Economic security is focus of Budget week
"This will be the fourth Budget we have put together using the Wellbeing Approach. "
Budget week is upon us in Parliament. This year the Government’s Annual Budget will have one focus – to give economic security to workers, businesses and households.
There will be plenty of large numbers, estimates of future trends, and comparisons with other countries.
As we head into Budget week, I also pay close attention to the regional numbers when running the ruler over the performance of our economy. In Hawke’s Bay there’s recently been some strong results for farmers, growers, exporters and tens of thousands of local workers.
A new MSD report analysing the nine rounds of the wage subsidy during last year shows 41 per cent of unique jobs in Hawke’s Bay were supported by a wage subsidy at some stage, amounting to 34,437 people whose fortnightly pay was made more secure.
The latest trade figures show just how strongly exports grew during the pandemic, in particular the primary sector.
In the year to March 2022, our merchandise goods exports are up more than 8 per cent compared with March 2020. In the past year alone, both milk powder and meat exports are up more than 15 per cent.
The partnerships between business and government to make this happen were invaluable. Top of the list was the air connectivity scheme, where the Government subsidised airlines to keep exports flying out. Global airfreight was about to dry up during the worldwide lockdowns.
But, if the pressures of a worldwide pandemic weren’t enough, the world is now faced with a global inflation spike, ongoing supply chain disruptions and the war in Ukraine.
Recently the US has recorded inflation of 8.5 per cent, Canada 6.7 per cent,
Germany 7.3 per cent, and the UK 6.2 per cent with forecasts it will rise to 8 per cent. The very latest average inflation for OECD nations is 7.7 per cent, putting New Zealand below the middle of the pack on 6.9 per cent.
The inflation spike is expected to be temporary, but this doesn’t take away from the impact it is having on households and businesses. That’s why we moved quickly to cut fuel excise and halve the price of public transport. We’re helping with power bills for the most vulnerable through the Winter Energy Payment to those on income support or superannuation.
This will be the fourth Budget we have put together using the Wellbeing Approach. What this means in practice is that the Budget recognises there are many elements to making a successful economy and society.
We need strong finances and sustainable growth, as much as we need healthy and educated people, clean air to breathe and water to drink, and strong communities where we look after each other. Our economic security and future are determined as much by our health and mental health, the skills and education that people have, and the housing that we live in.
To get to that position we need to do things differently. We need to look further ahead to how our decisions affect future generations, and to make sure we address the big, complex challenges that lie ahead.
Our careful fiscal approach means we can plan for the future. We don’t take a Band-Aid approach or just patch up vital infrastructure like roads or Three Waters networks. We invest properly to future-proof for future generations.
There is no question that at present it is tough, but there is cause for all of us to feel optimistic. The recovery is gaining momentum and the easing of restrictions and opening up to skilled workers and tourists will help business and the economy rebuild. We will get the books back into surplus in 2024-25 and that is one year quicker than National did after the global financial crisis.
None of these results were an accident or even a coincidence. They’re a result of deliberate decisions we have made as a government, and the efforts of the whole team of 5 million. This year’s government Budget is for all of you.
Stuart Nash