Budget 2023: More classrooms expected in Government announcement as Labour prepares for this week’s big reveal

The Government will today reveal further investment in building more classrooms in its last set piece ahead of this week’s big Budget Day reveal, the Herald understands.

Prime Minister Chris Hipkins and Education Minister Jan Tinetti are expected to make the announcement at a Wellington school this morning, and it is understood to add to the more than 2700 new classrooms funded since 2017.

It is expected to be the final pre-Budget announcement ahead of Thursday, when Finance Minister Grant Robertson will reveal how he plans to balance cost of living pressures, avoid exacerbating inflation and pay a potentially $14.5 billion bill for Cyclone Gabrielle and flooding recovery - with a general election just five months away.

Hipkins and Labour will be hoping the Budget reinforces recent polls suggesting a Labour/Greens/Te Pāti Māori Government is a likely outcome.

Despite two polls in the last five days showing its support had dipped, last night’s Newshub Reid Research poll found Labour (35.9 per cent) was just ahead of National (35.3 per cent) and Te Pāti Māori was in the kingmaker position.

If Te Pāti Māori (polling at 3.5 per cent) won an electorate, it could form a 61-seat coalition Government with Labour and the Greens, while National and Act could only muster 59 seats according to the poll, following National last week ruling out working with Te Pāti Māori.

Te Pāti Māori leaders Rawiri Waititi and Debbie Ngarewa-Packer could be in the kingmaker position come the election, according to recent polls. Photo / Marty Melville

Hipkins, Robertson and an array of other ministers and local MPs yesterday unveiled almost $1b in cyclone recovery, including $475 million to rebuild road and rail links, about $100m to raise stopbanks and shore up flood protection assets and $35.4m to support the wellbeing of farmers, growers and stock in cyclone-damaged areas.

“Cyclone recovery is a core focus of this year’s Budget, and today’s package adds to the $890 million already provided in a rolling maul of repair works and business support,” Hipkins said.

A central feature of yesterday’s package was education, with $116m to repair or rebuild the more than 500 schools damaged by the severe weather events that hit the North Island this year.

This, on top of today’s expected announcement, added to Labour’s $106m plan to reduce class sizes for Year 4-8 students as the party seeks to win points in a sector considered to be a key election battleground by former Education Minister Hipkins.

In March, National unveiled a “back to basics” education policy that included primary and intermediate schools being required to teach students for at least one hour a day on each of the topics of reading, writing and maths, with children being tested on them at least twice a year in a new version of the controversial National Standards.

While important, education would likely take a back seat in the Budget to measures addressing the high cost of living and servicing the sizeable cost of Cyclone Gabrielle and the Auckland floods.

Finance Minister and Cyclone Recovery Minister Grant Robertson alongside Prime Minister Chris Hipkins (right) and an array of other ministers and MPs in Hawke's Bay making a funding announcement. Photo / Warren Buckland

In a pre-Budget speech to the Wellington Chamber of Commerce last week, Robertson announced $4b of savings had been found to top up the 2023 Budget following his warning to ministers to trim spending if they wanted to progress new initiatives.

“The outcome of this exercise is that Budget 2023 will include $4 billion of savings and reprioritisations over the four-year forecast period,” he said.

Robertson said the cost of the cyclone recovery would be funded from existing spending and borrowing, rather than raising new taxes, something Hipkins had ruled out. He said this meant some ministers missing out on funding for pet projects in order to fund the recovery.

In another pre-Budget speech to some members of Auckland’s business community last week, Robertson signalled the “hard calls” that must be made by “central government, by local government, commercial businesses, communities, banks and insurance companies” as the Government prepares to tackle a bill of between $9b and $14.5b, according to Treasury’s most recent estimates.

During the funding announcement in Hawke’s Bay yesterday, Robertson acknowledged decisions were yet to be made regarding land use in cyclone and flood-damaged areas.

Robertson, also the Cyclone Recovery Minister, has repeatedly stressed the need for such decisions to be “locally led” and done following consultation with impacted communities.

Questions remain unanswered regarding whether some communities will ever be able to rebuild. Photo / Neil Reid

The timeline for that consultation had been delayed several times, but was expected to begin on May 31 with communities that were the least affected and most likely to be able to rebuild.

In areas that might be deemed unliveable, communities would have to wait until later in June.

National leader Christopher Luxon and Act leader David Seymour both welcomed yesterday’s investment but referenced those unanswered questions in their criticism of the Government’s pace of decision-making.

“I think if you’re a homeowner or a business owner, you want real clarity about your future land use, and I don’t see anything there for that,” Luxon said.

Seymour said: “It’s taken them three months to announce a lot of obvious things, like they’ll have to fix roads.”

“People I visited in Hawke’s Bay as recently as three weeks ago were still waiting for even basic decisions around flood protection.”