Welcome to The Spinoff’s live budget day updates for 2021. Get in touch at firstname.lastname@example.org
Just want the headline details? See below for the budget, in brief
5.30pm: Māori Party ‘cautiously optimistic’ – but lack of Whānau Ora funding ‘puzzling’
The Māori Party is confused over the complete absence of Whānau Ora funding in today’s budget.
The minister in charge, Peeni Henare, had previously put a bid in with finance minister Grant Robertson for extra funding but it was clearly rejected.
“Te Tiriti o Waitangi demands that Tangata Whenua secure 50% of all the resource and decision making power,” said co-leader Rawiri Waititi in a statement. “Equality demands that Tangata Whenua secure 16% of all the resource and decision making power. Equity demands that Tangata Whenua secure 25% of the lions share” said Waititi.
Overall, the party is “cautiously optimistic” about the budget’s support for Māori.
“Its the first time we have seen a budget that has accepted a need to take a targeted approach rather than a universal one,” said Debbie Ngarewa-Packer.
“Whilst we see this recovery budget as a step in the right direction for Māori, we remain cautious. The big question is who will be responsible for the delivery of these initiatives?” Waititi added.
5.10pm: Abuse in care inquiry pleased with budget funding
An extra $90 million has been given to the Royal Commission into abuse in state care as part of budget 2021.
The funding has been welcomed by the commission, who say it will allow for “the full extent” of historical abuse in state care to be exposed.
“This includes delivering a redress report in October 2021. The report will contain findings about the adequacy of past and present state and faith-based systems to compensate survivors for the abuse they suffered in care and include recommendations for future systems,” said a statement.
5.00pm: Pest control, environmental measures criticised by Forest and Bird
Alex Braae reports:
Environmental lobby group Forest and Bird has criticised the budget, which they say “fails on pest control, cameras on boats, kauri dieback, and large scale climate initiatives”.
In a twitter thread, the group picked apart aspects of spending, saying it wouldn’t go far enough to properly address environmental issues.
“Kauri dieback has only had about a third of what is needed. $8m per year, declining to only $4m in 2024, isn’t enough to bring back the health of our northern forests, or protect our still healthy kauri.”
$32 million has been allocated to this programme.
There was also disappointment that DOC won’t be seeing any “major” new money, saying another “mast year” of high pest numbers is on the way.
“Worse still – the forecast is for conservation funding to decrease over the next four years, while the biodiversity crisis gets worse.”
In terms of major environmental initiatives that are in the budget, $300 million will be put towards investment in low-carbon technology, $344 million will be spent on a “major redevelopment” of Scott Base in Antarctica which does climate change research, and there was a commitment to recycle revenue from the Emissions Trading Scheme back into emissions reductions programmes.
4.50pm: Ports of Auckland chief quits after scrutiny over independent review
We briefly interrupt today’s budget coverage for some unrelated, but important, news.
The embattled head of Auckland’s port has announced he will stand down at the end of June.
Tony Gibson has faced public scrutiny after an independent review found systemic problems with health and safety at the port under his leadership.
In a statement, he said he loved his job and leaving was a tough decision. “I love working at Ports of Auckland. It is an organisation full of absolutely wonderful people doing amazing things,” he said.
Auckland Business Chamber chief executive Michael Barnett called the loss of Gibson “unnecessary” in a fiery follow-up statement.
“This resignation is not about the supply chain, health and safety or modernisation. It is about political and union bullying,” he said.
“It’s about people who expect their own people to be respected, listened to and fairly treated but have not reciprocated. They have failed in the delivery of empathy and wellbeing for one of their own.”
4.40pm: Vote in our poll!
4.30pm: The great Spinoff hot-take roundtable – the experts react
What do the experts have to say about budget 2021? Here’s what Sam Stubbs from our roundtable had to say:
Anyone who might question the Labour Party credentials will have little to talk about now. This was a traditional Labour budget, designed to quell any discontent in the base.
And given the K-shaped recovery post Covid, it is entirely appropriate that what was left in the kitty goes to beneficiaries. Nothing helps alleviate poverty like cold hard cash.
Business should be happy too, with more for infrastructure and trades training, and debt being properly managed. Grant Robertson is no drunken sailor with the nation’s chequebook.
My only disappointment is with continued spending on rail. The government’s environmental credentials would be better served by spending much of that money on electric vehicles, especially buses and cycleways. But just as Harry Potter didn’t get the bus to Hogwarts, so the Labour government cannot wean itself off the romance of rail.
This budget cements Grant Robertson’s place in a trifecta of great finance ministers, along with Michael Cullen and Bill English. Well done.
Meanwhile: another excellent piece of commentary. Contributing writer Danyl Mclauchlan has labelled budget 2021 “more ambitious and coherent than anything yet from Ardern and Robertson”.
With what reasoning? You can read his full write-up here.
4.15pm: Tepid response to budget from business community
The business community has offered a fairly lukewarm response to budget 2021 – at least according to the first two press releases to have landed in my inbox.
In a media statement titled: “No great benefits for business from the balanced budget 2021”, the EMA has criticised the government for leaving the business community out of the budget.
“While no one would argue against supporting our people, we had hoped for better growth projections and more practical support for businesses,” said chief executive Brett O’Riley. “Everyone expected a budget based on modest economic growth projections, and indeed GDP is forecast to remain at around 3%, on average, out to 2025.”
O’Riley said that the announcement of a social insurance scheme would be welcomed “if it was structured correctly”.
“It would need to include contributions from employees, employers and the government though, otherwise it would add significant liability to the balance sheets of businesses,” he said.
Business NZ has approached the budget similarly, acknowledging the social spending but expressing disappointment at the lack of economic focus.
“Business was keen to see less burdensome regulation, policies to stimulate growth and development, and more certainty around business policies into the future,” said chief executive Kirk Hope.
“We’d appreciate a plan to fix the housing crisis and more certainty around the plan for economic recovery from Covid.”
The budget is a missed opportunity for growth from a budget perspective, Hope asserted.
Meanwhile, Auckland Business Chamber head Michael Barnett has simply said: “Compassion won. Business got nothing”.
While Barnett said it is right to help people who cannot work, it’s disappointing the budget gave no relief to tourism, hospitality or accommodation operators.
“If we are to increase prosperity it must be for all and be measured in increased productivity not just the size of our mortgages,” he said.
3.50pm: So, what’s this budget called then?
In years gone by we’ve had the “mother of all budgets”, the “fudge-it budget” and the “one dollar bill budget”.
So what moniker will stick with budget 2021?
Here’s what the parties (and some of the media) are calling it:
Labour: The Recovery Budget
National: The Broken Compass Budget
Act: The La La Budget
Newshub’s Tova O’Brien: The Blockbuster Beneficiary Booster Budget
Stuff (in a headline only): The Deep Red Labour Budget
Ex-MP Peter Dunne: The Curate’s Egg Budget
This list will continue to be updated…
What should it be called? Send me an email at email@example.com
3.25pm: Anti-poverty advocates back budget benefits boost
A welcome response to the government’s budget benefit boost from those who represent our most disadvantaged communities.
Today’s budget has revealed that benefits will increase by $20 a week in July and up to $55 weekly within two years.
In a statement, children’s commissioner Andrew Becroft said the extra money is an “important and significant” step forward for children living in poverty. However, he raised concerns that the needs of children were still not being adequately met.
“More than 125,000 children are living in material hardship, and Māori, Pacific and disabled children figure far too much in that group. Their wellbeing needs to be specifically targeted for improvement,” Becroft said.
Meanwhile, Save the Children has also welcomed the boost but urged the government to be “courageous” in its investment in children.
“While we welcome the additional support for our tamariki and whānau, particularly with a portion of these payments beginning from July, for many families facing rising housing costs these income lifts won’t significantly shift their standard of living and the full effect of the increase won’t be felt until 2023,” said Advocacy and Research Director Jacqui Southey.
“While we acknowledge the government’s ongoing commitment to child poverty – and that today signals the largest increase in benefits in a generation – we hope this signals a turn in the tide to the demeaning benefit custs of the early 90s. We still have a long way to go to achieve liveable incomes for our whānau on the lowest incomes and urgently need to see continued investment.”
3.55pm: ‘Useful if insufficient’ – CPAG
Child Poverty Action Group has cautiously welcomed the announcement of a benefits increase – but said it’s not as transformational as the welfare expert advisory group had recommended.
“We’re also concerned that many children in households with disabled members are not affected at all by these changes – and yet they are nearly three times as likely to live in hardship than other children.”
3.00pm: The budget does come with a free lunch
Political editor Justin Giovannetti reviews the food from his first in-person budget at parliament.
Budget day is about so much more than red ink and the economy. It’s also about food.
Reporters, analysts, economists and other political types are locked in a room at parliament for about four hours before finance minister Grant Robertson stands in the house to deliver his budget. In exchange for losing access to the internet and the freedom to go for a walk down Lambton Quay, these people get fed.
Like any room full of people who woke up early and are facing tough deadlines, the budget lockup has coffee. Bottomless cups of terrible, watery and somehow caffeine strong coffee. After three cups my hands were shaking. In an un-economic choice, the Treasury provided only paper cups with plastic lids. No one could walk away with the coffee, so ceramic or those unbreakable glass cups were clearly called for.
A large table of catering was set out about an hour before people had to file their stories. This is food you need to eat fast. The centrepiece was large plates of sausage rolls. As someone who has only eaten sausage rolls as part of Treasury lockups at parliament, I’m a fan. I grabbed four. This was all being piled on a small paper plate. There’s no judgement at a lockup. A television producer walked away with two plates stacked high. “Don’t judge,” she said. “Power to you”.
There were also platters of sushi, half were vegetarian and half were salmon. I grabbed the salmon. Then there was a big tray of sandwiches. I poked one that was purple in the middle. The man behind me looked at it as well. Curious and slightly troubled. “Don’t eat it if you don’t recognise it,” he said. It was beetroot.
I should have grabbed more salmon.
In a corner were three large trays of lamingtons. Unlike in previous years where they’ve apparently come in different colours – white, black, red – This year they were pink. Two went on top of a tottering plate.
All this food got eaten as I walked back to my computer and asked an economist to explain, while we walk, how the government’s capital spending programme was being redirected away from infrastructure.
It was gone in a few minutes.
2.50pm: Political leaders speak to budget
Grant Robertson has just concluded his lengthy speech as the budget was officially tabled for 2021.
Now, Judith Collins is offering the National Party’s response. She’s called it a “budget that’s light on hope and utterly lacking in ambition” and slammed Grant Robertson as a minister unable to deliver on her promises.
We’ll have a full write-up on the speeches later today – and scroll down below for the first reaction from the opposition parties.
This is a Broken Compass Budget with no direction for getting the country back on track to prosperity.
National would be more aspirational for New Zealanders. We don’t want Kiwis to just exist on a benefit. We want them to have jobs, to prosper and to have a future. pic.twitter.com/LAxg7AK1N7
— Judith Collins (@JudithCollinsMP) May 20, 2021
2.40pm: The daughter of all budgets?
If you’ve been watching finance minister Grant Robertson speak in the house, you will have heard several mentions of the Employment Contracts Act along with many invocations of Ruth “mother of all budgets” Richardson.
This year marks 30 years since both Richardson’s controversial budget and the introduction of the Act.
If you’d like you a primer on what the big deal here is, I recommend you read this piece on 30 year anniversary of the Act by The Spinoff’s Alex Braae.
2.30pm: Hillside factory reopened, new rail infrastructure funding in budget
Rail enthusiast Alex Braae writes:
The government has announced a new investment in rail infrastructure, as part of the 2021 budget.
The centrepiece of it will be the renewal of a wagon manufacturing facility in Hillside, Dunedin, with plans to assemble 1500 wagons there. The loss of a major contract at Hillside in 2012 was taken by many as a symbol of the disappearance of manufacturing jobs in New Zealand.
Local MP David Clark said “the Hillside Workshops have been an important part of Dunedin’s history and economy for over 100 years and we’re building off the nearly $20 million investment we made in 2019 to re-establish them as a mechanical hub.”
Transport minister Michael Wood said the wider rail package was indicative of the government’s focus on the area, as a way to move freight efficiently, reduce congestion, and reduce emissions.
“On average, every tonne of freight moved by rail produces at least 70% less carbon emissions compared with heavy road freight. This helps with New Zealand’s crucial transition to a low carbon economy,” said Wood.
A new South Island Mechanical Maintenance Hub has also been funded, and will be built in Waltham, Christchurch. “Our investments also support the 4,000 jobs at KiwiRail. As outlined in our New Zealand Rail Plan, we’re going to keep getting rail back on track after it was left in managed decline by the previous Government,” said Wood.
Kiwirail has reacted with delight to the budget boost. In a release, chief executive Greg Miller said it was “an outstanding level of investment from the Government which is truly revitalising rail for New Zealand”.
“KiwiRail has already replaced its aging North Island locomotive fleet, and this latest tranche of funding will fully cover the cost of replacing our South Island locomotives, many of which are more than 40 years old, and purchasing new electric shunt locomotives.”
He said the investment would result in Kiwirail taking on “about 200” more employees.
In response, Green transport spokesperson Julie Anne Genter tweeted “the investment in rail in #Budget2021 is welcome, but it is mostly still catching up on maintenance what we have, allows for some growth. Far from the step change we need for regional rapid rail.”
First up on from the budget hot takes, the opposition.
National: The benefit boost featured in budget 2021 won’t help New Zealanders find work, say National’s pair of finance spokespeople. “We were hoping for a Budget that finally took New Zealand’s productivity crisis seriously, that would grow our economy rather than keep treading water. There’s nothing on that front,” Andrew Bayly said. The extra $200 million of funding for Pharmac is “welcome” – but Michael Woodhouse said it’s not going far enough. “Kiwis suffering from rare diseases and cancers will be hugely disappointed when they see Labour has been prepared to pump more than double that, $490 million, into bureaucracy and restructuring costs.”
The Act Party: David Seymour has criticised the budget for doing “nothing for middle New Zealand”, calling them the “battlers” who have worked hard but been “squeezed from every direction”. Unsurprisingly, the Act Party is critical of the level of government debt. “By 2024, government debt is set to exceed $94,000 for every New Zealand household. This is borrowed money,” said Seymour. “Interest rates won’t be low forever. It will be our children and their children having to pay back this reckless spending.”
The Greens: Unsurprisingly, the Greens have welcomed today’s budget. Marama Davidson – the minister for the prevention of family and sexual violence – has praised the $132 million investment in community prevention programmes. “The initiatives we are investing in today reflect what we have heard from families, whānau and communities experiencing violence,” said Davidson. “We need to enable our community-led, whānau-centred services to provide sustained and holistic support built around families and whānau.”
James Shaw is celebrating the multi-million dollar boost for battling climate change. The budget includes $300 million to accelerate investment in low-carbon tech along with almost $20 million to support the government’s response to the Climate Change Commission’s recent report. “This Budget will enable us to develop a clear, ambitious plan for long-term emissions reductions that will, in turn, create more of the jobs and opportunities for prosperity that can be driven by the transition to a low-carbon future,” he said.
All you need to know, in brief, from our political editor Justin Giovannetti:
- Benefits will be boosted by $20 a week in July and up to $55 weekly within two years.
- A new unemployment insurance programme could cover 80% of a worker’s income if they lose their job.
- $380 million has been set aside for 1,000 new homes built for Māori.
- Projections show a balanced budget by 2027 with debt peaking at 48% of GDP.
- Hundreds of millions to centralise health care, Māori health, farm planning and education standards.
- House prices are projected to increase only 0.9% by next year, experts say that’s hard to believe.
Want to know more? Read Justin’s in-depth report here.
Very shortly, we’ll have the first wave of reaction and response to the budget as it rolls in across the afternoon.
1.45pm: Budget 2021 – everything you need to know here, from 2pm
We’re just 15 minutes away from the release of budget 2021. We’ll have all the details you need to know here followed by reaction and response from the opposition as it rolls in this afternoon.
Grab yourself a cheese roll and keep this tab open and refreshed from 2pm.
1.10pm: No new community Covid-19 cases, one in MIQ; weak positive cases in ‘four cities’
While we wait for the budget – it’s business as usual, which means today’s Covid-19 update.
There is just one new case to report today: a recent returnee from India who tested positive in managed isolation.
There are no new community Covid-19 cases. Two previously reported cases have now recovered, taking the total number of active cases in New Zealand today to 24.
Our total number of confirmed cases is 2,303.
Meanwhile, the Ministry of Health has moved to reassure New Zealanders that the recent “weak positive” results detected in wastewater are no cause for concern.
Weak positive results have been detected in Wellington, Christchurch, Rotorua and Queenstown, said the ministry.
“Wastewater testing serves as an early warning system in the fight against Covid-19, as it does in many other countries,” said director general of health Ashley Bloomfield.
“When wastewater testing returns weak positives, it’s essential that anyone in these areas with symptoms consistent with Covid-19 stay at home and promptly call Healthline about getting a test. Any cases of Covid-19 need to be detected quickly in order to stop the virus spreading in our communities. This is especially important as we head into winter, as people may have the usual winter coughs and colds.”
1.00pm: One hour to go – budget details to be released at 2pm
We’re now an hour away from learning the details of budget 2021, with finance minister Grant Robertson set to reveal all the details at 2pm.
Political journos are currently getting the inside word at a parliamentary lock-up that started at 10am this morning.
We’ll have a full write-up from our political editor Justin Giovannetti at 2pm along with a condensed version right here in the live updates. Then, this afternoon, expect rolling updates and reaction to the budget as it comes to hand.
While it may be tradition for Robertson to enjoy a cheese roll on budget day, a different form of roll was on the menu here at Spinoff HQ. Namely, a spring onion pancake roll from Bo’s Dumpling in Morningside. This is not sponsored content but I’d take it if it was offered. Simply delicious.
12.05pm: Waikato DHB facing third day without IT systems
The Waikato DHB is spending its third day without IT systems after a crippling ransomware attack.
Cancer patients may need to be transferred to other parts of the country as a result, with the DHB’s head Kevin Snee saying the attack could continue until next week.
“It is likely to run into and beyond the weekend but we’re uncertain when it will reach resolution – that will become clear over the next 24 to 48 hours,” he told RNZ.
The majority of elective surgery will be able to continue, said Snee. “We’re dealing with almost 85-90% of elective surgeries going ahead at the moment. The majority, two-thirds, of outpatients, are going ahead … if it’s one that requires significant digital imaging, cardiology for example, then we will rebook those people … mental health is going ahead as normal.”
Cyber experts were working to reset individual computer systems as quickly as possible, but Snee said he could not comment further on the ransomware as it was now under police investigation.
10.50am: Whānau Ora to miss out on budget boost – report
Whānau Ora will miss out on extra funding in this year’s funding, despite a push from the minister in charge.
According to Newshub, Peeni Henare had put a bid in for additional funding but this was reportedly knocked back by Grant Robertson.
Henare recently told Newshub Nation that his portfolio was well deserving of a financial boost. “We smashed it in the last 14 months with respect to Covid – Whānau Ora has been one of the highest performing portfolios in this government as far as I’m concerned,” he said.
The lack of funding is a particular blow after speculation today’s budget would have a lot to offer Māori. Robertson had previously teased a “significant” boost for Māori housing.
10.30am: New budget, new tie
Grant Robertson has been gifted a new budget day tie from none other than prime minister Jacinda Ardern.
In a thrilling unboxing video, the finance minister reveals his glorious new red tie ahead of unveiling the budget itself later on this afternoon.
Robertson also shows off his budget day cheese rolls because it can’t be a budget without a novelty food item.
The new tie joins the ranks of many a budget day special; in case you missed it, we’ve ranked the ties already.
And, below, enjoy a quick journey through the budgets of the past 20 years.
9.50am: You’ll soon be entitled to 10 days sick leave
The government has followed through on its election promise to up the minimum number of sick days.
It will now be required that all employers get at least 10 days of sick leave entitlement each year, a boost from the current five.
“If Covid-19 has taught us anything, it’s how important it is to stay home when you’re sick,” said workplace relations minister Michael Wood. “Having a minimum of 10 days sick leave will help more people stay at home, support working parents, and stop bugs from spreading.”
The changes will come into force in about two months time, with employees gaining the extra sick leave when their individual entitlement rolls over.
8.50am: Budget preview – what’s on The Spinoff?
Here are some top notch reads on The Spinoff this fine budget morn:
- Political editor Justin Giovannetti takes a look at the key things to look out for in today’s budget.
- Duncan Greive takes a look at the five factors that make this budget – the first by a party governing with an absolute majority under MMP – like no other.
- Does the finance minister’s tie on budget day tease what’s to come? Josie Adams asked menswear expert Murray Crane to help rate the ties of budgets past.
8.00am: ‘Significant’ Māori housing boost tipped for budget
It’s budget morning, which means speculation about what may or may not be getting a funding boost is in full swing.
One thing we seem to know already is that the government has been holding back a Māori housing announcement for today’s budget. Back in March, the government released a major housing policy that attempted to tackle the problem of first home buyers but largely ignored problems specific to Māori home ownership.
Finance minister Grant Robertson has remained typically coy, but said that a “significant” announcement can be expected in that area in today’s budget.
“We do know that Māori home ownership rates are much lower than the rest of the population, so it is an area that we want to put focus on,” he said.
It’s expected to be the only money for housing in today’s budget after the government’s March announcement brought in changes to the bright line test and the development of a new $3.8 billion infrastructure fund.
Meanwhile, there is speculation that the government will unveil more money for combatting child poverty as well as for beneficiaries and low income earners. As noted by the Herald, Jacinda Ardern did not make any announcements after the recent release of child poverty numbers.
Full details about today’s budget will be revealed at 2pm after a media lock-up at parliament.
7.30am: Top stories from The Bulletin
It’s fair to say any hopes of a big Keynesian spending blowout are likely to be dashed in today’s budget. The expectations have been well and truly managed by the government – whether that means they really are going to take quite a conservative approach, or they want any big surprises to stay that way, remains to be seen.
So far there have been a few pre-budget announcements. There’s a useful wrap piece by Irra Lee on One News that covered them off, in the areas of women’s health, pay parity for ECE teachers, and decarbonising the public sector. Covid will also probably dominate spending announcements today. In a pre-budget announcement yesterday, minister Chris Hipkins revealed $1.4 bn would be set aside over two years for the vaccine rollout, with a billion of that going towards purchasing the jabs themselves, reports Radio NZ.
But we’re unlikely to see massive new projects that will take up heaps of public sector capacity. It’s something that hasn’t always been looked at in the context of government plans, but it’s fairly important. As Politik (paywalled) reported yesterday, there is currently no “bureaucratic capacity” for major new reforms. This isn’t necessarily a reflection on talent or resourcing or anything like that – it’s just that RMA reform, the health system overhaul and so on are also taking place this term. “Instead it is likely to be a document which moves sums of money around largely within existing policy areas,” wrote Politik’s Richard Harman. For more analysis on the background to this budget, read this piece by Duncan Greive about how the political situation in front of Labour is unprecedented – what with their extreme levels of parliamentary power, and the incredible cheapness of money right now.
So what might we see? Grant Robertson has signalled that there will be something in the area of Māori housing and child poverty, reports the NZ Herald’s Jason Walls. And our political editor Justin Giovannetti has written about the five big things to expect – some of them have been listed here, but his last point is really key, in that Robertson is also likely to focus heavily on debt, and how he’d love to spend heaps more but that would involve borrowing more than he’s happy with. Because everyone is equally in the dark on this, I asked around the office: Toby Manhire reckons there’ll be ” something substantial for social housing and something interesting for exporters,” Stewart Sowman-Lund thinks it’s time for more money for racing, Simon Day wants a big bump of spending on cricket, and culture editor Sam Brooks expects the arts to be defunded.
Finally, keep an eye out today for our live updates, with the budget being read from 2pm. And if you want an A-Z guide to some of the terminology that’ll be thrown around, well, here’s something I prepared earlier.
The government has had to introduce emergency legislation to continue the Covid vaccination programme, reports Stuff’s Thomas Coughlan. A High Court decision, made after a case brought by a group who are against “compulsory vaccinations”, has questioned the legislative basis for the vaccine rollout. As such, health minister Andrew Little said the law change would be passed under urgency. National and Act both indicated they’d support the government on it. An important point: The court case and law change should not be taken as any indication that the vaccine is unsafe.