The Prime Minister is warning that the state of the Government’s books are much worse than anticipated and says next month’s budget will be the “rebuilding budget.”
Speaking alongside Finance Minister Grant Robertson at her post-cabinet press conference, Jacinda Ardern slammed the previous Government for the state it left some of New Zealand’s public services.
She says this will be a main area of focus in the Government’s Budget next month.
She singled out education and health but, aside from some of the already public information about Middlemore Hospital, would not outline many details.
Ardern says the issues at Middlemore, whereby mould had been discovered on walls and in ceilings, is just a “snapshot” of the issue stemming from the National Government’s underfunding of public services.
“I have always said from the beginning we thought it would be bad – no one thought it would be this bad.
“In almost every portfolio I can think of off the top of my head, I can think of examples where there has been a lack of investment.”
In the lead up to the Budget, she says the Government will be “creating a picture and sharing more publicly what we have found sitting in front of us from the moment we took office and we opened up the books.”
Ardern says it’s important the “scale of the investment and rebuilding that needs to take place with our core services, like health and education,” is seen by New Zealanders.
Despite this, Robertson says the Government is still committed to its budget responsibility rules.
Before the election, Labour promised to keep Core Crown spending at roughly 30% of GDP and to reduce public debt to 20% of GDP by 2021/2022.
He says the rules help “future proof” New Zealand, in terms of any internal or external economic shocks.
This is a sentiment credit rating agency Moody’s agrees with, on Monday morning praising the rules while reaffirming New Zealand’s Aaa status.
Robertson says the measures the Government will take to address some of the issues it found in the books can be done while keeping within those parameters.
Dampening expectations
Ardern says she had to dampen down her expectations of what the Government could deliver when she saw the state the last Government left core services, like health and education in.
“It means we have had to reprioritise some of our own priorities, things that we went into the Budget looking at because of the nature of the underinvestment we’re seeing.”
She would not go into a lot of detail, except to say that in the weeks leading up to the Budget, she would detail some of the shortfalls she outlined on Monday.
She and Robertson stressed that because of the “scale” it’s not a job that can be completed in one budget.
“One budget,” Robertson says, “cannot make up for nine years of neglect.”
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