Kiwibuild not affected by the budget

There were comments about the omission of Kiwibuild from budget announcements

Newstalk ZB: No money for flagship housing policy KiwiBuild in the Budget

There have been plenty of winners in today’s Budget, but one of the big losers has been the housing portfolio.

Apart from $283 million for transitional housing, and $197 million to boost emergency housing, there’s not much in budget 2019.

One thing in particular stands out is the Government’s flagship housing policy KiwiBuild, which has not received any additional funding.

@HenryCooke explains:

I don’t understand why people are writing about KiwiBuild not getting any new money like it is interesting. it wouldn’t have got any even if the policy was going well. the $2b envelope has been fairly firm and its problems are NOT down to a lack of cash.

Maybe you could make the argument whatever comes out of the reset will require new cash, but two billion dollars is a lot of effing money.

If anything the Budget shows Kiwibuild’s one great success so far – because the money ain’t being spent it is making the short term surplus bigger.

Stuff: Govt made right call in leaving floundering KiwiBuild out of the Budget

Fixing New Zealand’s housing affordability crisis was one of Labour’s key policy goals going into the last two elections.

But KiwiBuild has been conspicuously absent from the Government’s vocabulary in recent months, and yesterday’s Budget was no different.

The Government might not have given up trying to improve housing affordability, but it seems to have realised that KiwiBuild is not the answer to the problem.

The bulk of the additional $90 million per year allocated to Housing and Urban Development in the Budget will go towards emergency and transitional housing. It’s not sensible to throw good money after bad, so the silence on KiwiBuild is welcome.

But:

Minister Phil Twyford is not short of cash to use for KiwiBuild’s supposed “recalibration” anyway. Just 101 KiwiBuild homes have been completed – and the majority of those had already been financed by developers and were under construction before Twyford put a KiwiBuild sticker on them.

So it’s not like the Government has used much of the $2 billion of capital set aside for the programme. Even by July 2020, the Government only expects to have completed 1535 homes, which is woefully short of its initial target.

The fact that more than 10 per cent of the small number of completed KiwiBuild homes have failed to sell reiterates the policy’s poor design.

Kiwibuild was not a problem in this budget, it has been a problem since it was conceived.

A pretty good budget

I despair about the circus leading up to and surrounding yesterday’s budget. Media even investigated the person on the cover photo of the printed budget in a bizarre sideshow. And there were a number of ‘what’s in it for you’ angles, despite lolly scramble budgets largely being very historic,

But for what really mattered, I think that yesterday’s budget was pretty good, delivered by someone who increasingly looks like a pretty good Minister of Finance, Grant Robertson.

A significant boost to mental health related initiatives is long overdue, and very good to see,

Indexing benefits to wages is also a long overdue fix to the erosion of benefit value over the years.

There’s a bunch of other stuff that can be praised or quibbled about, but generally it seems ok to me.

There is always a limit to how much a Government can spend of our money, and there’s a limit to tolerance of how much we are taxed. Robertson and the Government seems to me to have found a fairly good balance. They will never please all of the people all of the time, but I don’t think there’s much to be worried about.

Budget today

It is budget day in Parliament. I don’t see any point in saying much until we know what is in it.

Police say that budget leaks not unlawful

Police have conformed what has been widely claimed already about the budget leak – they say the information was obtained by ‘exploiting a bug’.  What? Online viruses exploit bugs, but that doesn’t make them lawful.

Whatever the law says on this, questions about the ethics of National publicising the material they obtained remain. As has been pointed out, they could have highlighted the flaws in information security without abusing the budget process.

Stuff:  Budget leaks ‘not unlawful’, no further police action

In a statement ahead of Thursday’s budget and an expected press conference from the National Party where leader Simon Bridges was to explain how he got his hands on budget information early this week, the Treasury said that police had advised that “an unknown person or persons appear to have exploited a feature in the website search tool” – but that this “does not appear to be unlawful”.

Police are therefore not planning further action, but the State Services Commission will undertake an inquiry into the issue.

The Treasury said it and and the GCSB’s National Cyber Security Centre has been working on establishing the facts.

“As part of its preparation for Budget 2019, the Treasury developed a clone of its website. Budget information was added to the clone website as and when each Budget document was finalised,” it said in a statement.

“On Budget Day, the Treasury intended to swap the clone website to the live website so that the Budget 2019 information was available online. The clone website was not publically accessible.

“As part of the search function on the website, content is indexed to make the search faster. Search results can be presented with the text in the document that surrounds the search phrase.

“The clone also copies all settings for the website including where the index resides. This led to the index on the live site also containing entries for content that was published only on the clone site.

“As a result, a specifically-worded search would be able to surface small amounts of content from the 2019/20 Estimates documents.

“A large number (approx. 2000) of search terms were placed into the search bar looking for specific information on the 2019 Budget.

“The searches used phrases from the 2018 Budget that were followed by the ‘Summary’ of each Vote. This would return a few sentences – that included the headlines for each Vote paper – but the search would not return the whole document.

“At no point were any full 2019/20 documents accessible outside of the Treasury network.”

The Treasury said the evidence shows “deliberate, systematic and persistent searching of a website that was clearly not intended to be public”.

So there seem to be problems that need resolving.

But what about what National did with the information they obtained?

Lawyer Stephen Price yesterday – Budget leak: Nats’ behaviour “entirely appropriate”?

I’ve just been listening to Simon Bridges’ press conference at Parliament about the budget leak. His main point was to deny that the leaked budget material was a result of a hack. But he made the broader claim that the Nats’ behaviour throughout was “entirely appropriate”. He said there had been “nothing illegal or anything approaching that from the National Party.” He denied that their conduct was at any point unlawful.

I think he’s wrong. I think the Nats have probably engaged in  unlawful behaviour from the get-go. That’s regardless of whether the budget material they released was hacked. The Nats have broken the law relating to Breach of Confidence.

That’s not a crime. It’s a civil claim, like defamation or negligence. But it is the law.

If information is confidential in nature – that is, not in the public domain – and was created and shared in circumstances in which those possessing it knew is was supposed to be confidential, and was then disclosed without permission, that’s a breach of confidence. That obligation of confidence will usually bind anyone else who comes into possession of the information.

There is a public interest defence. That’s what usually protects the media when they receive leaks. Otherwise, as you might have noticed, almost all leaks to the media (especially from employees with clear obligations of confidentiality) fall foul of this law. But usually, there will be some substantial justification the media can use. They will be able to point to some significant way the public is being served by the release of the information that would otherwise be protected by the obligation of confidence.

Is there public interest here? I can’t see it. The information was to be publicly released in two days. The National Party could freely criticise it then. How are the public really made better off by learning of these criticisms two days in advance? Is there really any benefit to a matter of legitimate public concern that overrides the obvious – and perhaps even constitutional – confidentiality that attaches to budget papers?

Nor can National argue that it needed to release the information to hold the government to account for its bungling in allowing the leak. It could have made that case without actually releasing the data.

I think there is a better argument that it was against the public interest for National to have publicised the budget information they obtained.

What could National argue? The best I can come up with is: “We felt it was in the public interest to prick the balloon of spin that the government was floating about the budget being a ‘wellbeing’ budget, and itself revealing bits of it in advance, by providing the public with information that revealed these claims to be misleading. In this we were fulfilling our constitutional duty to hold the government to account. And we didn’t release any market sensitive information.”

I don’t think that works. They could make those arguments in two days time and the public would be no worse off. I also note that it turns on the accuracy of the criticism. If the numbers are wrong, or taken out of context, or do not really reveal any misleading government behaviour, that would undermine any attempt to say that the releases were in the public interest. Finally, the fact that the National Party was drip-feeding the leaks tells against any claim that the public needed to have the information urgently and couldn’t wait two days for the budget.

Treasury has been embarrassed by the leak of budget information, whether it was obtained legally or not.

I think that National could have acted with integrity in pointing out the flaw, but they went much further than this by playing politics – they acted on heir own interests rather than public interests. Except that if the public doesn’t like the way they have done things it may not be in their own interests.

I don’t think it enhances Simon Bridges’ leadership credentials. If he wanted to prove himself as a responsible leader he would have highlighted the bug without exploiting it for some short term (two day) political gain.

 

 

 

Treasury refer claimed hacking to police following budget leak

The budget leak publicised by National yesterday has got a lot murkier, with Treasury now saying they have been hacked. The matter has been referred to the police, but Leader of the Opposition Simon Bridges is unrepentant for trying to hijack Thursday’s budget announcement.

The leak looks embarrassing for the Government, and also for Treasury, but I think the leak stunt also reflects very poorly on Bridges and National. Bridges has demanded that Minister of Finance Grant Robertson resign over the leak.

1 News: Budget 2019 leaks by National came after Treasury was ‘deliberately and systematically hacked’

Earlier today the National Party leaked what it claimed were highly secretive details of the Government’s wellbeing Budget, due to be delivered on Thursday.

Treasury has confirmed in a statement it was the source of National’s Budget 2019 leaks today after its “systems were deliberately and systematically hacked”.

Confirming the hack this evening Treasury released the following statement:

“Following this morning’s media reports of a potential leak of Budget information, the Treasury has gathered sufficient evidence to indicate that its systems have been deliberately and systematically hacked.

“The Treasury has referred the matter to the Police on the advice of the National Cyber Security Centre.

“The Treasury takes the security of all the information it holds extremely seriously. It has taken immediate steps today to increase the security of all Budget-related information and will be undertaking a full review of information security processes.

“There is no evidence that any personal information held by the Treasury has been subject to this hacking.”

Responding to confirmation of the the hack, Finance Minister Grant Robertson said is a statement:

“This is extremely serious and is now a matter for the Police. We have contacted the National Party tonight to request that they do not release any further material, given that the Treasury said they have sufficient evidence that indicates the material is a result of a systematic hack and is now subject to a Police investigation.”

But Bridges continued on the attack:

If it turns out that budget documents were hacked from Treasury will Bridges resign for using hacked material to try to undermine the Government?

 

Budget leaked

National claims to have been leaked the budget ahead of it going public on Thursday. If National have obtained a copy, that’s bad. But it is also bad that they are making parts of it public.

I can’t remember a budget leak before this.

RNZ – Budget leak: Embarrassing error or conspiracy?

A major pre-Budget bomb has dropped on the Beehive with top level Budget information ending up in the hands of the National Party.

The Prime Minister’s regular media stand-up at Parliament this morning was ticking along with questions about mental health, funding for dentistry and the Debbie Francis report when the news broke – the timing was of course no coincidence.

Jacinda Ardern was blindsided and reporters had just enough time to digest the document released by National before heading to leader Simon Bridges’ regular Tuesday question and answer session.

“National reveals Budget details” screamed the headline on the media release.

With it was a document claiming to reveal the funding for 18 policy areas for the next financial year.

It spanned major portfolios including health, defence, overseas aid, customs, Maori development and justice.

“This is not the Wellbeing Budget it’s the Winston Budget”, declared Mr Bridges.

That’s a reference to Deputy Prime Minister and New Zealand First leader Winston and a $1.3 billion spend on defence assets in National’s documents.

But Mr Bridges was a lot more reticent when asked about how National had come across the information – “cock-up or conspiracy?” asked one reporter.

One possibility is that someone within the Government deliberately leaked the material to National.

Mr Bridges talked about a “loose and incompetent” government and would not go as far as calling it a leak, so that seems less likely.

More likely is that someone has been careless with the information and it has ended up with National through human error.

The Finance Minister Grant Robertson hastily convened a media conference where he said some of the figures were right, but some were wrong.

The “major new initiatives”, he said, were not in the National Party document.

The only specific comment he made was about the defence spending, confirming it does includes the purchase of Boeing P-8A Poseidon Aircraft, which had already been announced.

But other than that he refused to say which other parts were right or wrong, or even how much of it was accurate.

The hunt for who was responsible will only begin in earnest once the Budget has been delivered on Thursday, but Treasury is already investigating.

There is actually serious financial implications of part of budgets being leaked ahead of the official release date.

And it is a serious matter if the budget has been deliberately leaked to the Opposition.

Circus politics seems to be getting worse.

Reforming public finance beyond the ‘wellbeing budget’

The Government has been consulting with ‘a group of experts’ – including Michael Cullen – on a new approach to managing the government’s finances, which could have a massive impact on future budgets.

Newsroom:  Cullen consults on massive Budget shake up

Treasury has brought in former Finance Minister Michael Cullen to consult on government budgeting as it tries to shift the focus away from surpluses

Dubbed a “stewardship” approach, it aims to take a more long-term view of public finance. A paper released to Newsroom under the Official Information Act shows Treasury has already begun work on reforming the public finance beyond the ‘Wellbeing Budget’ which will be delivered on Thursday.

The briefing notes that the current public finance system is 30 years old and may not adequately serve the needs of today’s governments. It said that the current work on the Wellbeing Budget and the Living Standards Framework will “only take us so far”, and further work was needed to fix “underlying issues with our public finance settings”.

Treasury says the approach is about moving from a “management” to a “system stewardship” approach to the public finance system. This could involve further changes to the Public Finance Act, a piece of legislation drawn up in 1989 that forms the cornerstone of public finance in New Zealand.

Finance Minister Grant Robertson told Newsroom the Government was “certainly moving forward” with the ideas in the paper.

Treasury believes the public sector is “not working well for everyone”. It singles out struggles in responding to “complex needs and issues” as well as “longer-term opportunities and risks”. It lays the blame, in part, on “a range of underlying issues with our public finance settings”.

It says the current settings encourage “silos” and a short-term focus. These settings mean it can be difficult to move funding across several years when it makes sense.

The reporting requirements placed on the Government focus on “outputs not outcomes,” and it incentivises “compliance and risk aversion,” rather than “innovation”.

Treasury said the new approach would “support better collaboration”, and place “more emphasis on the long-term to support innovation, asset management and capacity-building”.

One change being discussed would substantially alter how baseline funding is appropriated. Currently, bids for cost pressure funding is bid for on an annual basis, which Treasury says is “resource intensive”. This could change to a multi-year “defined period” bid, which would be more flexible.

Government budgets should have medium and long term considerations. I don’t think this is particularly new – the Cullen Fund was designed as a long term  means of financing superannuation as the population grew older. And many budget items are for multiple years (four years is common).

Last September, Treasury officials met informally with a panel which included former Finance Minister Michael Cullen, former ACT candidate and ex-Treasury Secretary Graham Scott, Victoria University Professor Jonathan Boston, and former State Services Commissioner Iain Rennie.

The group urged caution before changing “what is internationally a very good public finance system”.

Speaking to Newsroom, Cullen said there was merit in looking at long-term risks so long as a balanced approach was taken.

“So long as focus on the long-term doesn’t become an excuse for doing stupid things in the short-term then there’s a great deal of sense in getting that long-term focus,” Cullen said.

He said long-term risks like the costs of super and health care, combined with unexpected risks like earthquakes meant a prudent approach should still be taken.

“We are a country which faces quite significant risks that will suddenly descend upon us. We don’t have the slightest clue they’re going to happen,” he said.

Jonathan Boston told Newsroom that moving away from a narrow focus on GDP as a measure of the economy was wise.

“GDP is a flow measure; it measures the value of goods and services but it doesn’t tell you what’s happening to income distribution and to other financial measures, more particularly it doesn’t tell you what’s happening to the stocks of capital in a society or your human capital stock,” Boston said.

Reassessing how budgeting is done is a good thing. We will have to wait and see whether changes that happen as a result of this consultation turn out to be a good thing – and that could take many years to determine.

 

$150m to help youth transition from state care

In another pre-budget announcement the Government is putting $150 million to help youth who don’t have family support to transition into work.

RNZ: $150m package to help youth transition from state care

Young people transitioning from state care to independence will no longer be cut off from Government support when they turn 18.

A $150 million dollar transition support service announced today is intended as a safety net for 18-25 year olds who don’t have a family to fall back on.

Children’s Minister Tracey Martin said the new service would help some 3000 young people over the next four years.

“We know that young people leaving care often have high needs. By definition they’ve had a rough start – it is hard, it is traumatic for any child to be separated from their parents.

“The care experience young people involved in the design of the new service said that they felt lonely and isolated after their time in care and often didn’t know how to get the help that they needed.”

The minister said that young people who have left the state’s care and protection have in the past ended up with worse outcomes in nearly every key area including health, housing and incomes.

“Teenagers leaving care should have the right to expect what any young person would want – knowing there is someone to turn to if they need help; a warm bed to sleep in; some help and encouragement when it is needed.

“This service will provide that, both by allowing young people to stay longer with their caregivers and providing specialised transitions support workers whose job is to help this group.”

Oranga Tamariki has been tasked with building the service, which will employ 175 new specialist staff employed and make 60 supported accommodation facilities available by year four.

Twenty-five million dollars will go towards supporting young people live with their caregiver beyond the age of 18, and $9 million to help the transition from care to independence, up to the age of 25.

Young people were engaged with in the design of the transition service, which would largely be provided by NGOs, iwi and Māori organisations.

Making the investment now reduced the risk of personal cost to the young people and would help break the cycle of families needing state care.

Nearly 30 per cent of children in care have parents who had also been in care, Ms Martin said.

The new services include:

  • 175 new specialist transition support staff by year four providing day-to-day support to individual young people as they transition out of care
  • 60 supported accommodation places by year four for young people who need a stepping stone to make a successful transition to independent living
  • $25 million over four years to support arrangements for young people to continue to live with their caregiver beyond the age of 18
  • $9 million over four years to provide advice and assistance to individual young people transitioning from care to independence, up to the age of 25.

 

Fees-free policy “not a failure” but students threaten backlash

The Government has gotten themselves into a tricky situation with their handling of the news that their tertiary education fees-free scheme has run well under budget.

The scheme was rushed into place as soon as Labour took over the Government in late 2017.

Criticism has stung the government who are quite defensive.

RNZ:  Fees-free tertiary policy not a failure, Grant Robertson says

The Finance Minister insists the fees-free tertiary policy is not a failure, despite reallocating a sizeable part of the funding to polytechs due to low demand.

The policy – a Labour Party campaign promise – has been in place since the start of 2018 and pays for the first year of full-time study for school leavers, and for those who have done fewer than six months’ tertiary study in the past.

Initial estimates were it would cost about $350 million a year, but now about $197m (over four years) will be rediverted due to fewer students taking advantage of the policy than expected.

The government budgeted for 80,000 students when it first launched the policy, but that was revised down to 50,000 once it became apparent the uptake wouldn’t be that high.

In a pre-Budget speech to the Wellington Chamber of Commerce, Finance Minister Grant Robertson said ministers had identified about $1 billion of spending that was no longer a priority.

“One example of this was underspending on the fees-free programme due to enrolments not meeting initial forecasts. This funding … is now to be redirected to the implementation of the reform of vocational education.”

He told reporters afterwards it was “far from” an admission of failure.

“Tens of thousands of New Zealanders have benefited from this scheme, this is simply a recognition that not all of the money that was allocated for it is being used.

“And now we’ve got the opportunity to put that towards a vocational education system that’s delivering people with the skills that they need.”

But the government could have done better communicating who was eligible for a year’s fees-free, said Mr Robertson.

They could also have done a better job communicating the under-performance. They have left themselves trying to defend after the news came out.

And diverting the funds rather than communicating better to prospective students may also be a problem.

RNZ: Coalition faces ‘student backlash’ if no-fee policy revised

A student leader says many students are only at her university because of the new no-fees scheme and has warned the government not to ditch its policy.

Victoria University Students Association president Tamatha Paul warned the Labour coalition not to backtrack on its 2017 election promises to implement the scheme, or face a backlash by students.

Under the scheme, the first year of full-time study for school leavers is paid for, and those who have committed fewer than six months’ tertiary study in the past also qualify.

Labour’s campaign policy in 2017 was to introduce fees-free at the start of 2018, then gradually extend it to two years’ free in 2021 and provide three years’ free in 2024.

Ms Paul told Morning Report the scheme was proving beneficial to students.

“We know that this policy is being extremely helpful,” she said.

“We’re having conversations with students consistently, who are saying they wouldn’t have come to the university if it wasn’t for this policy, especially students coming from disadvantaged backgrounds and especially those getting scholarships who are now dedicated that money towards accommodation and living costs, instead of tertiary fees.”

So some skilful communications may be in order here.

 

 

Low uptake on fees-free scheme, could be scaled back

In 2017 Labour campaigned on there being a number of crises that needed urgent attention after ‘nine years of neglect’. It was surprising that one of the first policies they piled money into was something that seemed less urgent than housing, homelessness, poverty, mental health – they rushed in a tertiary education free fees scheme so that it would be in place by the start of 2018.

It turns out that the uptake hasn’t been anywhere near as high as predicted, so the scheme won’t cost as much as was budgeted. But the Government also seems to be considering scaling back the scheme to divert  budgeted money to more urgent needs (the so-called crises remain largely unaddressed).

Stuff:  Low enrolments sees $200m clawed back from fees-free scheme

The Government is stripping nearly $200 million from its controversial fees-free policy, after the number of people taking up the offer of a year of free tertiary education was below expectations.

Although he denied disappointment with the policy, Finance Minister Grant Robertson appeared to leave the door open to cancelling an extension of the scheme to further years of free education in 2021.

At a speech to the Wellington Chamber of Commerce in Parliament on Tuesday, Robertson said that as part of the upcoming Budget, the Government had identified around $1 billion of the lowest priority initiatives to cancel.

As part of this, $197m allocated for a year of tertiary education was being redirected to changes being made in the vocational education reforms.

Of course if they don’t have to spend everything the budgeted for for fees-free that money will be able to be used elsewhere (if they don’t want to cut government expenditure).

But what is apparent here is that a scheme rushed through as a high priority in 2017 now seems to be regarded as ‘lowest priority’.

Robertson denied the move was an acknowledgement of problems with the policy. The policy assumed a significant uplift in enrolments, which had not materialised. Robertson put this down to the strong labour market which made job opportunities good.

“When you get a period of time when you have employment being very, very low, that traditionally coincides with lower enrolments, in particular in polytechs,” Robertson told reporters, adding that people still had the option of taking up the policy if they chose.

Robertson maintained that it still remained Labour Party policy to extend the scheme for a second and eventually a third year of free education, but appeared to open the door to that happening.

“We’ll take a look at the extensions nearer the time, but I still believe the principle of making sure that people can carry on with study at university or apprenticeships  or work place training is really, really important.”

The plan for a second year of free education did not take place until the next term of Government so there was “plenty of time between now and then to make that call”.

So Robertson certainly seems uncommitted to expanding the scheme as planned.

Robertson’s pre-budget speech to the Wellington Chamber of Commerce:  Wellbeing Budget to tackle long-term challenges