The finance minister is touting the bump in funding for next week’s budget, but critics say it’s a drop in the bucket, writes Catherine McGregor in this excerpt from The Bulletin, The Spinoff’s morning news round-up. To receive The Bulletin in full each weekday, sign up here.
$4b more to play with
With a week until budget day, finance minister Grant Robertson has kicked off the customary series of pre-budget speeches by announcing just how much the government’s cavalcade of cost-cutting has saved the public purse. The 2023 budget will include “$4 billion of savings and reprioritisations over the four-year forecast period”, including those garnered from prime minister Chris Hipkins’ recent policy purge, Robertson said in a speech yesterday. Talking to reporters afterwards, Robertson said a significant portion of the savings came from cutting budgets for staffing vacancies within the public service. Exactly how the $4b in savings – about $1b a year over the next four years – will be added to the budget will be revealed on budget day itself, Robertson said. A proportion may support the cyclone recovery, and Robertson is due to make a new announcement on next steps regarding the recovery project on Sunday. He’ll also give a speech today in Auckland “that will give more pre-budget guidance on infrastructure investment”, Businessdesk’s Pattrick Smellie reports (paywalled).
Just how much is $4 billion?
Immediately following the announcement, a debate erupted over whether $4b is a big number or, in the grand scheme of things, a very small one. Speaking to Toby Manhire on The Spinoff this morning, Craig Renney comes down on the side of “big”. “A billion dollars a year of new money [is] quite a lot of cash,” says the economist, who worked on Robertson’s first three budgets. “The most we could ever achieve [when I was there] was, I think, one year when we saved $1.7 billion over four years.” Writing in the NZ Herald, Jenée Tibshraeny argues the opposite. Saving $4b isn’t much given the size of the government’s books, she says, especially when you consider that many billions of the “whopper $81b allocated towards the Covid-19 response” were never spent. National’s finance spokesperson Nicola Willis also thinks it’s a piddling amount, all told. Having “sprayed the public money hose around with wild abandon” in last month’s budget, Robertson “now expects New Zealanders to be grateful that he’s cleaning up a small corner of the spending mess…. It’s simply too little, too late,” she said.
Seymour blasts ‘humblebrag’ tax letter
Following his speech, Robertson was asked about the open letter from 96 high-income New Zealanders calling for higher tax rates on the wealthy. While he wouldn’t be drawn on its content, Robertson did reaffirm that the government was not contemplating tax cuts now. The letter was criticised by Newstalk ZB’s Heather du Plessis-Allan, who notes that most of the signatories are not the “high net worth” individuals that were the subjects of the IRD’s recent survey. “So let me ask you this,” says du Plessis-Allan, “if extreme wealth is not the thing these signatories have in common, what is it really? Political leanings, maybe?” Another opponent is Act’s David Seymour, who says the group’s call for higher taxes is “anti-aspiration” and a “humblebrag” about how much they earn. The Greens’ Ricardo Menéndez March says a tax on the wealthy would make New Zealand more fair. “It’s beyond doubt that the money we need to support everyone in Aotearoa is already there.”
Beneficiaries and small businesses among Aussie budget winners
Across the Tasman, the Australian federal government has just announced its own 2023 budget and The Guardian has a good rundown of the budget’s winners and losers. Among those celebrating are low-income renters, small businesses, most beneficiaries, and politicians (they’re getting a big budget boost for frontline staffing and travel expenses), while the losers include middle-income renters and “rail lovers” – the latter because, despite an election pledge to prioritse a long-promised high-speed rail track along the east coast, the budget contained no new funding for the initial Sydney-Newcastle section, “nor for any other significant commuter rail projects around Australia”.