Venu Menon
Wellington, May 27,2024
The government has made substantial savings by removing resources from “where they are not needed,” says Minister of Finance Nicola Willis.
The minister was jointly addressing the media with Prime Minister Christopher Luxon following the weekly Cabinet meeting on Monday, May 27 in Wellington, in the leadup to the coalition government’s first Budget on Thursday.
She said ministers have run through their respective departments with a toothcomb and come up with 240 individual savings initiatives which are included in Budget 2024.
“Some of these were initiatives in the hundreds of thousands, others are in the millions,” Willis said.
She said the Budget would reflect “careful reprioritisation in almost every area of government.”
The finance minister indicated the end use of part of the savings would be to support tax relief, while “other savings will be used to boost funding for frontline services like the training of additional teachers.”
Willis said the savings exercise has freed up funds to “repair the budget holes left by the previous government,” but would not be drawn into providing details, saving that for Budget Day.
Willis anticipated some programmes would encounter “unfunded fiscal cliffs” and be left hanging without funding.
Referencing the public sector job cuts, Willis expected about 2,250 roles would be culled from government departments as part of the “baseline savings exercise.”
She said 1,150 vacancies would not be filled, and an additional 500 roles falling outside the baseline savings will be removed.
Tax dollars will go into recruiting nurses, teachers, police and corrections staff. They will also go into hiring road repair crews.
Willis made the assertion that the number of jobs added in due course would outweigh the job losses in government departments.
For his part, Prime Minister Luxon, fending media queries, denied Foreign Minister Winston Peters was “pulling the strings” to ensure MFAT was getting off lightly on the savings exercise.
Describing this year’s Budget as one for the “squeezed middle,” Luxon said the government would “slash red tape” and invest in infrastructure and tax relief.
He pointed to investments announced by the government ahead of the Budget, which included sectors such as Corrections, Defence, surf life-saving and the Coastguard, as well as Charter Schools, structured literacy and teacher training.
Investment was also targeted at the School Lunch Scheme and Pharmac.
Prime Minister Luxon provided an update on the situation in New Caledonia, saying fewer than 20 New Zealanders remained to be evacuated, who would be flown out tomorrow.
Luxon referenced the landslide in Papua New Guinea that killed more than 670 people, and said Foreign Minister Peters was in contact with the PNG government.
The prime minister wrapped up the briefing with an appeal to trust the government to get New Zealand “out of the hole that it is in.”
Venu Menon is an Indian Newslink reporter based in Wellington
