Grant Robertson left his capital and spending allowances unchanged in today’s mini-Budget. Next May’s ‘Wellbeing Budget’ will be his chance to do a ‘maxi’ Budget, Bernard Hickey argues.

Finance Minister Grant Robertson is keeping his powder dry for the first full budget he will be able to put his own stamp on.

That will be in May, when he releases the Wellbeing Budget, which will focus on a range of non-economic indicators such as mental health, water quality and child poverty, as well as the usual financial ones.

He will have to choose in the next couple of months whether to use up some financial wiggle room he now has to make meaningful improvements in those Wellbeing measures over the longer run.

He released a Half Yearly Fiscal and Economic Update (HYEFU) today (Thursday) that essentially left the Government’s operational and capital spending limits in place from the budget in May.

He argued it would irresponsible to pull the extra spending levers while there was so much global economic uncertainty around the US vs China trade war and Brexit.

But the bigger picture is that Robertson and the Government are not ready yet to pull the trigger on new policies to address its five new wellbeing priorities.

They are: moving to a low emissions economy; supporting a thriving nation in a digital age; lifting Maori and Pasifika skills and incomes; reducing child poverty and family violence; and improving mental health, especially for young people.

Government departments will have to submit their funding bids over the next couple of months with an eye on those priorities. They will also have to use the Treasury’s Living Standards Framework and focus on outcomes such as mental health and child poverty, rather than just how much was spent.

Robertson agreed that there was some room within the Government’s current Budget Responsibility Rules to increase the operational spending allowances and capital spending allowances in May.

But today he left both of those allowances unchanged at $2.4 billion a year for operational spending and $13.1 billion for capital spending.

Overall, the Budget surplus forecasts were broadly unchanged from May, with more than $27 billion of surpluses forecast to drag net debt down to 17.4 percent of GDP by 2022/23, with net debt 19.0 percent of GDP within five years of the Government taking office.

Robertson had targeted 20 percent within five years, so there is some wiggle room there.

It was one of the least newsworthy ‘mini-Budgets’ in recent times. The last HYEFU was just after the formation of the new Government and included much of the spending from the coalition’s 100 day plan.

Robertson has kept his powder dry for this May’s Budget.

The bigger question is around whether the Government campaigns through 2019 and 2020 to change its Budget Responsibility Rules to achieve those longer term wellbeing targets.

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