Toby and Bernard talk through the top lines in today’s budget, the economic forecasts on which it is built, and the ways it sets the scene for the campaign ahead.
Fresh from the budget lockup and with no obvious signs of sugar on his lapel, Bernard Hickey joins Toby Manhire for a special edition of Gone By Lunchtime.
Hickey recounts the mood in the budget media briefing, including Nicola Willis throwing shade at her coalition partner NZ First over its superannuation stance, the targeted bursts of sweetness for some in the budget and the bitter messages for others. He assesses the levels of optimism contained in the Treasury’s growth forecasts and questions the government determination to forswear any possibility of boosting borrowing.
Then there’s the picture the budget paints for the long campaign ahead.
The coalition parties will move quickly to turn the spotlight across the house, Hickey says. “It gives the government a chance now to really go after the opposition and Labour, in particular, to say, ‘OK, well, here’s the budget numbers, tell us what you’re going to do,” he said. “There’s really no excuse now for Labour. They have to come out with some policies now. They’ve got a clear budget set of budget numbers to plug into their own spreadsheets.”
Comments by the finance minister pointing to the growing cost of servicing an ageing New Zealand’s superannuation bill, and the side-eye at New Zealand First, could influence the months ahead. “I think we’ll see a bit more of a debate now about New Zealand superannuation, because the government’s chosen to use the budget as a launch pad for a real election debate on it.”
Willis’s indication in the lockup that she is keen to pursue something like a bank profit levy, but has been stymied by another coalition partner, could also “bubble up to the surface”, says Hickey. “From that news conference it’s clear Nicola Willis really wants to do it, and it’s Act that’s stopping her … [In 2017] the Australian government, then a conservative government, brought in a big bank profits levy, and these banks are the same banks, and they seem to operate perfectly well, and there’s plenty of investment in Australia. For Nicola Willis to be saying, I so want to get my hands on those billions, and David’s not letting me, I think that now becomes more of a debate.”
While users of the Waikato Expressway would celebrate funding for its extension, there was also likely to be “quite a bit of blowback from the regions”, he suggests, “now that we know a bunch of Roads of National Significance are not going to get the sign-off before the election”.
On top of all of that, the government’s promises are built on growth numbers based on a relatively rosy view around the Hormuz Strait. “Treasury is expecting this to be a relatively short affair, and does not expect it to have a major effect on the economy,” he says. “I worry that Treasury is being quite sanguine about this oil crisis.”
