Budget 2023 – a slew of press statements and an improvement in the Treasury’s fiscal outlook

Buzz from the Beehive

It’s the no-frills budget (says Labour) or the blowout budget (says National).

But let’s bypass much of the slew of information released today and turn to the Treasury’s Budget and Economic Fiscal Update, which says the Government’s fiscal outlook is expected to improve over the forecast period (which covers the next four years).

The key numbers:

• Core Crown revenue in 2023/23 is projected to be $134.5bn in the next fiscal year (up from $126.7bn in 2022/23);
• Core Crown tax revenue will be $123.2bn (up from $115.3bn);
• Core Crown expenses will be $137.0bn (up from $128.2bn);
• Total Crown OBEGAL will be -$7.6bn  (worsening from -$7.0bn);
• Total Crown operating balance will be -$1.4 bn (worsening from +$4.2bn);
• Core Crown residual cash will be -$26.9bn  (worsening from -$22.4bn);
• Net debt will be $91.2bn (worsening from $71.0bn);
• Net worth will be $177.9bn (down from $179bn).

Finance Minister is coy about costs of trains for lower North Island while Health Minister may hope to bamboozle Buller people

Buzz from the Beehive

Our hard-working big-spending ministers have added to the list of announcements which make demands on the public purse, since Point of Order last checked the government’s official website.

But a statement released in the names of Finance Minister Grant Robertson and Transport Minister Michael Wood is astonishingly bereft of hard data related to the costs of the initiative that enthuses them.

They announced a boost for rail travel in the Wairarapa and Lower North island in the form of a fleet of 18 “brand-new trains”.

But the only hint that developments like this cost money is in the very last paragraph:

“Since 2017, the Government has invested $8.6 billion to build a resilient and reliable network after decades of neglect and decline. This investment has gone into the bread and butter work of replacing tracks, installing new culverts and bridges, and upgrading turnouts, all of which are needed for a safe and effective network,” Michael Wood said

The other new statement, from Health Minister Ayesha Verrall, is more upfront about the cost of a new integrated health facility which she has officially opened for the Buller community.

Hipkins shows his quality as PM in securing a bounce for Labour, but now comes the hard part

Chris  Hipkins has surprised even  some of his  closest  friends  and  backers with the  bounce he has  secured  for Labour  in  public polls  since  he  became Prime Minister. He  has  been put to the test since  he  took  over  from Jacinda  Ardern  in the  top job, and has  shown a  quality that  was  well hidden in  his  previous  portfolios.

It’s  not  just the long  hours  he is  putting into  the  job, but  projecting the human touch  to those  hard hit by Cyclone Gabrielle, or the other disasters of recent weeks as well. Then this week he  was steering the  government in decisions which, as  he  said, will  enable pensioners to start seeing a bit extra in their bank accounts from next month.

For couples over 65, their superannuation payments will now be higher by an extra $102.84 per fortnight between them, while single people living alone will receive an extra $66.86 each payment.

Hipkins  said the package of “bread and butter support” would help people who were “really feeling the bite from the rise in the cost of living”.

Winston Peters shows he is in good form as he belts Grant Robertson all over the paddock in his latest innings

New Zealanders – particularly those in the North  Island – may have been so preoccupied  with other events they may not have noticed it is  election year.

Still, this  week  it may well have come to their attention when Winston Peters  fired a  volley at  the  government.

Few  politicians  can hit the target so unerringly as Peters  does. Almost certainly,  a refreshed Peters, despite his  age, will be a  force to be reckoned with, once again, at the helm of  NZ First.

National’s Christopher Luxon could take some lessons from the old master in how to  deliver some powerful blows  on the  government.

Buzz from the Beehive – it’s all about the Budget and billions being disbursed to buck us up in the wellbeing department

No, we haven’t fully analysed Budget 2022, but we did listen to Finance Minister Grant Robertson’s speech.

He took great pride in announcing his fifth Budget invests $5.9 billion a year in net new operating spending, while introducing multi-year funding packages that also draw from Budget 2023 and Budget 2024 operating allowances.

The government is investing $2.9 billion from the Climate Emergency Response Fund to meet its Emissions Reduction Plan and lay the foundations for the long-term transition to a low-emissions, high-wage economy.

And it is supporting New Zealanders “to meet the rising cost of living caused by global inflation pressures” through a targeted package of support focusing on low- and middle-income New Zealanders, including a short-term Cost of Living Payment for around 2.1 million people.

Interesting language.  He talks of problems caused by “global” inflation pressures.

Perhaps we missed the money he is providing to help us meet the rising cost of living caused by domestic inflation pressures.

Labour is giving opposition politicians plenty of issues to exploit as it is stalled by ‘an end-of-year fug’

If  it’s  true  that Labour’s great run is  now  ending,  Opposition parties  should  be vibrating  with  new-found  confidence.

This  may be the   case   with  ACT,  but  so far  there has  been  little sign of  it in National.  In fact   judging  by  the  volume of  speculation  about  National’s leadership  among  the  political  cognoscenti  in  the  weekend  media, the  inner  circle of  the party is stressed  out over  its  leadership.

A  party on top of  its  game certainly would  be  scoring  some   big  hits. On the  other  hand  it  may  be  argued that  the  preoccupation with  Covid has stifled interest  in other political  issues.

Still, as  economic uncertainty  deepens, and  managing the  Covid  Delta  variant  exposes the  government’s vulnerability, the   country  is  looking   again for  something  different,  if only  to  measure  accurately how  the government is  performing.

Beyond  the  leadership issue, the  problem   for  National   is  that it  does  not speak  to  all  elements  of  its  base. It  appears  singularly  out of  tune with  the  regions  and particularly   with  farmers, who are  facing  vocal  lobby groups campaigning  against  what they call  “dirty  dairying”—  never  mind  it is dairy export earnings  that  are sustaining the country’s  balance of payments.

Treasury throws light on the Govt’s balancing trick while Jones tries to tip the scales in his favour

Latest from the Beehive

While Shane Jones, Minister of Munificence, was splashing more millions into his Northland home patch, Finance Minister Grant Robertson was preparing to release Budget documents which (he tells us)  highlight the Government’s strong focus on keeping the balance between responding to COVID-19 and careful economic management.

The documents account for  Budget 2020 and COVID-19 Response and Recovery Fund decisions and COVID Fund decisions agreed at Cabinet on 6 July.

Most of the numbers in the Beehive press statement are in millions of dollars but a smaller one without any monetary value invited our curiosity.

Robertson observed:

“We have invested significant resources into supporting New Zealand businesses and workers, and cushioning the blow of this 1-in-100 year economic shock.”

Where (we wonder) does one in 100 come from?

Fair to say, one in 100 is far below the level of electoral support showing for Jones, according to the only polling we are aware of in Northland.

One new trough to hasten housing development and another to equip houses (but only some) with renewable energy

Latest from the Beehive – We had just finished digesting an outpouring of announcements from the Beehive over the previous 24 hours or so when the Point of Order Trough Monitor shrieked an alert.  A new trough had been established.

While we were inspecting the contents of this new trough, another warning was sounded and yes, another trough had been announced.

One of the new troughs is providing $28 million over four years to enable the installation of renewable technology, such as solar panels and batteries, on public and Māori housing.

This financial year $4 million of funding will be available, ramping up to $10 million in the 2023/2024 financial year.

But a question is raised about eligibility:  does “public and Maori housing” mean that privately owned non-Maori housing won’t get a look-in?

If you miss out on one trough, of course, you can always try lining up at another.

The Govt’s books won’t be affected (at least, not directly) by a new ambassadorial job to promote reading

Latest from the Beehive –

The public debt is among the victims of the Covid-19 epidemic. According to the 2020 Budget Economic and Fiscal Update, in the current year and the next two fiscal years, operating deficits (operating balance before gains and losses) average around $28 billion while net core Crown debt is expected to increase on average by around $35 billion a year. Net core Crown debt is expected to reach 53.6% of GDP by the end of the forecast period, in June 2024.

The government – accordingly – is being very careful about its spending.  Isn’t it?

Sure it is,  and at first blush neither taxpayers nor lenders will have to pay for an initiative announced today by the PM and Tracey Martin, Minister for Internal Affairs and for Children.

At Point of Order, we were more than a tad surprised by this  announcement, although – to be fair – it did involve employment opportunities.

One part-time job opportunity, to be more specific.  A new job, New Zealand Reading Ambassador for children and young people, is being established.

We must confess we had not been among those who had been pressing for this vital post to be established.  Come to think of it, we weren’t aware anyone else had been pressing for it.

The PGF trough managers (we learn) have their own events centre – and some lucky people were invited to watch Winston in action

Take a note of this email address, dear reader. The right approach to Events <PGFEvents@mbie.govt.nz> could result in your being invited to an occasion where Winston Peters, Shane Jones, Fletcher Tabuteau or one of their esteemed and oh-so-generous colleagues announces another handout from the Provincial Growth Fund.

Who knew it? The PGF management bunch have their own Events Centre for organising this sort of thing.

Our attention- and that of the Point of Order Trough Monitor – was drawn to it by a reader who (presumably) had been invited to join the Deputy Prime Minister, Winston Peters

“ … at an event where Investment announcements will be made for the [Bay of Plenty} region”.

The recipient was asked to please arrive at the Opotiki Golf Club at 11am for a prompt 11.20am start.

Peters did not disappoint.  He came to town with a $26 million investment in Ōpōtiki to upgrade important public amenities and fund further progress on new aquaculture opportunities.