Backgrounding the 2017 Fiscal Budget


On Thursday, 25 May 2017, at 1400 hours the Treasurer, the Honourable Steven Joyce will deliver the New Zealand 2017-2018 Fiscal Budget. It will be the last budget for the third term of the National-led Government as New Zealand goes to the polls on 23 September. So what are the National Government priorities in this budget?

It is fair to say that this Government is brimming with confidence about its financial position. In the past year the Government has been able to announce a N.Z.$1.5 billion surplus. This is the first sustained surplus since the Government of Prime Minister Helen Clark which at its peak had a surplus of N.Z.$10 billion in the bank. It has received positive data about jobs growth, the Gross Domestic Product and the likely state of the surplus.

Being election year, the Government wants to be able to have more money available so it can be generous with spending promises in order to woo voters. And so far it has done exactly that – $500 million for the Police was announced in January. Mr Joyce has mentioned around $7 billion in planned spending over the next fiscal year. It is likely to have more expenditure planned for housing, health, education and dealing with crime issues waiting to be announced on Thursday.

With blowouts in mental health caused in part by strain on services as a result of highly stressful personal environments, people in Christchurch still struggling post earthquake, I expect the Treasurer will be announcing some sort of relief package. If not Mr Joyce runs the risk of the Opposition scoring hits when they respond in the post budget debate.

Housing is an issue National have never really gotten on top of. The announcement this week of 34,000 new houses was misleading as it includes a significant number of houses already announced earlier. The questions around this are whether or not there will be any top ups of housing allowances and related social assistance; whether any budgetary instruments will be employed to make it more affordable. Like mental health, it is an area where the Opposition can score hits in the post budget debate if Mr Joyce is not careful.

It will be interesting to see what announcements are made for education as a new Minister, Nikki Kaye was appointed just a few weeks ago. It might be that the major education announcements are withheld until the election campaign gets underway in July or August.

The other area where expenditure is likely is infrastructure. In the case of this Government and its preoccupation with road transport, more motorway funding is probable. I do not expect anything significant for buses, rail or the merchant marine.

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