Finance Minister Grant Robertson has inspired his colleagues to look under the fiscal rug and under the spending mattress and return him the balance.
Ministers were sent on a mission to find unspent Covid-19 cash and have come up with almost $1 billion.
The Finance Minister Grant Robertson made the announcement in his annual pre-Budget speech to the Wellington Chamber of Commerce this morning.
While the money had initially been allocated during the height of the Covid response to Ministers’ respective portfolio areas – Robertson asked them to go and find what was no longer needed.
“As part of Budget preparation I asked each Minister to look again at the areas of the Covid spending for which they were responsible to see if it was still required or still a priority, and whether underspends could be reprioritised.
“This exercise has yielded around $926 million worth of savings,” Robertson said.
Covid-19 and, in particular, reducing some of the significant debt racked up in 2020, has already been signalled by Robertson as a handbrake on any big Budget announcements on May 20.
Robertson reiterated that today saying this will be a Recovery Budget – albeit with $926 million more than even Robertson had hoped for initially.
“I very much see the three Budgets that I will deliver this term as a package. It is simply not possible to fulfil every promise or commitment that we made or address all of our long term challenges in a single Budget.
“But we do have an opportunity to make real progress across this term on the core priorities of the Government as we recover and rebuild,” he said.
Over this term of government the Finance Minister says he has three goals.
“In addition to keeping New Zealanders safe from Covid-19, we are focused on accelerating our economic recovery and addressing the big three foundational challenges, housing affordability, climate change and child wellbeing.”
To ensure Robertson truly delivers in those areas the Prime Minister has put him in charge of a new Implementation Unit based in her Department of Prime Minister and Cabinet office.
It will “monitor and support implementation of a small number of critical initiatives, particularly where multiple agencies are at work”, Robertson said.
The unit will report to him as Deputy Prime Minister and comes on the back of a number of government policy failures, including Kiwibuild and Auckland’s light rail plans.
“It is crucial that we ensure that we are getting value for money from every dollar of spending, and that across the public service initiatives are being delivered in a way that supports our economic recovery,” Robertson said.
In the speech to Wellington business owners,, Robertson said New Zealand’s economy has proven to be “resilient”.
“That is not to diminish the experience of those businesses, particularly in exposed sectors such as tourism, events, international education and hospitality, who have done and continue to do it tough. But overall we can point to a number of positives.”
New Zealand is positioned strongly relative to other countries when it comes to unemployment and GDP and even in the height of Covid, Robertson said consumers internationally still wanted what New Zealand sells.
“Exports remain resilient, with annual sales of logs, fruit and wine rising while dairy and meat holding up well. Global demand for New Zealand’s dairy products continues to be high, with Fonterra expecting to pay $7.30 to $7.90 a kilo of milk solids. This will pump more than $11.5 billion into the economy,” he said.
While savings have been found for this year’s Budget, Robertson promises to spend only what is needed to in terms of the country’s response and recovery.
“The Budget will outline the details of the reprioritisations and how the Covid Response and Recovery Fund is being managed.
“We will strike a careful balance between continuing to invest in our recovery and beginning the task of reducing the debt we took on to support New Zealanders through Covid-19,” he said.