Maori, Mental Health and KiwiRail among the top beneficiaries
Venkat Raman
Finance Minister Grant Robertson unveiled on Thursday, May 30, 2019, his ‘Wellbeing Budget 2019,’ which accounts for new Capital Expenditure of $10.4 billion, including new Operating Expenditure of $3.8 billion, forecasting growth of 2.6% during the current fiscal year.
Major Winners
KiwiRail is the biggest winner in this year’s Budget, with an investment of $1 billion which will be used to redevelop the Rail System, followed by Mental Health which will receive $1.9 billion over five years. The Government has launched a new Universal Frontline Mental Health Service to help 325,000 people over the next five years.
Maori will receive $80 million boost to provide wide-ranging services.
Tabling his Finance Bill in Parliament, Mr Robertson said that in preparing his first Wellbeing Budget, he took into account 61 indicators provided by the Living Standards Framework Dashboard of the Treasury.
He said that the Budget is a collective effort of all the ministries of the Coalition Government, based on which five priorities have been set for the fiscal year and beyond.
Capital Allowance rises multi-fold
“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,” he said.
His proposal also accounts for an increase in multi-year capital allowance by $1.7 billion to $14.8 billion.
Child Poverty is also high on the Budget agenda, focusing on increasing household incomes through income support changes ($535.1 million over four years). Indicatively, 146,000 families with 269,000 children will receive additional income from 1 April 2020, increasing to around $20 more per week by April 1, 2023.
“Budget 2019 builds on investment in the Families Package, which increased the Family Tax Credit and Accommodation Supplement, and introduced the Winter Energy and Best Start payments. 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,” Mr Robertson said.
The Budget provides $95 million for Climate Change, concentrating on Science and Research and $25 million over the next four years to deal with effects of climate change in the agricultural sector.
The government will also invest $300 million in New Zealand Venture Capital Markets to stimulate investment.
Growth expectations
He said that the New Zealand economy continues to see solid economic growth.
“In the year ended December 2018, New Zealand’s GDP growth was 2.8%, well above the OECD average of 2.3% and similar to most of our major trading partners. This growth has seen the unemployment rate reach post-GFC lows of just over 4%. Looking ahead, GDP growth is forecast to average 2.6% over the forecast period,” he said.
Mr Robertson said that the Wellbeing Budget adopted a ‘balanced investment approach.’
“This 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 on the face of this global slowdown, and outweighs the costs of higher spending and debt,” he said.
Bridges slams Budget
Opposition Leader Simon Bridges criticised the Budget saying that “The botched budget is just another example of the Government failing to deliver in its self-proclaimed year of delivery. This is not a wellbeing budget. Most New Zealanders will be left asking themselves what’s in it for them. Families want more money in their weekly budgets for food, petrol and rent. Instead, their taxes are going towards rail, the defence force and trees,” he said,.
Indian Newslink will analyse the Budget and carry views from different sources on its website (www.indiannewslink.co.nz) and social media.
