Finance Minister Bill English is playing down the chance
of any election-year bribes in his sixth Budget, being released
Chances are there will be something to encourage voter
support but any lolly scramble will see fewer sweets on the
ground than in past election years.
The main thrust of Budget 2014 will be to point to next
year's small financial surplus, while playing down the level
of government debt.
The most important issues for the Government, such as
affordable housing and the Christchurch rebuild, will
dominate the election campaign and Mr English will be under
pressure to deliver some relief in both areas, while
continuing to show fiscal restraint.
In contrast to the Australian Federal Budget, which saw
Treasurer Joe Hockey slash spending in several areas, Mr
English has some room in which to expand spending.
Although the Government's mixed ownership sales model, in
which three electricity companies were listed on the NZX and
the Government reduced its shares in Air New Zealand, was not
a complete success, the funds raised can go into building
schools, hospitals and roads.
Dunedin, which is battling the reduction in AgResearch's
Invermay facility, was thrown some money last week when the
University of Otago got a multimillion-dollar boost for
Both Prime Minister John Key and Mr English have been keen to
hose down expectations of an election-year spend-up in the
Budget. Keeping a lid on government spending is seen as an
important way of keeping interest rates down.
In recent Budgets, the emphasis has been on cost-cutting and
keeping a close watch on government spending.
However, economic growth is set to translate into an upgraded
revenue forecast, leaving the Government some room to
announce modest new spending initiatives beyond 2015 - at the
same time as reducing debt and continuing the message of
Any increased spending is likely to be subtle. The Government
has indicated its preference for spending on healthcare,
education, safe communities and less welfare dependency.
Extended parental leave could be one area where the
Government could upstage the Opposition, after it turned down
Labour's Bill to extend the current rules.
Also, some help could be afforded to first-home buyers not
building their first home. The Reserve Bank's high
loan-to-value rules are restricting first-home buyers, while
allowing investors to still borrow and buy. The Christchurch
rebuild, which remains slow, due to constant fall-outs
between the city council and the Government, will receive
more money, but not from the $1 billion earmarked by Mr
English for ''new'' spending in the next financial year.
Christchurch remains pivotal to the Government's re-election
chances and Mr Key, and his ministers, will be keen to lift
the already substantial Government investment of $15 billion
to ensure more progress is made before polling day on
Announcements before the Budget have been relatively minor as
the Government saves something for today.
The largest pre-Budget announcements so far are the $100
million of new money for the Defence Force and $132 million
to bolster tax compliance.
Other smaller spending initiatives already announced include
new funding for sexual violence victims, apprenticeships and
cochlear ear implants, cash incentives for beneficiaries to
move to Christchurch and more money for New Zealand Trade and
Opposition parties say any surplus should not come at the
expense of the poor or vulnerable, such as Maori and Pacific
Island communities. Children in poverty remains a key button
for the Opposition.
It is likely Mr English will point to a return to surplus
providing increased job opportunities and higher wages as a
way of helping those most in need.