The annual document dump reveals previously unknown details about how the coalition’s first budget came together, writes Stewart Sowman-Lund in today’s extract from The Bulletin.
‘Proactive’ document dump reveals new budget details
A dump of documents released yesterday revealed a wealth of previously unknown details about how the coalition’s first budget in May came together. As the Herald’s team of press gallery reporters explained, each budget day is followed by a “proactive” release of documents explaining behind the scenes details, including government priorities and official advice. This year’s dump was slightly less proactive, the Herald noted, given it came in mid-September while most are released no later than August. The reason for that is twofold, with details of both government cuts and new funding initiatives revealed.
It’s been a few months since the budget was released – you can find our full report from the time here – but its core was the long-awaited tax reduction package that came into effect from July. With a price tag of $14bn, it required significant cuts across government departments and the public sector. As BusinessDesk’s Jem Traylen explained (paywalled), the documents show that while most agencies ultimately met the 6.5-7.5% savings target, it wasn’t an easy road. Four months out from budget day, nine agencies had failed to find the necessary savings and whether they would was “in doubt”. It shows that while the government’s budget was, at least in terms of delivering what had been promised, largely successful, things weren’t always straightforward behind the scenes.
Let’s take a peek under the budget hood and see what we can learn.
How Winston got his way at Mfat
Earlier in the week, Stuff’s Tova O’Brien obtained documents that revealed foreign affairs minister Winston Peters had gone above the finance minister and negotiated budget cuts at his ministry directly with the prime minister. It’s part of the reason, O’Brien’s reporting suggested, that Mfat was largely spared from the wholesale cuts that impacted other ministries.
Yesterday’s budget dump, explained Glenn McConnell, revealed further details. Peters did present a proposal that would meet the call for a 6.5% cost saving, though with “great reluctance”, and ultimately Mfat found just $15m to spare, amounting to about 1% of its budget. Treasury officials questioned this, arguing that other departments were more directly involved in the lives of everyday New Zealanders and “there is not a clear rationale for exempting MFAT from the savings process and treating it differently to other agencies”. Peters told the PM it would be “seriously unwise” to push ahead with wider cuts to the ministry, though other departments weren’t so lucky.
Officials pushed back on key funding pledges
The documents reveal that the government opted to go ahead with key policy pledges despite advice from officials. As part of its health spend, and as a commitment in the coalition agreement, the government committed $24m in funding to Mike King’s Gumboot Friday charity. We talked about some of the backstory and controversy earlier in the year. But as RNZ explained, Treasury suggested scrapping this, or at the very least phasing in it, arguing that “investment to address mental health issues is better directed to preventative initiatives”.
The planned funding of new cancer drugs, which ultimately didn’t appear in the budget, also came in for scrutiny. As the Herald reported, Treasury questioned the level of funding that had been committed and warned it would be insufficient. Ultimately, following widespread backlash in the weeks after budget day, the government announced a boost to Pharmac’s overall budget instead.
The “uncertain” cost of reintroducing charter schools was also questioned by officials, reported Kate Nicol-Williams at 1News. In late January, officials warned against including charter school funding in Budget 2024 and issued subsequent critical advice in the months that followed. When the budget was made public, it was confirmed that $153m had been allocated over four years and legislation is expected to pass this month. Meanwhile, RNZ’s John Gerritsen reports that the government was told of the wellbeing benefits of the school lunches scheme – but gave it a trim anyway.
Climate impact of the budget
Writing for Newsroom Pro (paywalled), Marc Daalder has helpfully dived into the climate impact of Budget 2024, with officials warning that the mix of cuts and new policies would equal 2.8 million tonnes of greenhouse gas emissions out to 2050. Officials at the environment ministry were shut out of the budget process, with Treasury largely left to calculate the climate impact. That 2.8m tonnes equates to about 5% of the country’s annual total, but it’s also equivalent to “100,000 additional cars on the road or 16 months of nonstop coal-burning by the Huntly Power Station”.
Labour’s climate spokesperson, Megan Woods, said the budget figures don’t paint the full picture. “We need to remember that the government did most of its slashing of climate initiatives within days of coming into office through the mini budget in December,” she said.