The Budget Speech is the Budget Statement the Minister of Finance delivers at the start of Parliament's Budget debate. The Budget Statement generally focuses on the overall fiscal and economic position, the Government's policy priorities and how those priorities will be funded.
- Budget Speech
- Published: 30 May 2019
Also published on the Treasury website.
In producing this Budget we have drawn on the 61 indicators within the Treasury's Living Standards Framework dashboard that cover everything from incomes and home ownership rates to subjective wellbeing and our sense of connection to our communities. We have looked at international and national evidence, including the views of the Government's Science Advisors, Ministries and Departments, as well as other inputs such as the Child Wellbeing Strategy.
No other New Zealand Government has used this level of evidence and statistical analysis as the foundation for a Budget.
The process for Budget decisions has also changed. In the past, Ministers and agencies focused almost exclusively on their own areas of responsibility when designing Budget initiatives - an approach that has not worked for addressing New Zealand's long-term challenges.
This year Ministers worked closely together, focussing on how they could collectively tackle the Budget priorities as well as addressing their individual portfolios. There are many examples in this Budget where that collaboration has seen new and innovative programmes emerge.
Through this robust process for Budget 2019, we set five priorities grounded on a solid body of evidence. I will shortly work through the detailed initiatives within each of these priorities.
We are also making the significant investments necessary to meet cost pressures that have built up over the previous decade of underinvestment.
To do this, we have increased the operating allowances for new spending in this Budget to an average of $3.8 billion per year over the four year forecast period, an increase from the $2.4 billion set at the last Budget. We have also increased the multi-year capital allowance by $1.7 billion to $14.8 billion.
We have kept in mind the importance of balance and our commitment to carefully managing the country's finances. We have maintained a sustainable surplus this year and kept debt at manageable levels.
This balanced investment approach is important given the continuing risks of the trade disputes between the US and China, Brexit uncertainty, and a slowing global economy.
The increased government investment in Budget 2019 will stimulate the domestic economy in the face of this global slowdown, and outweighs the costs of higher spending and debt.
With interest rates at historic lows, now is the time to make the high value investments we need to secure our future living standards.
The Public Finance Act obliges us to present a long-term fiscal strategy. This year that takes us beyond the five year commitment made by this Government to our current debt target, in our Budget Responsibility Rules.
We have decided that this prudent buffer should be set out as a net debt to GDP percentage range, rather than nailed to a single figure after the expiry of our current debt target in 2022. That range is set to be 15-25 per cent. A range gives governments the capacity to take well-considered actions appropriate to the nation's circumstances - circumstances that change over time. It establishes boundaries within which debt is kept to sensible and sustainable levels and fiscal choices are driven by impact and value.
The Budget shows net core Crown debt tracking at just under 20 per cent throughout the long term projections out to 2032.