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Budget 2021 to be delivered on May 20; Finance Minister recommits to striking a 'balance' between investing in public services and housing, while keeping a lid on debt

Budget 2021 to be delivered on May 20; Finance Minister recommits to striking a 'balance' between investing in public services and housing, while keeping a lid on debt
Image sourced from Flickr

Budget 2021 will be delivered on Thursday, May 20.

“My focus continues to be on making sure spending is targeted at the areas and people that need it the most,” Finance Minister Grant Robertson said.

“We will manage the books carefully including ensuring we are getting value for money in all areas of Government spending and reprioritising spending where appropriate.

“We will also continue the balanced approach to invest in strong public services and addressing issues like housing, while keeping a lid on debt.”

Robertson said the Budget will focus on the Government’s overarching objectives for this Parliamentary term which are: continuing to keep New Zealand safe from COVID-19, accelerating the recovery and rebuild and addressing key issues like climate change, housing affordability and child poverty.

Wellbeing Objectives, which are now a requirement under changes made to the Public Finance Act, underpin budget decisions.

The 2021 Wellbeing Objectives are:

  • Just Transition to a Low Carbon Economy
  • Future of Work: Lifting Productivity and Innovation
  • Lifting Maori and Pacific Incomes and Opportunities
  • Reducing Child Poverty and Improving Child Wellbeing
  • Improved Mental and Physical Health Outcomes

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18 Comments

Interesting that there's no direct mention of COVID in the wellbeing objectives.

Wellbeing objectives are for budget decisions around new policy decisions.
There is no new initiative on COVID-19; just more of the same!

... I'm curious where the " well-being " sits with the man who speaker of the house Trevor Mallard falsely accused of rape ... does Ms Ardern not apply kindness to an innocent man , whose life has been tipped upside down into a living hell , thanks to Mallard ?

Will Robbo need to introduce a new tax to cover the ongoing legal bills and reparations in this case ?

They are inter-related, in ways I wonder if the Government really realises.

A 'low-carbon economy' translates as: a lot less work being done.
'Future of work' is therefore 'future of a lot less being done'. Innovation and Productivity - as I've mentioned many times - can only do energy efficiencies; they can't displace the reduction in 'work-done'.
The next two are fudges - they really translate as 'equalising opportunities, per head'. The unspoken - and patently false - inference is that those currently disenfranchised, can be raised to enfranchised-level consumption-rates. This is physically impossible; equality therefore requires reduction in front-end consumption-rates. Wait for the howls of indignation....
The last is fine, go for it. But don't confuse health with the holding of proxy. The two intersect, but are mostly mutually exclusive

I can see how they're going to 'tackle' the problem.

When there's a famine, tax food. Demand for food will decrease. Problem solved.

13
up

Nice one clown world. Let's raise the IQ a little though...

When there is a famine, tax the hoarding and scalping of food using magical interest only loans leveraged to nth degree on imaginary food equity. Hoarding and scalping will decrease.

Are you AC in disguise?

Tom...despite his multitude of false logic I do get the impression CWBW is much smarter than Ashley although his posts do suggest they are both in the same profession, the oldest profession.

He is the same person who is saying that if have problem, change rental ...this indicates how away from reality our FM is - not realising that it is not easy finding and changing rentals.

https://www.newshub.co.nz/home/politics/2021/03/housing-crisis-tenants-c...

Also if they really want to control housing fire, should they be not taking action on Interest Only loan.

If their is a fire in housing market, cheap and easy money is doing the role of gasoline and as interest rate cannot be changed as may affect other part of economy badly, is switching of the cheap and easy flow of money into housing market through speculators through interest only, be not contained ( if normally a speculator has power to pay weekly - say $600 with interest only, he can go upto 1.2 million or 1.1 million and if interest only is removed will be limited to buy of $600000 or $700000) It is not a rocket science SO WHY THE HESITATION.

May be hesitation for the very reason that may make real difference if gasoline of interest only is taken away from speculators.

Why even wait till budget, if genuinely wants to control ever growing housing price, Mr Orr is ready and is just a call away as is clear that Mr Orr though he can but by himself will not take a call so it has to come from a leader.

Agree and think government has already instructed rbnz to look into it and act. It will be one of the best options / measures that government with rbnz should have tried but may be as may make a real difference, advsior to government as have vested conflict of interest may be feeding with wrong theories and advsie but this analogy / reasoning on why controlling interest only loan is important is evident and self explanatory.

Only think now is government to not let is sleep with rbnz but should follow up to see it is implimented asap and most important not to come under pressure and be influenced by people who will lose the opportunity to specualte and make fast and easy money and they are plenty in high posistion to lobby and be heard.

More imoortant that not to get carried away with such news till achieve in helping FHB as even such news are indirectly aim at stopping government to act to contain speculative benefits

NZ Herald: House prices: First-home buyers big winners in housing sector shake-up

https://www.nzherald.co.nz/nz/house-prices-first-home-buyers-big-winners...

If the government wants to keep a lid on its debt then the obvious solution would be to not issue it. It doesn't finance spending and it is a throwback to the days of the gold standard. Money created through the governments spending can just be left in the banking system as bank reserves.
Economist Warren Mosler tells us this here. https://www.huffpost.com/entry/proposals-for-the-banking_b_432105

The Govt creates debt when it spends money into the economy. It makes no difference whether that 'debt' is sat in bank reserves, as cash in peoples' pockets, or as bonds held by investors. So, if Govt chooses to stop issuing bonds, this would make *zero* real difference to the level of Govt debt. The decision to issue bonds is not about debt - it is about whether Govt thinks that it needs to provide a risk-free, interest-bearing financial asset for investors (pension funds for eg).

Yes you are right of course, its all a matter of the definition of the debt. Usually when they are referring to the debt they are referring to the bonds on issue though as that is what the government is borrowing back.

Interest-only lending review

Ministers said they were considering a clampdown on interest-only loans.

The RBNZ will report back to ministers in May, and will also review debt to income rations.

THIS IS TYPICALLY OF GOVERNMENT WHEN FORCED TO MENTION BUT HAVE NO INTENTION EVER TO IMPLIMENT - PLAYING WITH TIME TO DELAY IF CANNOT FIND WAYS TO AVOID AND HOPING TO IGNORE WITH OTHER ISSUE.

You can;t base policy on feelings.

I heard a rumour that the May budget will contain measures to add a 2% interest tax to Auckland house investors' interest rates (after the style of the Auckland petrol tax). Can anybody throw any more light on this?

Talk is cheap. And that is all this Budget will be CHEAP, CHEAP

... as a taxpayer , I dont think it will be cheap at all ... gotta sneaky feeling somehow someway Robbo will resume skinning me alive ...