The govt’s $7.5bn surplus – how Sepuloni could have made it bigger, only for the DHBs to stick their hands out for more

Two press statements from the National Party side of Parliament help to illuminate the magnitude of a $7.5 billion budget surplus.

The surplus was announced by Finance Minister Grant Robertson in a statement headed Government accounts show strong economy.

The Crown accounts for the year to June 2019 show a $7.5 billion surplus. This is due to the stronger economy, and also includes a number of one-off factors including revaluation of the country’s rail assets.

Net debt has fallen further to sit at 19.2% of GDP, down from 19.9% a year ago and below the 20% target in the Budget Responsibility Rules.

Robertson went on to say the accounts show he and his government have the balance right.

“We are tackling long-term challenges by investing in hospitals, schools and transport infrastructure while managing the books responsibly. We are making our economy stronger to make sure we remain resilient and have room to move to support New Zealand through any further challenges ahead.”

But could the surplus have been bigger, thereby enabling the government to consider the tax cuts favoured by political its opponents or greater social spending of the sort favoured by its supporters?

We ask because National banged out a statement headed A billion dollars overpaid to beneficiaries.

In this, Opposition leader Simon Bridges demanded an explanation from Social Development Minister Carmel Sepuloni about how she let her department dish out a billion dollars in overpayments to beneficiaries.

 “Figures from MSD show overpayments to beneficiaries in the last financial year ballooned to $1 billion, $251 million more than National’s last year in government, the highest amount ever. 

“An increase of a quarter of a billion dollars isn’t just a simple mistake, it’s blatant incompetence from a Minister that doesn’t have control of her department.”

Bridges rubbed it in by claiming that, under the Minister’s watch there are 15,500 more people on the dole, there are fewer sanctions for people who don’t follow the basic requirement that go with receiving taxpayers money and there is millions more being paid out in emergency grants as the cost of living soars under this Government.

“Ms Sepuloni needs to explain why overpayments have shot up by so much, and how that’s going to be fixed.”

The press statement was based on answers to written question detailing overpayments (which can be read HERE).

The obvious implication is that the government should have a surplus of $8.5 billion.

But whoa.   Another National press statement is headed DHB deficits out of control, health services at risk.

This draws attention to a billion dollars of district health board deficits.

Health Minister David Clark has let DHB deficits blow out to a billion dollars putting the sustainability of New Zealand’s health services in crisis, National’s Health spokesperson Michael Woodhouse says.

“National has been predicting this colossal increase in DHB deficits since January. This was entirely foreseeable and Dr Clark should have taken steps to avoid it rather than let DHBs get into such a precarious financial situation.

“Instead, deficits have been rapidly increasing over the past year and health services are in crisis. Dr Clark has let deficits balloon to record highs because the Government has neither provided the funding they claimed they would nor set expectations for continued fiscal discipline.”

Woodhouse’s purpose plainly was to highlight increased hospital wait times, a measles outbreak as the Government has let vaccine stocks run low, scrapped health targets and delayed elective surgeries.

The fiscal policy implication, however, is that the budget surplus would be little different  if Sepuloni had kept a firmer grip on payments to beneficiaries.  Robertson would have been under pressure – for starters – to shovel the billion bucks she should have saved in the DHBs’ direction.

One thought on “The govt’s $7.5bn surplus – how Sepuloni could have made it bigger, only for the DHBs to stick their hands out for more

  1. You have, like CoL, overlooked the Kiwibuild component. How much are taxpayers indebted, and where has the money been borrowed for this political demonstration of failure?
    Along with the revalued railways, there is a strong smell of distortion and creative accountancy.


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