Finance Minister Bill English’s fifth Budget is characterised by spending well rather than spending up.
Budget 2013 has freed up a further $1.5 billion by redirecting spending to where it delivers the best results, Finance Minister Bill English says.
This takes the total amount of reprioritised government spending since Budget 2009 to $14.9 billion.
“At a time when the Government’s finances are constrained, reprioritising spending allows significant additional funding for new or proven initiatives that get better results for New Zealanders,” Mr English says.
“It’s about spending well, not spending up.”
In total, Budget 2013 includes new spending initiatives worth $5.1 billion in the current year and over the next four years, paid for by a combination of new spending and $1.5 billion in reprioritisation and new revenue initiatives. Those savings and revenue initiatives include:
- Tax and revenue changes that net an extra $313 million over four years.
- Reprioritisation of $641 million to new spending initiatives within Budget votes.
- Reprioritisation of $252 million of savings from across budget votes into significant new spending initiatives in areas like health, education, welfare reform, and science and innovation.
- $303 million from existing contingencies.
“These savings are consistent with the Government’s approach across its five Budgets, which have together reprioritised almost $15 billion of spending,” Mr English says.
“New Zealanders were conditioned in the 2000s to believe that Budgets should be about the novelty of new, expensive spending programmes that held out promises of economic and social transformation. Those promises were illusory.
“There was no sustainable revenue stream to pay for the increased spending and there was nothing genuinely transformational to show for it.
“Governments should be judged on what they achieve rather than on what they spend. The value of our spending is a better measure than the amount of our spending. This Government is focused on results, and it’s paying off.
The idea that a government should be judged on its achievements rather than its spending is a relatively new concept.
Budgets used to be focussed on spending and people waited with excitement to see what was in it for them.
The steep increases in spending from 2005 until 2008 show the cost of Labour’s pre-election lolly scramble.
National changed that, improving results rather than increasing expenditure, even going so far as to deliver a Budget with no increased spending in election year.
John Key, Bill English and their team changed that, making a virtue out of restraint and they’re getting results.
“For example, recorded crime is at a 24-year low, and we’re rolling out new technology for frontline police officers, but the baseline funding for Police is not being increased. Instead, Police are finding more efficient and effective ways of doing their job which is generating savings they can reinvest.
“At a time when many governments overseas are undertaking radical cuts to get their books in order, we are enhancing high-quality frontline public services while maintaining support for our most vulnerable citizens. That is a real achievement.
“The Government will ensure future Budgets continue to focus on improving frontline public services to deliver better results for New Zealanders, at the same time as improving value for money from more than $70 billion of public spending every year,” Mr English says. . .
A friend who worked in Wellington in the late 80s and early 90s saw the results of spending cuts. She was back there during Labour’s last few years in government and was horrified to see the increases in spending, including steep growth in public service employees, without commensurate improvements in services and results.
National had to change that but its restraint has been restrained rather than radical – focussing on protecting people from the worst impacts of the recession, reducing expenditure, improving efficiency and maintaining services.
The LabourGreen reaction to the Budget shows that they still don’t understand the necessity for such measures, they would undo the good National has done just as the 1999-2008 Labour-led government undid the good done by those which preceded it.
They spent up, they didn’t spend well and LabourGreen would follow that bad example.