Budget 2023: $4 billion of savings and reprioritisation

Finance

Budget 2023 strikes a careful balance between supporting New Zealanders with the costs of today, while also charting a course for a more productive and resilient economy.

“This year’s Budget is a Wellbeing Budget. It is about doing the right thing by New Zealanders facing cost of living pressures, but also looking ahead to the economy we need to deliver higher wage jobs with lower emissions,” Grant Robertson said in a pre-Budget speech to the Wellington Chamber of Commerce.

“The Budget has been put together in the context of yet another set of challenging circumstances. We are in a period of elevated inflation which has been added to by the impact of the cyclone and floods earlier in the year that has seen the Government provide significant support to regions affected by the weather events.

“As the Prime Minister has already indicated the ongoing costs of the recovery will be met within the Budget operating allowance or Multi-year Capital Allowance. This means we have put responding to the cyclone ahead of some of the other areas Ministers liked to have focussed on.

“In the lead up to the Budget, Ministers were sent a clear message that if they wanted to progress particular priorities, they needed to be looking for savings and reprioritisation opportunities within their agencies’ existing budgets.

“The outcome of this exercise is that Budget 2023 will include $4 billion of savings and reprioritisations over the forecast period.

“Much of this has already been foreshadowed and includes the public media merger being stopped, the clean car upgrade and social leasing schemes being curtailed, and funding associated with the affordable water reforms and COVID programmes that are no longer needed returned.

“It also includes: closing contingencies that we weren’t convinced were still needed; reassessing the forecast requirements of government departments; and returning as savings underspends from existing initiatives.

“We owe it to New Zealanders as they are carefully considering their spending, and making trade-offs in their lives, that we do the same,” Grant Robertson said.

Next week’s Budget will have four overarching themes:

  • supporting New Zealanders with the cost of living
  • delivering the services New Zealanders rely on
  • recovery and resilience
  • fiscal sustainability

“We will be making targeted investments to support these goals, while continuing to manage the books carefully.

“Budgets are always a balancing act. We need to look after people, while at the same time moving back to a more sustainable fiscal position after the emergency spending required to get us through COVID.

“This Budget has seen us make difficult trade-offs to keep to our balanced approach. It is focused on providing support for people today, while also building our nation for the future,” Grant Robertson said.