With the budget just weeks away we’ve created a helpful (mostly) alphabetic introduction to the mysteries of the annual government Budget.
A
Ambitious
What every budget always is.
B
Books
In budget-speak, this exclusively refers to accounts, often in relation to the balancing thereof, and disappointingly never to potboiler novels.
C
Chewing gum
Michael Cullen’s 2005 budget was derided as the “chewing gum budget”, after promised tax relief was thought to be worth about a pack of gum. There’s always a race to attach a label to a budget, and sometimes, like chewing gum, they stick.
D
Deficit and debt
These two concepts are different in a crucial way. A deficit is how much more money is going out across a particular budget year; the debt is the total cumulative amount owed.
E
Expenditure
Budget-speak for ‘spending.’
F
Fiscal headroom
How much money you have access to if you need to start borrowing. “Fiscal” is a catch-all term for government tax and spending; compare “monetary policy”.
G
GDP
Gross domestic product. In effect, the total economic output of the country.
H
Health
The area of the Budget that can literally never get enough money to satisfy everyone.
I
Interest payments
If government debt gets too high, then the interest payments can be financially damaging.
J
Jam tomorrow
A phrase that gets used when budgets are more austere, with the promise of further spending in future years. Completely coincidentally, jam years tend to also be election years.
K
Keynesian economics
Named after John Milton Keynes, an economist who theorised that governments can and should spend to stimulate the economy, particularly in times of recession.
L
Lolly scramble
How the opposition will invariably describe a budget with lots of new spending, especially anything looking like a pork barrel, although obviously that doesn’t make a very appetising lolly.
M
Monetary policy
The overall strategy implemented by central banks, to target interest rates or the rate of inflation. Not directly within the purview of the budget.
N
NEETs
People who are not in education, employment or training, and a key target for spending from Shane Jones’ billion dollar regional economic development fund.
O
OBEGAL
Budget nerd heaven, this is operating balance, excluding gains and losses.
P
Pre-budget announcements
In the weeks leading up to Budget Day, governments these days always make various portfolio-specific announcements, which means greater attention for those decisions, and fewer surprises on the day itself. Sometimes, if you’re lucky, budget commitments get announced lots of times.
Q
Quantitative easing
A method by which (in simplified terms) the government increases the monetary supply in the economy through a central bank, often described as “printing money”. Widely used overseas, but tends not to be in New Zealand.
R
Robertson, Grant. The finance minister who will be delivering his first budget. There are many questions about how Robertson will handle the budget, including: will he follow recent tradition and celebrate by eating a pie?
S
Surplus
More important symbolically than in fiscal reality, but delivery of a surplus – in which there is more in the revenue column than the expenditure column, has become a defining measurement of the performance of finance ministers in the last decade.
T
Ties
No, really. The colour of a tie the finance minister wears while presenting a Budget supposedly sends a signal about how they want it to be interpreted. A bright colour means it’s a bold, big spending budget, a muted colour means the Budget will be austere and dignified. Or so the pundits say.
U
Underfunding
This word will be used a lot by Mr Robertson, as he makes the case that there hasn’t been enough spending by the previous government, which he needs to correct.
V
Visualisations
These are generally the key ways that Budget spending is communicated on the day, given the complexity of the figures being thrown around.
W
Wellbeing
A measure the current government plans to introduce by the 2019 Budget to track how the country is performing socially, culturally and environmentally, rather than just economically.
X
Xat
It’s tax, but backwards. Next!
Y
Yes
The word the finance minister never says straight away when another minister asks them for some more money in the Budget
Z
Zero budget
A budget in which there is no increase in spending. Typically used when governments are desperate to pay down debt
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