15 Aug 2018

All about the money money money: Budget 2018 passed

From The House , 6:55 pm on 15 August 2018

Jessie J was wrong when she said: “it ain’t about the money”.

It is.

Especially when it comes to passing Budgets.

Yes, you’ve been tricked into reading an article about Parliament’s financial cycle with a song from an artist who also sang about a girl who “got a booty like a cadillac”.  

Anyway, earlier this year there was much hoo-ha as the Finance Minister decided what tie to wear and journalists panicked over the supply of sausage rolls.

It was the launch of Budget 2018 when journalists were trapped for hours in a catered lock-up (hence the sausage roll frenzy) and the Finance Minister Grant Robertson delivered his first budget speech in the House outlining the Government’s spending plan for the next financial year.

Associate Finance Minister David Clark holds the box of printed budget speeches for the Finance Minister Grant Robertson to hand out.

Finance Minister Grant Robertson hands out copies of his budget while wearing what we assume was a carefully chosen tie because apparently, that is important. Photo: VNP / Daniela Maoate-Cox

That all happened in May and you may have thought that was the end of it, but Budget 2018 wasn’t actually finalised until this week - three months later.

The Appropriations (2018/19 Estimates) Bill is the Budget’s real name and it’s a piece of legislation which has to be passed by Parliament. It’s part of the financial scrutiny cycle and it’s important because the Government deals with a huge amount of money on the public’s behalf.

If you’re interested in that process, read the bullet points below; if you’re a smart cookie who knows it all already, skip down to the third reading.

  • The first reading is done without debate so it’s pretty snappy (normally this part would be two hours of 10min long speeches).

  • The second reading is the Finance Ministers' chance to shine. They hand a printed copy of their budget statement around the House and give a speech for as long as they like. Once they’ve finished, the debate starts properly with the leader of the Opposition going first (20min speech), then the other party leaders (who also have 20mins) and after that, the other MPs get to speak (up to 10min). This part can take up to 15 hours and is spread out over a few sitting days.

  • The next part is sending all the sections of the budget (known as votes) to select committees (smaller groups of MPs from across the House) for examination. This is one of the rare times Ministers appear before a committee to justify their proposed spending. The committees write reports on this part.

  • After that, it’s back to the House for 11 hours on the committee stage (also called the Appropriations Debate). MPs likely talk about the reports from the select committees.

  • Finally, the third reading takes place over three hours. That’s what happened this week.

The third reading

Printed copies of Budget 2018 and the Finance Ministers speech are tabled in the House which means they are officially released.

 Printed copies of Budget 2018 and the Finance Ministers speech on the table in the House Photo: VNP / Daniela Maoate-Cox

This is the final stage of a bill in the House before it gets sent off for the Governor General’s signature (Royal Assent) and becomes law.

Most processes in the House are on a time limit with third readings usually consisting of twelve 10 minute speeches (two hours all up).

But this special snowflake of a budget bill is given three hours and has another bill passed with it: an imprest supply bill.

Imprest supply bills give the Government some pocket-money in the meantime while the budget is being passed. There can be a few of them passed throughout a year and this one was the second.

It gives the Government some wiggle room in case they need some extra money that wasn’t quite accounted for in the budget.

Money in pocket

Hopefully the Government has more money than this in its pocket Photo: 123RF

Speeches in the third reading debate are fairly similar to the those given back in May.

The Government tells everyone their budget will be great for the country:

“Budget 2018 is about building the foundations for the future, the foundations for a future economy that delivers productivity, sustainability and inclusion for New Zealand,” said the Finance Minister Grant Robertson.

And the Opposition tells everyone the budget is useless for the country:

“They have this tremendous platform for economic opportunity and yet what we’ve seen is a waste of that opportunity,” said National’s finance spokesperson Amy Adams.

Governor-General of New Zealand, Dame Patsy Reddy, signing the first Royal assent at New Zealand Parliament. 17 October 2016

The Governor General Dame Patsy Reddy is the Sovereign's representative and gives bills her signature to make sign them into law.  Photo: Supplied / Office of the Clerk

Budget votes are also confidence votes, if the budget doesn’t pass, then it means the Government doesn’t have the confidence of the House and they have to do a walk of shame to the Governor General to tell them they can’t run the country anymore.

That chance is pretty slim though as MMP means coalitions: or in other words, an agreement between particular parties to have each other’s back.

So the Government is usually sure they’ve got enough votes to get their legislation for the Budget through and they did - 63 votes in favour; 57 against.

That’s Budget 2018 done... until they start the review process on how well the budget money was spent.