nz budget 2023

Labour MP for Ōhāriu Greg O'Connor and National Party Deputy Leader Nicola Willis join Nick Mills for Politics Monday.

This week they discuss claims crime figures are only increasing due to improved reporting rates, the Government helping fund NZ Steel's move away from coal, and whether Budget 2023 will harm the New Zealand economy.

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I was disappointed the Nats dropped the ball last week and missed the opportunity to seize on what really mattered in the Budget — and it wasn’t free prescriptions.

That particular political smokescreen was put up as easy fodder for media to fall for in the hope they’d miss the real story, which is our eye watering debt levels and how inflationary this whole thing is going to be.

Sadly it wasn’t just the media who fell for it but Luxon too. I was just thinking Luxon was coming to life a bit and showing some real mettle – the Budget should've been an easy hit for him – on a government already proven to be so inept at economic management. So the attack on the Budget should’ve been a fait accompli.

But Robertson and Hipkins instead outwitted Luxon with their political advantage – their apparent phD in smokescreens. Their budget was woeful, but their political strategy was flawless. They pre-conditioned the media, commentators, opposition and taxpayers to expect a no frills, back to basics, bread and butter budget. Then they went about releasing a budget, entirely in line with what they've been doing – spending big and borrowing bigger. In fact they added in another 20 billion of debt to top it up.  

But, and this was masterful – they baited the hook with the universal $5 on prescriptions, and some subsidised public transport. This was the classic smokescreen.

And Luxon bit that hook hard, espousing how people like him shouldn’t benefit from the reduction in prescription expenses – it should be targeted … means tested. National would review and change this.

While Luxon was pontificating over a 100 million dollar spend, where costs associated with implementing means testing would not even offset the savings, behind that smokescreen Robertson was stoking the inflationary inferno, hitting the pockets of all New Zealanders with higher living costs, less purchasing power, and expectations of further interest rate increases and ratings downgrades.

While other commentators pointed out the additional expenditure and the head-scratching forecasts of Treasury, Robertson stuck to his talking points: 1) he had no choice but to use Treasury’s forecasts and historically he thinks they’ve been pretty accurate, and 2) the extra spending's in response to inflation & Cyclone Gabrielle.

Now if Luxon was a seasoned campaigner and politically astute – Robertson would never have gotten away with that. What Luxon could’ve and should’ve done, was kick the prescriptions and free bus rides to touch – and called them out for what they were… a sideshow. He could've put the focus squarely back on the elephant in the room: the Government has been spending too much, driving the inflation, and now it's going to borrow and spend even more. And that is going to directly increase the cost of living for every single New Zealander.

It is going to drive inflation further, and will lead to further rate hikes. Luxon should’ve been prepped to highlight (as Seymour did) that in the 2021 Budget, Treasury’s forecast inflation for 2022 was 1.7 percent.  Actual inflation in 2022 was 7.3 percent.  That forecast accuracy was off by 400%.  If you extrapolate that forecast accuracy against the inflation assumptions in this Budget … we’re into recession.

So Robertson and his smokescreen won, they got away with yet more BS, all the while Luxon’s probably still pondering why he’s not further ahead in the polls yet.

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The Budget's being described as the straw that will break the camel's back on pushing up the Official Cash Rate.

Bank economists are predicting bigger interest rate hikes after the release of Finance Minister Grant Robertson's annual spending programme yesterday.

BNZ Head of Research Stephen Toplis says that there were already several reasons for the Central Bank to keep lifting the OCR.

He says they were on the verge of forecasting another rate increase, but there was more stimulus in the Budget than expected, which tipped them over the edge.

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The Government has unveiled its much-anticipated Budget 2023, with less than five months to go until the country heads to the polls.

Infometrics Principal Economist Brad Olsen and political commentator Josie Pagani join Nick Mills for a special edition of Friday Faceoff to analyse the spending. 

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National MP Chris Bishop and Labour MP for Hutt South Minister Ginny Andersen join Nick Mills on Politics Monday.

Together they debate the significance of Te Pāti Māori come election time, what we can expect from Budget 2023, and whether an increase of police officers across the country is having any effect on public safety. 

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Finance Minister Grant Robertson has revealed the Government will reprioritise $4 billion worth of savings ahead of this year's budget.

The Government has “re-doubled” efforts to trim excess spending as the economy cools, but will focus on meeting needs in health, education and housing.

NZ Herald business editor Liam Dann says $4 billion worth of savings tells the right story, but the overall figure isn't impressive.

"The story is careful, balanced, watching every line of the accounts for every possible saving, still trying to do the right thing on services."

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Finance Minister Grant Robertson has revealed the Government will reprioritise $4 billion worth of savings ahead of this year's budget.

The Government has “re-doubled” efforts to trim excess spending as the economy cools, but will focus on meeting needs in health, education and housing.

NZ Herald business editor Liam Dann says $4 billion worth of savings tells the right story, but the overall figure isn't impressive.

"The story is careful, balanced, watching every line of the accounts for every possible saving, still trying to do the right thing on services."

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The Government faces a tough balancing act for this year's Budget.

Finance Minister Grant Robertson says he's reprioritised $4 billion to spend in the four year forecast period.

It includes money saved by the Government's policy bonfire, and cash left over from the Covid response.

Independent economist Cameron Bagrie says inflation is ruthless, and a lot of money will be needed to continue Government services.

"We know there's an awful lot of pressure for public sector wage increases. At the same time, we've got various infrastructure deficits across healthcare, roading, education."

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