Finance Minister Grant Robertson reads his Wellbeing Budget 2019 in Parliament yesterday. Photo / File
Finance Minister Grant Robertson reads his Wellbeing Budget 2019 in Parliament yesterday. Photo / File
Despite the withering political onslaught of the past few days the Finance Minister Grant Robertson has whistled a happy tune and delivered a steadfastly optimistic Budget.
There was optimism in his fiscal projections. A confidence in the current economic growth path that is not shared by most economists.
There wasoptimism in his reinvention of the Budget documents to include wellbeing measures. And in his belief that these will be economically transformational.
So the Government will spend more, deliver lower surpluses and trust in Treasury's cheery economic forecasts at the upper end of the current consensus of economist opinions.
Westpac chief economist Dominick Stephens described it as "surprising" given tight economic conditions that both Robertson and Prime Minister Jacinda Ardern have acknowledged in the past few weeks.
In the short and medium term though the numbers leave precious little room for global economic shocks or even a deeper than anticipated domestic slowdown.
The slowdown is projected to bottom out this winter with GDP growth climbing back to 3 per cent. It might not.
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But the pessimists shouldn't forget that the Finance Minister has a fiscal trump card up his sleeve.
Based on the current track, he has projected debt to fall to just 18.7 per cent of GDP by 2023.
If he doesn't get there he can play his new set of Budget Responsibility Rules unveiled last week.
With a new debt target range in place (from 2022) of 15 to 25 per cent of GDP, he's effectively got 6.3 per cent of GDP up his sleeve.
That's almost $20 billion of extra spending he can call on without losing the fiscal high ground - more than enough to retain a cheery disposition.
Optimism also abounds in the Government's faith in the transformational power of the new wellbeing framework.
Perhaps the new format will change the core nature of Crown spending over time.
If we are to view it as a dashboard for measuring progress in environmental, social and human happiness measures then we can't really judge its success for some time yet.
There was never going to be much more the Finance Minister could say today to convince the cynics.
Perhaps another four Budgets down the line - should this Government get that far - we'll be able see more clearly whether this is the real deal or just clever marketing.
But for now, for all the hype about it, this was very much the kind of Budget you would expect to see from a Labour Government tethered to the centrist yoke of the middle New Zealand electorate.
Economists on the left of the spectrum - like BERL's Ganesh Nana - have called it a missed opportunity, bemoaning the lost opportunity to borrow more now and make social and infrastructure investments that would really shift the economic dial.
To some extent Nana will have allies in the business community bemoaning the lack of investment in areas like roading.
Berl senior economist Dr Ganesh Nana talks about measuring wellbeing.
Big questions remain - admittedly the kind that typically get asked by those grumpy pessimists in the business world - about what the Government is doing to drive wealth creation.
Robertson is quick to reassure business leaders that he understands the need to boost productivity and help business create new wealth rather than just redistributing the pie.
But this Budget had little in it for the pursuit of those goals.
A new funding scheme for venture capital to drive smart start-ups sounds good.
But for established businesses struggling with higher costs and skills shortages now that will be cold comfort.
Reinventing debt targets aside, Robertson must know that he needs business to thrive and the tax take to grow if he is to keep delivering the kind of wellbeing that has been promised. Perhaps this just wasn't the year.
