Budgets, black Budgets and surprises
There were two things my family used to listen to religiously when I was growing up. They were the Queen’s Christmas Day message and the Budget (though Bonanza with Hoss and Little Joe was also compulsory viewing).
These were the days of no Sky or Netflix and not much else happening in the evening, which is when the Budget used to be delivered (they moved to a 2pm time slot in 1996).
But those weren’t the only reason Budgets loomed so large back then. Memories of the ‘‘black Budget’’ were still strong. The ‘‘black Budget’’ refers to the Labour Budget of 1958 in which finance minister Arnold Nordmeyer increased taxes on beer, tobacco and petrol.
My father, a 60-a-day smoker and hard drinker like so many of his generation, couldn’t fathom any greater betrayal of the working class man. He tuned in every year to stoke his outrage.
The collective national memory of those days has gradually been erased as that generation dies out. Only the Ruth Richardsonauthored ‘‘mother of all budgets’’, slashing benefits and imposing austerity measures, rivals the black Budget for its enduring notoriety.
These days, the sting – and the element of surprise – has largely gone out of the Budget as governments get better at political management. Announcements are drip-fed in advance so as not to crowd out the big-ticket items. And bad news is something you try to bury.
The Budget lock-up crams 200-plus journalists, analysts, economists and commentators into the Beehive Banquet Hall for three hours with no cellphone coverage and nothing to do but craft headlines for the blanket coverage that follows the embargo lifting at 2pm.
No sane government these days would save up all its bad news for such a big splash on Budget day. That’s what the Friday afternoon before a long weekend is used for. Which is why a black budget would probably never happen now.
So in more recent times Budgets have turned from something to be feared to something to be tracy.watkins@stuff.co.nz
anticipated. Remember when cash was flowing into the government coffers at such a rapid rate that embarrassingly large surpluses turned into a political headache for the then finance minister, Michael Cullen?
They were the golden years till the global financial crisis crashed the party. But the residual hangover from those days is that government ministers feel like they have to lower expectations.
Prime Minister Jacinda Ardern and her Finance Minister, Grant Robertson, have been actively doing just that, though with some justification.
Their pre-Christmas minibudget packed a huge fiscal wallop that doesn’t leave a lot of extra room to move.
It also stole the Budget day thunder by implementing most of the coalition Government’s bigticket promises like Labour’s flagship child poverty programme, the $5.5 family income package – including the winter energy payment for low income families
Rebuilding
This is going to be the Budget day theme song, and the chorus will be repeated references to ‘‘nine years of neglect’’ under National.
With district health board deficits soaring, and the Government talking up big holes in health, education and infrastructure, expect big increases in these areas.
Winners
There will be some – think nurses, midwives, and teachers. There is building pressure for the Government to match their pay expectations and while the Budget is not where those pay rounds are negotiated, there could be moves on pay equity and on staffing levels – particularly in the health sector where nurses have been complaining about unsafe staffing levels.
Those concerns have struck a chord with Ardern.
The numbers
In its Half Year Fiscal Economic Update, Treasury forecast a budget surplus of $2.5 billion in 2018 and $2.8b in 2019. But revenue is currently running $1b ahead of the projections.
The Budget will give an indication of whether the Treasury sees that track continuing.
All eyes will be on the Treasury’s updated projections on debt and economic growth, which some commentators are suggesting are too optimistic, particularly in light of the current slowdown in business confidence.
Sausage rolls
News that the Australian Treasury had knocked one of the oldest Budget day traditions on the head – free sausage rolls – set off a near riot in the press gallery on this side of the Tasman.
But the New Zealand Treasury immediately moved to calm the market, tweeting that the sausage roll was an integral part of New Zealand’s social capital.
Thank heavens. The Budget day sausage roll is as ubiquitous as daffodils in spring.
It’s what makes being locked up for three hours with no cellphone coverage and nothing to read but government press releases bearable.