Budgeting expectations: New Zealand Fiscal Budget 2018


Today is the day that New Zealand and the world see the first budget of the Labour-New Zealand First-Greens coalition Government. It will be the first delivered by Labour Treasurer Grant Robertson. In anticipation of the budget, here is a recap of what has been announced and what can be expected.

The broad shape of some large expenditures have already been announced. The details that are still to follow on these will come later as those expenditures are put into effect. So, what are they?

  1. Transport – A total of $28 billion has been announced for fixing transport in Auckland, a sum that caught many by surprise, and which will be spread out over a 10 year period
  2. Housing – KiwiBuild was given a N.Z.$2 billion capital advance in December to get underway the construction of 100,000 new homes in New Zealand, and $100 million was allocated in the first pre-Budget announcement of which $37.1 million comes from existing budgetary measures
  3. Christchurch – The Government made significant election promises to Christchurch, which include supporting commuter rail, assistance for those struggling with insurance claims
  4. Foreign Affairs – you can see my earlier article acknowledging the $1 billion allocated to the Pacific and other aspects of New Zealand foreign affairs, but it is worth noting the reopening of the embassy in Sweden which closed under the National government

With so many big announcements already made, one might be wondering if Labour has any more tricks left in the bag. Mr Robertson will no doubt be acutely aware of other areas of funding for which announcements will need to be made at some point. They include the courts, prison and Police so that we may get on with dealing to the methamphetamine epidemic taking hold as well as trying to address why going to prison does not seem to be working as a sentencing tool.

At some point Mr Robertson will also have to address the potential of a nurses strike for better pay and conditions, which if answered will cost several hundred million dollars. In this case though, I wonder if it not so much an inadequate budget as inept District Health Board planning – shortly after Labour was elected in 2000 I heard that scrapping the District Health Boards in favour of a central funding model would save $750 million per annum, and whilst I am not necessarily suggesting such a move, a review of them is tempting.

Other areas that will need an increase in funding are Research, Science and Technology – New Zealand has lagged behind other O.E.C.D. countries for years in terms of investment into science. Some scientists have observed what appears to them to be a war on science by politicians with agenda’s that do not necessarily conform to the known facts, particularly around environmental issues.

I personally doubt Labour will make any radical new announcements today. Most of what happens I suspect will be building on existing announcements. Still, this is a big day for Labour, New Zealand First and the Greens. Voters, despite National’s attempts to show the contrary will probably go easy on them until a sense of direction (or lack of)becomes obvious.

Mr Robertson will deliver the Fiscal Budget at 1400 hours.

 

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