Grant Robertson: Budget 2019 Economic Priorities

Minister of Finance Grant Robertson outlined economic priorities for the 2019 budget, due next week, in a speech to the Craigs Investors Conference yesterday.

He is pushing the ‘wellbeing’ focus, mentioning it 15 times in his speech overall.


Budget 2019 Economic Priorities

In next week’s budget you will see investments to support our economic strategy.

This year’s Budget is different. There are three fundamental elements to the Wellbeing Budget.

First, a whole-of-government approach. This is about stepping out of the silos of agencies and working together to assess, develop and implement initiatives to improve wellbeing.

Secondly, a wellbeing approach means looking at intergenerational outcomes. We have to focus on the long-term thinking about the impacts of policy on future generations as well as thinking about meeting the needs of the present.

Thirdly, we need to move beyond narrow measures of success. This can be seen through the development of the Living Standards Framework Dashboard and from the Indicators Aotearoa New Zealand work led by Statistics New Zealand.

We have developed our Budget priorities on the basis of a wellbeing analysis. We looked at the evidence and got expert advice to assess where we have the greatest opportunities to make a difference to New Zealanders’ wellbeing. We have focused our efforts on those opportunities.

This approach has led to some significant and different programmes, like the $320 million investment announced last weekend to address domestic and sexual violence. This is the wellbeing approach in action. The evidence shows the long-term impact that domestic violence has, especially on children. We are taking a joined-up government response to start addressing this long term challenge. We have brought together eight government agencies, working with the community to take on this scourge that has such massive social and economic consequences.

From an economic perspective, our wellbeing analysis showed that we have some way to go in achieving our vision of a productive, sustainable and inclusive economy.

Productivity growth is a key driver of incomes both at a household and country level. Despite working longer hours on average than workers in many developed countries, New Zealanders’ incomes have for some time remains in the bottom half of the OECD.

In addition, the Government has set ambitious greenhouse gas reduction targets to meet the 2015 Paris Agreement goal of keeping temperature rise to no more than 1.5 degrees.

As a result, two of the priorities in this year’s budget are:

• Creating opportunities for productive businesses, regions, iwi and others to transition to a sustainable and low-emissions economy; and

• Supporting a thriving nation in the digital age through innovation, social and economic opportunities.

Come Budget day you will see targeted investments in these areas to support more productive, sustainable and inclusive economic growth.

Fiscal sustainability

Of course, fiscal sustainability is an inherent part of maintaining and improving intergenerational wellbeing and a sustainable economy.

That’s why this Government made a commitment to our Budget Responsibility Rules when we came into office.

These include:

Delivering a sustainable operating surplus across the economic cycle. The key word here is sustainable.

That means our surpluses will exist after we have funded our policy objectives, so that issues are not kicked further down the road for the next government or generation to deal with, as I discovered after coming into my role as Finance Minister.

We are, reducing the level of net core Crown debt to 20 percent of GDP within five years of taking office. New Zealand has low levels of Government debt by international standards, but we remain vulnerable to shocks that are beyond our control, such as earthquakes and other natural disasters. We have made our commitment to keeping debt under control to ensure that future generations of New Zealanders are in a position to be able to respond effectively to any such shock.

Thirdly, this Government will prioritise investments to address the long-term financial and sustainability challenges facing New Zealand. This is apparent in the intergenerational wellbeing priorities we have identified in this year’s budget and restarting contributions to the NZ superfund and our focus on issues such as climate change.

Fourthly, we will maintain Government expenditure within the recent historical range of spending to GDP, which has averaged around 30 percent over the past 20 years. We are also focussed on the quality of spending, with Ministers running prioritisation exercises across their portfolios to identify spending that doesn’t fit with the Coalition Government’s priorities.

I am pleased to announce today that on the 30th of May the Budget will show that we are meeting these rules again, as we did in last year’s budget.

Our Budget Priorities are focussed on the outcomes New Zealanders want to achieve and all Ministers and agencies will be collectively accountable for delivering them. And in their delivery, this Government will follow a disciplined fiscal strategy. The strategy gives the balance to be both a responsible manager of public finances and responsive to New Zealand’s intergenerational wellbeing needs.

We’ve prioritised spending that improves the wellbeing of all New Zealanders. This means tackling the big long-term issues, by investing in an economy that is more productive, sustainable and inclusive.

Come Budget day you will be able to see that this is not simply the same old Budget repackaged with softer edges and brighter colours. You will see a Budget that is new, with a more structured approach and a new, explicit emphasis on what we want to achieve for the long term for our country.

 

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