Govt will reassess spending

The Government will be reassessing its Budget Responsibility Rules to see if they are still appropriate as it looks to take a wellbeing focused approach to future Budgets.

This could mean the Government may loosen its purse strings when it comes to its future spending plans.

However, speaking at the postCabinet press conference yesterday, Prime Minister Jacinda Ardern and Finance Minister Grant Robertson were at pains to point out the Government was still committed to being “fiscally disciplined”.

In a pre-Budget speech last week, Robertson revealed the Government was shifting from a debt target to a range.

From 2021, instead of targeting core Crown debt at 20 per cent of GDP, the Government would target a range between 15 and 25 per cent.

That’s a variation of $15 billion in either direction.

Keeping net debt at 20 per cent of GDP is one of the Government’s Budget Responsibility Rules (BRRs), agreed to when Labour was in Opposition.

Another rule was to keep Core Crown spending — essentially how much money the Government spends — at “around 30 per cent” of GDP.

Yesterday, Robertson said the Government would “take another look” at this rule.

He said when the rules were created, they were not done with the Wellbeing Budget in mind. They were “self-imposed rules” that “were not written in stone”.