Venu Menon
Wellington, May 18, 2023
The Wellbeing Budget 2023 seeks to fulfil Prime Minister Chris Hipkins’ pledge to New Zealanders to ease their pain while building for the future.
The Budget contains a package of cost-of-living measures targeted at easing the pressure of households reeling under inflation and adverse weather events.
“When I became the prime minister, I said I would focus on the bread-and-butter issues Kiwi households are facing. Today’s Budget does that by providing cost of living relief across key expenses families experience- childcare, healthcare, transport and power bills,” Hipkins said.
The Budget aims to use the savings from the reprioritisation programme undertaken by the government by reinvesting them to help ease the cost of living pressures faced by New Zealanders, raise the quality of healthcare and education, address the issues hounding the housing sector, boosting infrastructure and supporting businesses to grow high wage jobs. All these outcomes will be achieved while meeting climate goals.
The Budget builds on the respite already provided to Kiwi households, such as the Cost of Living Payment, lower fuel prices, half price public transport, increases to Working for Families, superannuation, and benefits.
Under the flagship Early Childhood Education (ECE) sector, the extension of 20 hours of childcare to 3 to 5-year olds now covers 2 -year-olds as well. The rate of the subsidy has also been increased to ensure that savings are passed on to the parents.
Scrapping prescription co-payments
An estimated 3 million New Zealanders will benefit each year from the Government’s move to scrap the $5 co-payment for prescriptions which was seen as a barrier to accessing cheaper medicines. The Budget has targeted $619 million towards the health sector .
Free public transport for kids
Around 1.6 million New Zealanders will have free or half-price public transport following the move to give free public transport for children under 13 and permanent half-price fares for under 25s. The Budget has set apart $327 million to the transportation sector.
Kiwi Saver contributions for paid parental leave
The Budget targets $20 million to reform the Kiwi Saver scheme to benefit working parents, with ‘employer’ contribution matching that of paid parental leave recipients. The measure incentivises recipients of paid parental leave to save for their retirement.
Cheaper energy bills
$20 million has been set apart for an expanded Warmer Kiwi Homes programme for the installation of 100,000 new heating and insulation units, 7500 hot-water heat pumps and 5 million LED light bulbs.
Budget 2023 addresses communities still reeling from the effects of Cyclone Gabrielle and the Auckland floods. It seeks to builds on the $889 million already provided in the immediate response to the events by allocating fresh funds to support the recovery and investing in “regional resilience”
“ The impact of the recent flooding and cyclone is adding to uncertainty and has added to significant costs,” Finance Minister Grant Robertson said.
Recovery and Resilience
A $6 billion investment fund has been earmarked in the Budget to meet the immediate needs of the afflicted regions, including “reinstating road and rail networks, and repairing and rebuilding whanau homes and damaged schools.”
Business and Community Support
Building on the existing support provided in the immediate response for affected whanau and businesses, the Budget sets apart $130 million for temporary accommodation and health services, and targeted support for Maori and rural communities.
Protecting communities
$120 million is targeted at protecting communities from future climate events, including to help councils invest in flood resilience.
Building for tomorrow
The government has committed $ 71 billion across the next five years for new and existing infrastructure investments, in addition to funding set aside for projects that are still in the planning stage.
National Resilience Plan
$6 billion will go into a National Resilience Plan to support medium and long-term infrastructure investment . The government says this programme will “ initially focus on building back better from the recent weather events, but will also fund strategic investments to address our long-term infrastructure deficit and develop a credible pipeline to support our Infrastructure Action Plan.”
Delivering services New Zealanders rely on
A $3.1 billion capital fund is set apart to deliver 3000 new housing places in addition to 14,050 funded since 2018.
Education
$3.6 billion operating fund has been set aside for a range of investments to “boost skills , improve achievement, reduce class sizes and lift teacher pay.”
Supporting Kiwis into work
$190 million will go to reinstate the Training Incentive Allowance to assist sole parents and disabled people and their carers to study.
“ We are also supporting disabled Kiwis into work through continuing the Oranga Mahi health and employment service trails.”
Health
The health funding package agreed in Budget 2022 will continue, with the focus on “winter, workforce and waitlists,” as well as health reforms and equity. Specific investments include more than $1 billion to increase pay rates and boost staff numbers. $ 20 million is earmarked to lift Covid 19 immunisation and screening coverage for Maori and Pasifika peoples .
Law and Order
The government points out that “Budget 2022 included three budgets’ worth of funding for the cluster of Justice sector agencies providing resources and tools to plan ahead and achieve meaningful, long-term change.” One year on, the government claims the impacts of this multi- year funding approach has reduced youth reoffending.
Electric vehicle charging infrastructure
An operating fund of $120 million targets the setting up of charging facilities for electric vehicles to support New Zealanders keen to adopt electric vehicles.
Accelerating private investment in lower emissions
A capital fund of $300 million is pledged to help accelerate private investment in low emissions activities through New Zealand Green Investment Finance Limited.
Supporting community energy resilience
The budget sets aside $50 million for investing in renewable energy solutions to “improve access, affordability and security of energy in remote, low-income and energy insecure communities.”
Decarbonating hard-to-abate sectors
The government is committing $32 million towards investing in green hydrogen, in order to help “decarbonise energy in hard-to-abate sectors.”
Finance Minister Robertson expressed optimism in the economy: “ The economy is set to perform better than it did during the GFC despite the challenging global environment, with Treasury forecasting New Zealand will avoid recession.”
He said the New Zealand economy is in a strong position, with unemployment near record lows, wages rising faster than inflation and the Government’s books in solid shape.
“ The economy is forecast to grow by 3.2% in the year to June 2023, before easing to 1% in the following year, and then picking up to grow around 3% in the June 2026 and June 2027 years, respectively,” Robertson added.
Venu Menon is an Indian Newslink reporter based in Wellington.
