Julian Wood

By Julian Wood - 29/05/2017

Julian Wood

By Julian Wood -

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The Budget partnership between the people and our Government

Each year the Budget charts a broad course for the years ahead. It outlines how much money the Government has, what income it expects to get, and outlines the latest spending plans. It communicates to New Zealand what the Government wants to do and, broadly, how it proposes to get it done. This year, as the NZIER outlines, it’s a largely “prudent and unremarkable” vision statement for the country, written in numbers. We should thank our lucky stars.

Not too many years ago, understanding the Government’s books was near impossible if you were outside of Government. In the build-up to an election, not unlike the time we find ourselves in, opposition parties and even the Government would make innumerable promises backed by unknowable figures. Indeed, in 1972, then Finance Minister Sir Robert Muldoon, quipped on the opposition’s election promises, “They can’t promise anything because I’ve spent it all.” The problem was that no-one actually knew if he was making a joke or being truthful. It turned out the truth was worse than we thought.

We’re also comparatively fortunate to have a budget that asserts “you can’t have your cake and eat it too.”

International uncertainty and our high personal debt levels makes paying down government debt prudent. It puts the government in a good place to borrow tomorrow if an economic shock occurs. This does come at a hidden cost to the amount of money going toward our schools, hospitals, and wider government services. As the NZIER also note, while the amount spent on core services is increasing in dollar terms, once we adjust for inflation and a growing population, funding is actually falling on a real per person basis. Without productivity gains this will mean either poorer service per person or that some services will be cut.

The need for more “bang for your buck” actually goes deeper than is visible on the surface of this budget. Across the core services as money available per person drops, and our public servants look for efficiency gains, it will be vitally important not to dehumanise people in the productivity or efficiency process. It will also mean that the non-government services that often work alongside government agencies will become increasingly important in the provision of health, welfare, and education services to our communities. As such they will increasingly need to be a voice that is listened to in policy and politics.

Overall, while this year’s budget is largely “prudent and unremarkable” we should be thankful that we actually have a reliable budget to base our election decisions on. There should be no fiscal secrets hiding on the ninth floor to leap out the day after the election and surprise an unaware incoming Government or wider public. We should also understand that this is not a budget that relieves the cost pressures on our schools, hospitals and community welfare providers. It is a budget that realistically asks you to consider how to best spend your 20 dollar tax-cut, to benefit not only yourself, but also your wider community.

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Julian Wood

By Julian Wood -

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