Megan Woods, Grant Robertson and Chris Hipkins on their way into the House for the reading of Budget 2023. Photo / Mark Mitchell
Megan Woods, Grant Robertson and Chris Hipkins on their way into the House for the reading of Budget 2023. Photo / Mark Mitchell
EDITORIAL
Finance Minister Grant Robertson earlier signalled his sixth Budget would support people today, while also building the nation for the future.
Yesterday he delivered his recipe for that and in doing so, he might have had an eye on the October election.
The ingredients included extending the Government’s 20hours of early childhood education programme for 3- to 5-year-olds further to 2-year-olds at a cost of $1.2 billion over the four-year forecast period.
The $5 prescription co-payment will be abolished at a cost of $619 million over the same forecast period, meaning people will pay nothing for most prescriptions. Public transport will be free for children under 13 and half-price for under-25s, costing $327m over the forecast period.
The Government also announced subsidies to carry out 100,000 more insulation and heating retrofits, which it said will reduce energy bills for the vulnerable.
Illustration / Rod Emmerson
Whānau Ora has been boosted by $168.1m over four years and kapa haka festival Te Matatini received a long-sought funding injection of more than $30m.
Robertson had promised a “no-frills” Budget to reflect the economic struggles of current times and the need to support communities ravaged by severe weather events. There is plenty in the Budget that meets this remit but items such as the kapa haka festival and nearly $4m for Robertson’s implementation unit to monitor the Government’s delivery will be grist to the critics’ mills.
The Government had already released teasers of what would be in Budget 2023 such as $941m in cyclone- and flooding-related funding; $300m towards 300 more classrooms and up to four new schools; $73.5m towards family and sexual violence reduction; $419m to boost defence force pay over four years; $300m for emissions-reducing investments; and about $100m towards the Crown’s repayable grant for the Clean Car Discount.
The Budget included $4b of savings and reprioritisations over the four-year forecast period. So, what was sacrificed? A large amount came from cancelling things such as Covid-19 spending and axing sweetener payments promised to councils for Three Waters.
Robertson announced a Budget with billions more spending and billions more borrowing than was expected six only months ago, adding $300m more this year, then $500m more in his next three Budgets, leaving the Crown with net core Crown debt of $181b in 2027 (37 per cent of GDP), up from $128b now and $59b when Labour took office in 2017.
The books will be in deficit until 2026, one year longer than previously forecast. It is a far cry from his first Budget in 2018 when there was a surplus of $3.1b but we are a very different country after Covid-19 and the relief packages rolled out to keep businesses and the economy alive.
The next question is whether all this largesse will force the Reserve Bank to further hike interest rates.
There is, clearly, support for people in Robertson’s Budget but the big question - whether he has gained enough support for his party to build the nation for the future - will be answered in October.
