support for an extra 66,000 retirees to claim rates rebates.
It was a Budget of take from here to give over there.
Willis and Prime Minister Christopher Luxon will have a big job ahead over the coming weeks and months to convince New Zealanders it has lived up to its name of 'The Growth Budget'.
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