A defining Budget for Robertson and Labour
By Richard Harman (author)
It's Grant Robertson's big day; his first Budget and Labour's big chance to define the next three years.
It will be a different Budget but only in some ways.
Labour is still sticking to rigid surplus targets and has extended National's debt reduction target by only two years.
However, the party has consistently said that its first budget would address the “chronic underfunding of health, education, and police.”
Speaking in Parliament, yesterday Robertson said the Budget would “make the investments required to begin rebuilding the critical public services that New Zealanders rely on.
“We can't fix every problem in one Budget, but health, education, and housing will finally receive the support they deserve under this Government's plan.”
The biggie is health and a clue to how central that will be to comes with the Prime Minister’s post-Budget schedule.
On Friday morning she will be at North Shore hospital.
Parliament's Health Committee has just completed its review for 2016/17 of the Waitemata District Health Board which runs North Shore, and it sets out areas where plainly the Government intends to act.
“Waitemata DHB received a $62 million increase in 2017/18,” the review says.
“With a $30 million savings plan, it is expecting a $1 million deficit. In 2018/19, if funding remains at the current level, it projects that it would be $25 million short. “
So expect the bulk funding for DHB’s to get a big boost.
The latest Ministry of Health figures for the eight months ended February show that the combined DHB deficit this year is headed for $189 million, but that figure must be assumed to climb again the next year.
Waitemata also needs $650 million of capital investment.
The NZCTU Policy Director, Bill Rosenberg, and Lyndon Keene, Director of Policy and Research, Association of Salaried Medical Specialists have estimated that the DHBs’ combined budget needs to rise from $12,683 million to $13,277 million, requiring an increase of $594 million, or 4.7 percent, to maintain the current level of DHB services and cover population and cost increases.
Overall they say the Health vote’s operational expenses would need to rise by an estimated $805 million (or 5.0 percent), from $16,109 million to $16,913 million, to maintain the current levels of service.
So all up they are arguing for an increase of $1.4 billion.
However what is not clear from their figure si how much they have factored in for wage settlements in the health sector.
DHB budgets presented to the Health Select Committee indicated that there was an expectation in the sector that the settlements would be around two percent but the nurses have rejected that
But Labour’s Budget responsibility Rules project an increase in health expenditure of only $846 million.
It is this big gap that may explain the decision to not implement its plan for cheaper GP visits though there have been enough hints from the Prime Minister to suggest here may be some movement on GP's fees just not the amounts promised in the manifesto.
Finance Minister Grant Robertson says he has found another $700 million by re-prioritising some expenditure and currently the surplus is running at $910 million ahead of the Half Yearly Economic and Fiscal Update forecasts – and Winston Peters and most of the trading bank economists are all predicting a big surplus.
So Robertson may have more money up his sleeve.
Education is already accounted for as is police in that free tertiary fees and 1800 extra police have already been announced.
There have been other announcements – the increase in foreign aid, the provision for Mycoplasma Bovis which will eat into the surplus.
But how Robertson spends his extra cash and how much he elects to leave in the bank as the surplus will be one of the more interesting questions today.
But today won't only be a test for Robertson. It will be Simon Bridges' first reply to the Budget as National's Leader.
Traditionally the Opposition Leader's speech is a tub-thumping appeal mainly to the Opposition backbenchers.
The heft will come from Finance spokesperson, Amy Adams, again her first Budget speech as Finance spokesperson.
National's caucus will be watching that speech carefully as many are yet to be convinced she has what it takes to be Finance Minister.
But ultimately the day will belong to Robertson.