Govt data tells us the size of bigger Crown debt but Sepuloni is silent about how welfare spending might further lift it

A familiar refrain was warbled among the latest posts on The Beehive website this morning.  It was posted in the name of Finance Minister Grant Robertson, who said the resilience of the economy continues to be reflected in the Government’s financial accounts and puts the country in a strong position to respond to the ongoing pandemic.

But at Point of Order, we have become conditioned to expect Robertson will chirrup about the economy’s resilience each time the financial statements are published, which is regularly.

We were looking out for news of big or dubious spending by a government which (according to the Crown accounts) has lifted the net core Crown debt to 36.8 per cent of GDP.

We are unable to tell if we found such news in a social welfare spending announcement under the heading Government Provides Stability for Whānau Self Isolating. 

The statement said the Government is providing additional support for people and families who must self-isolate, helping them to access the services they need as Omicron cases start to ramp up and more New Zealanders are affected by the virus.

 “The Care in the Community welfare approach is already responding effectively to meet the needs of people and whānau while in self-isolation. Today’s boost will help provide stability and continuity for them and their whānau, as well as social service organisations and community providers working hard to serve their community.”

But the cost – estimated or otherwise – was frustratingly missing.

For many people, the best Beehive news was that Foreign Affairs Minister Nanaia Mahuta departs for Europe this weekend to represent New Zealand at the Indo-Pacific Forum in Paris, to undertake a bilateral visit to the United Kingdom, and to participate in the United Nations Human Rights Council in Geneva.

“This trip is an important step in reconnecting New Zealand to the world, and an opportunity to present our values and interests to key partners as we move forward in a post-COVID world,” Nanaia Mahuta said.

One of the great benefits is that Mahuta’s travels should divert her attentions from Three Waters, albeit for a too-brief while.

Then there was the somewhat self-serving release of a report ordered by Health Minister Andrew Little into a programme supposed to make sure public hospitals have enough nurses to run safely.  This (he crowed) shows why the health system must be overhauled.

Little says he agrees with the report’s criticism of a lack of national workforce planning.

“Under the reformed health system, the 20 DHBs will be replaced in July by a single national agency, Health New Zealand, which will be better able to plan for and manage the nursing workforce right across the country,” Andrew Little said.

“It is critically important that we fix the nursing shortage for the sake of our overworked nurses and to ensure the safety of patients and our health reforms will make nationwide work force planning much easier as well as ensuring greater accountably” [sic}.

Overhauling the health system is one thing, of course.  Overhauling it as prescribed by Little – creating one health authority for the whole country and another for Maori – is another.

Among other statements:

• Transport Minister Michael Wood and Climate Change Minister James Shaw welcomed the passing of the Land Transport (Clean Vehicles) Amendment legislation, which aims to give people greater access to cheaper electric and climate-friendly cars.

• Judge Laurie Newhook has begun a three-year appointment as Chief Freshwater Commissioner for the Freshwater Planning Process.

The latest government financial statements show what was doing in the Crown accounts at 31 December 2021, half-way through the 2021/22 fiscal year.

Core Crown revenue of $55,2 billion was 13.6% higher than the $48.6 billion collected at 31 December 2020 but Core Crown expenses of $62.9 billion were 20.4% higher.

Covid-19 has done much of the mischief:  the variance was largely related to wage subsidy payments being $3.5 billion higher than last year, Covid-19 resurgence support payments being $2.6 billion higher than last year and increased expenses in health and tertiary education being $2 billion higher and $1.9 billion higher than the previous  year, respectively.

Accordingly the government must borrow to pay the bills.

Net core Crown debt was $21.9 billion higher than at December 31 the previous year while (as a share of the economy) it increased to 36.8% of GDP (up from 32.6% a year earlier). This increase reflects increased spending, in part due to Covid-19 fiscal support measures introduced following the Delta outbreak, resulting in accumulated cash deficits of $21.4 billion since December 2020.

Gross debt was $117.6 billion (34.2% of GDP), which was $1.7 billion higher than forecast, and total borrowings of $196.2 billion were $6.8 billion (3.6%) higher than forecast.

Total liabilities at $318.6 billion were $8.9 billion higher than forecast.

The fiscal impacts on the Government’s accounts of the Omicron outbreaks early this year are not captured in the latest figures because they reflect the results for the six months to 31 December 2021.

Nor can we gauge the fiscal impact of an announcement today by Social Development and Employment Minister Carmel Sepuloni because her press statement omits the costs.

What we are told is that the government will be providing 197 extra Community Connectors to help families in need who are isolating to access support and extra support for foodbanks to assist those most in need

Sepuloni did sprinkle a few numbers through the statement:

In recent weeks there has been an increase of more than 60 per cent in people with no existing Ministry of Social Development relationship needing welfare support.

At 6 February, the ministry had received 7,911 referrals under the Care in the Community welfare support response.

The ministry was supporting 1,823 of those referrals because they were still within their self-isolation period.  With more cases every day, the number of families needing support will only increase.

The additional 197 Community Connectors will bring the total to 500.

The need for food accounts for 67 per cent of all hardship grants.

Around 150 social service organisations and 225 food banks and community food organisations are providing support to people and families.

But there was nothing with a dollar sign to give us an idea of the cost.

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