Lifting output the overall focus

In Budget 2023 then finance minister Grant Robertson focused on economic recovery.

But in Budget 2024 his successor, Nicola Willis, has emphasised tax relief, targeted investments in education and health, and lifting the productivity of New Zealand.

In the 154-page Wellbeing Budget 2023, "resilience" is mentioned 76 times and "recovery" is mentioned 67 times.

The highlights of 2023's no-frills Budget included (i) cost of living; (ii) recovery and resilience; (iii) delivering services that New Zealanders rely on; and (iv) fiscal sustainability.

The core focus of it was to provide support for the cost of living, work to drive down inflation and respond to the Auckland floods and Cyclone Gabrielle.

In her 2024 Budget speech, Ms Willis said: "This is a fiscally responsible Budget - the most fiscally responsible in seven years."

The focus of Budget 2024 is on curbing unnecessary government expenditure, prioritising frontline investments and providing tax relief to support New Zealanders amidst the rising cost of living, where the government has identified the following priorities: (i) providing tax cuts to ease the cost of living for New Zealanders; (ii) achieving savings across government departments; (iii) improving public services by reallocating funds to high-impact areas; (iv) tightly controlling government spending while funding essential priorities; and (v) establishing a better infrastructure investment pipeline.

And all these initiatives have an essential overarching focus: "Lifting productivity will be our government’s focus, whether that be through raising educational achievement, delivering better infrastructure, enabling investment, or any of the multitude of areas that need addressing."

As the Nobel laureate Paul Krugman once stated, "productivity isn’t everything, but in the long run it is almost everything".

This is how I read yesterday’s Budget announcement.

• Dr Murat Ungor is a lecturer in the economics department at the University of Otago.