30 May 2019

Robertson to Parliament: ‘Please can we have money?’

From The House , 6:55 pm on 30 May 2019

Budget, budget, budget. In case you're bored of the numbers, this article has none at all (as important and fun as they can be). This is all why and how.

Budget speeches sound like the government is informing the country what it will spend money on. ‘We will spend… there will be… health will receive… etc.’

They’re not though.

Grant Robertson, Jacinda Ardern, Winston Peters and others on their way to the debating chamber for budget 2019

Grant Robertson, Jacinda Ardern, Winston Peters and others on their way to the debating chamber for budget 2019 Photo: VNP / Phil Smith

Budgets date back hundreds of years, back to an era of tussles for power between British monarchs and parliaments. Parliament had cleverly got control of the money supply, so the crown had to request cash, and Parliament decided how much they’d get.

‘Please sirs, I’d like to fight a war against France. But I need an army, forsooth.’

Not much has changed, except the entity now asking Parliament for money to spend is the Government (still called the crown though).

Minister of Finance Grant Robertson delivers his budget speech for 2019 to the House.

Grant Robertson delivers budget 2019, a long version of 'Please Parliament, can we have some money?' Photo: VNP / Daniela Maoate-Cox

That’s what the budget is; it's a spending proposal presented to Parliament, that Parliament can accept or refuse. If it refuses that’s pretty much it for the government.

So the budget is also legislation that Parliament votes on. Deciding whether or not to pass it will take the next couple of months.

The basic reason for budgets is unchanged. The way they are presented hasn’t shifted often either.

Budgets and budget speeches are broken up by the usual divisions of the purse - education, health, defence, etc. They’re called ‘votes’ which is a reminder that they are all voted on.

That’s also how the official budget tomes are divided up. Into areas that roughly match the subject select committees that will investigate them in the estimates hearings to begin soon.

Copies of the Budget 2019 documents on the table in the middle of the debating chamber.

The budget tomes all piled on 'The Table', just like any other legislation. Photo: VNP / Daniela Maoate-Cox

In last year’s budget speech Grant Robertson did exactly that. Ministers of Finance have long followed that pattern - but this year’s speech was quite different. Interestingly different.

The budget’s votes were still printed in volumes along the traditional lines. Those divisions makes it easier for the Finance and Expenditure Committee (FEC) to divvy them out for the estimates and appropriations hearings.

But the speech was not like that. It was divided up by the outcomes it wanted to effect or problems it wanted to solve.

That might sound like gloss on the numbers. And it certainly makes the speech easier to digest for the public, which is a good communications strategy.

But it’s also connected to a new approach that Treasury has been working on for most of a decade. Along with Grant Robertson they’ve been trying to get beyond measuring GDP and into considering the social impacts of policy.

Treasury Chief Economic Advisor Tim Ng.

Treasury Chief Economic Advisor Tim Ng is one of the team that has developed the new approach. Photo: VNP / Phil Smith

When Treasury was explaining this plan to the FEC Select Committee last year they used the shorthand of saying they wanted to measure not just a policy’s cost but also its value.

According to Treasury the whole approach is pretty revolutionary. It certainly would have been unthinkable for the nation’s fiscal authority to measure like this twenty years ago.

Regardless of what you may think of the actual numbers this year's approach is quite new.

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Simon Bridges, Leader of the Opposition was not particularly impressed with the cash request from the Government Photo: VNP / Daniela Maoate-Cox