Robertson seeks further cuts to existing spending after finding $700M to reallocate
By Paul McBeth
May 1 (BusinessDesk) - Finance Minister Grant Robertson is putting existing spending under the microscope to ensure the Labour-led government can meet its commitments after finding $700 million of planned spending to reallocate.
Robertson is scheduled to deliver his first budget on May 17, which he today described as rebuilding critical public services with boosts in capital and operating funding for health and education, housing initiatives spearheaded by the KiwiBuildi programme, and increased support for families.
He reiterated his commitment to the Budget Responsibility Rules that seek to reduce net Crown debt to 20 percent of gross domestic product by 2022, saying the budget will deliver a surplus and "show that we can both meet the rules and make the investments needed to rebuild the foundations of our critical public services and to start the transformation into a modern, productive economy."
That's underpinned by the slower debt repayment track than the previous administration, a bigger tax take than forecasts, and increased government revenue from a more aggressive pursuit of tax dodging. That includes an announcement later today which has been reported as the introduction of GST on low-value goods purchased overseas.
Robertson has also dumped schemes from the previous government that didn't align with the new administration's policies, haven't happened or didn't generate value for money which has freed up $700 million of funding over the next four years.
"Combined with our moves to crack down on speculators, tax dodgers and ensuring multi-nationals pay their fair share of tax, we have freed up $1.4 billion worth of funding for this government's priorities over the next four years," he said. "Our priorities are different to the previous government - and we have been responsible by making sure we have created the room to make the critical investments we need to while maintaining New Zealand's resilience to any future shocks that may hit us."
Robertson wants ministers to keep going through their budgets to identify policies that don't fit with the government's priorities "to ensure we are getting the best value for money from the investments the government makes on behalf of all New Zealanders".
The speech, to a Westpac New Zealand hosted breakfast in Auckland, is the first major pre-budget speech this week, with Prime Minister Jacinda Ardern set to speak to a BusinessNZ audience in Wellington on Thursday.
The government has signalled the need to reprioritise some spending initiatives after finding what it's called "underfunding" of the public services than anticipated, including the phasing in of cheaper GP visits.
Robertson today said every investment announced in the lead up to and on budget day will be "fully accounted for within the operating and capital allowances" set by the Budget Responsibility Rules, to ensure the Crown's books are strong enough to withstand any external shocks and to lay the foundation for an "economic and social transformation" aimed at lifting the living standards of New Zealanders.
He also foreshadowed spending commitments on rebuilding the Ministry of Foreign Affairs and Trade's capability, to improve its ability to promote trade, ensure New Zealand is heard on the international stage, and support its Pacific neighbours. The Green Investment Fund, which was part of Labour's confidence and supply deal with the Green Party, will also feature in the budget, he said.