Editorial: Budget 2022 aims for long-term vision, short-term support

Finance Minister Grant Robertson during his presentation at the Budget lockup at Parliament. Photo / Mark Mitchell

EDITORIAL:

Finance Minister Grant Robertson had said his Budget 2022 would be about providing economic security for New Zealanders - the Secure Future Budget.

"We do that in the here and now. We do that so New Zealanders know that they can pay the bills and do the things they need to do now. But we also have to do that for the future."

He said that's where the huge investments into emissions reductions figure, as well as the overhaul of the health system. But he also predicted a lot of his Budget would be about "making sure we support New Zealanders in this time that is tough for a lot of people."

Robertson was certainly armed to do all this with the Budget allowance for new operating spending at $6 billion - the largest in New Zealand's history and a long way over Labour's previous record of $3.8b.

Previously devised as a top-up for those most in need, Working For Families has become a mainstay to remain afloat for 60 per cent of families receiving the family tax credit. This has now been bolstered with a new temporary $27 a week payment for people who earned less than $70,000 last year in a $1 billion cost-of-living package. Fuel tax cuts and half-price public transport were also extended for another two months to the end of August

As Thomas Coughlan warned yesterday, inflation forecasts are crucial. In the UK, the Labour opposition is currently making merry in attacking the Tory Government with allegations of "stagflation" or stagnant GDP growth and inflation. Yesterday's Budget forecast a peak of around 6.9 per cent in the middle of this year before easing to 5.2 per cent in 2023 and dropping to below 3 per cent by 2026.

Some of the big winners are in emissions reductions, particularly research and development as we had already heard, and in healthcare, with the more detailed initiatives taking about half the new funding.

For this, $11 billion will go to clear DHB deficits over four years and catch up with cost pressures ahead of the rollout of the health reforms; $188m to the Māori Health Authority. $1.3b to upgrade hospitals, including Whangarei, Nelson and Hillmorton and $1.1 more funding for measures such as more ambulances and helicopters, GPs and Māori providers.

Other funding injections went into Pharmac, and in delivering long-promised dental support.

There were also the already announced packages of $100m for mental health and $562m for police. Amongst the surprises yesterday were in transport, not so much the $200m towards first stages of light rail project in Auckland, but feasibility studies for a new port in Manukau Harbour and for a dry dock at Northland's Northport, as well as $349m for new trains and wagons.

The choice of necktie for Robertson by Prime Minister Jacinda Ardern had a pattern of red bubbles bouncing on a blue background. It is unlikely this Budget will give Labour the bounce it wants in the polls.

That will more likely be attempted this time next year in a 4.5b Budget.