Finance Minister gives nod towards infrastructure spending in Budget

Thursday, 23 May 2024

Finance Minister Nicola Willis gave a nod towards infrastructure spending in the upcoming Budget, in a speech to the Employers and Manufacturers Association in Auckland.

“My sense is that New Zealanders are realistic about the task our Government faces,” she said. “No-one is asking us to wave a magic wand.”

“Instead, people are looking to us to show a clear, credible path out of this economic and fiscal mess. You are looking for a little relief today but most importantly you need that hope that tomorrow will be better. That’s what our Budget will do.”

Willis said the Government had taken a “very fiscally responsible approach” to the Budget, to be released in a week.

“The Government is deliberately taking a medium-term approach to fiscal consolidation.

“We will be making difficult decisions and trade-offs to turn the fiscal situation around, get back to surplus and reduce debt, but we want to look after New Zealanders on the way.”

Willis said there would be “quite significant” other savings in the Budget.

“The Government is making active choices to stop some areas of spending so that we can redeploy those funds to better uses in frontline public services and other Government priorities.”

Willis said the government “will maintain a more stable and sustainable investment pipeline. We have funded a modest number of high-quality investments in Budget 2024 and ensured funding for the extensive transport agenda already signalled in our Government Policy Statement, including 15 roads of national significance”.

“We have also deliberately put aside significant sum of funding to support additional infrastructure projects, not yet agreed, which we can fund when they reach the investment-ready stage.”

Earlier this month, Willis gave a scene-setting speech in Wellington in which she dropped hints about the future funding of public services.

She said the Government had met its target of $1.5 billion of savings across government agencies, but Willis also revealed she wanted to find out whether more jobs were being created than shed.

“We're creating more frontline roles than we are disestablishing roles through the savings exercise.”

Willis signalled “significant” funding boosts for health and targeted new investment in education, disability services and police.

All agencies, which were going back and forth with ministers over what their cost saving proposal would look like, “have been given a final answer as to what their savings need to look like, then they can plan with confidence about the future”.

Labour Party finance spokesperson Barbara Edmonds earlier this week said she was “not convinced” the Government’s planned tax cuts will be fair or fiscally “stable”.

Edmonds delivered a speech to the Hutt Valley Chamber of Commerce on Tuesday morning, two weeks after Willis spoke to the chamber about the Government’s first Budget, to be delivered on May 30.

Three months into the job as Opposition finance spokesperson, Edmonds spent much of the speech not attacking the Government or justifying the prior Labour government’s spending, but explaining herself.

“This is not an eat the rich moment. I do not have a juicy sound bite on wealth tax or a capital gains tax,” she said.