May 13, 2013

A budget primer

I won’t be doing the usual budget run down this year. I haven’t got the time. Instead, here’s a budget primer:

  • The government’s economic credibility is staked on their claim to a forecast surplus in the 2014/2015 financial year – view everything in that context. With droughts declared across most of the North Island, government revenue will (probably) be below forecast and expenditure will (probably) be above. The pressure to cut, cut, cut is increased. 
  • Maori funding is an easy target. However, the Maori Party should insulate Vote Maori Affairs and Maori allocations in health, education, welfare and so on against an overall decrease. There will be cuts here and redirects there (as you’d expect), but the proper measure is whether or not there is an overall increase or decrease in funding. 
  • In previous years the Maori Party has secured modest increases. That’s a win. Well, a win considering that they’re operating in an environment of cuts. In the context of $90b worth of government expenditure, a (say) $50m increase is not much of a win. A matter of perspective, I guess. 
  • Tariana Turia has announced $34.5m in new funding this year. Again, a win considering the government is under pressure to meet their surplus target. On the other hand, not so much of a win considering that $34.5 represents a toe nail worth of government expenditure. 
  • Much of the increase will go towards combating rheumatic fever. Good. The rest will go towards papakainga development (good) and Marae/community hubs (good). It is easy to quibble with the figure, but the funding destinations are very good.

1 comment:

  1. Tax revenue's running 1.3% ahead of forecast already for the current year, and more than 5% up on last year.



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