Budget nights have changed little in recent decades other than more announcements being drip-fed earlier. Photo / NZPA
Budget nights have changed little in recent decades other than more announcements being drip-fed earlier. Photo / NZPA
COMMENT by Michael Cullen
As Minister of Finance, for nine years I went through the strange ritual of the presentation of the Budget, including the financial statements and proposed and estimated expenditure for the fiscal year ahead.
The Budget was, and is, surrounded by much secrecy, political speculation, informed (orotherwise) comment and excitement about its contents. For the media this usually means that what the Press Gallery decides ought to be in the Budget determines their judgment of whether it is up to expectations.
Only modest change has occurred since I first went into Parliament in 1981. Then the Budget was delivered in July for a fiscal year that began over three months earlier. Now it is delivered in May for a fiscal year starting July 1. Almost everything was kept secret until Budget night (delivery occurred at 7pm).
Now the Budget is preceded by many early releases, either of bad news (to get it out of the way), or good news of a lesser order than the Prime Minister and the Minister of Finance want to have announced on Budget day.
The most interesting outcome of last week's slightly juvenile pranks in this regard is that very little of the unauthorised releases made by National were of any great significance (and so the contents were little reported).
The fact that the most significant — replacing the Orion maritime surveillance aircraft — was described by Simon Bridges as buying "tanks" only serves to underline that fact, especially as the replacement had been well signalled in advance.
The real question that needs to be asked is whether Budget secrecy now serves any useful purpose at all. To answer that question it is helpful to understand what the Budget actually is in legal and constitutional terms.
It is founded in the longstanding doctrine, derived from the Westminster Parliament, that the government should not be spending money without parliamentary authorisation. The Budget, therefore, takes the form of an Appropriation Bill.
The Minister of Finance, in moving the Second Reading of the Bill delivers the Budget (the First Reading is done without debate the same day). Any revenue matters referred to in the minister's speech require separate legislation.
So what in this Appropriation Bill requires secrecy until the Bill is introduced just after 2pm on a Thursday, usually in May? The answer these days is somewhere between nothing and very little. The idea of a Budget Day is as at least as anachronistic as an Election Day (which now is really the last day of an extended election period).
As I have already pointed out, there have already been significant changes in attitudes and practices towards Budget secrecy over the last few decades. For example, the fact that excise duty on petrol might be going up a few cents a litre is scarcely here or there, given that prices at the pump may vary more than that from day to day due to movements in oil prices or the exchange rate.
The regular provision of much more fiscal information means that financial markets today have already largely factored in the likely financial impact of the Budget. One Trump tweet is of far more significance in terms of financial instability.
Budget nights have changed little in recent decades other than more announcements being drip-fed earlier. Photo / NZPA
Conversely, there would be much to gain by releasing all major details of the general policy framework and the details of spending in, say, the fortnight or so before the Appropriation Bill is introduced and debated.
The public, the media and key stakeholders would be better able to grasp the main elements if they did not appear in one big lump amid an over-excited atmosphere.
There would still be a case for a lockup on the day of the Appropriation Bill, though much reduced in scope and time. Its focus would be on the fiscal projections and assumptions, and provide an opportunity to challenge the minister around these.
There is no reason why the lockup should not end by midday, thus allowing all affected participants and stakeholders to be well-informed before the debate begins at 2pm.
No longer would the Minister of Finance have to read, word for word, a long prepared speech, unable to respond to any interjections. No longer would the leader of the Opposition be compelled also to have a prepared speech without knowing what is actually in the Budget (not that this would make any difference in some cases).
Most importantly, it would reduce the frenetic political atmosphere which surrounds the Budget. No longer would political pundits be able to write columns blaming the Minister of Finance for the fact they guessed incorrectly the Budget's contents.
Changes to Standing Orders and the Public Finance Act would be required, but not major ones. But a word of caution: Moving away from the current way the Budget is presented is such a simple and obvious idea that it is probably doomed from the start.
• Sir Michael Cullen was Minister of Finance from December 1999 until November 2008.
