30 May 2019

Corin Dann: Some meat in Wellbeing Budget 2019 but will it satisfy?

6:10 pm on 30 May 2019

Analysis - While there's clearly some meat on the bones of this Well Being Budget, it's unlikely to quell critics who want transformation.

Finance Minister Grant Robertson hands the Budget Speech to National Party leader Simon Bridges.

Finance Minister Grant Robertson hands the Budget Speech to National Party leader Simon Bridges. Photo: RNZ / Ana Tovey

Grant Robertson's Wellbeing Budget has delivered some big bold policy initiatives, a few surprises ... and a decent splurge of cash for those on benefits.

It's solid meaty stuff, although whether it's enough to satisfy critics who want the transformational change Labour promised during the election? Well, that seems unlikely.

Because by and large while the format and design of the Budget feels different due to the new lens of Wellbeing applied it's hard to tell or, should I say, too soon to tell whether it really is that different than past budgets in approach.

The money Mr Robertson has found to boost social spending in this Budget on much needed areas like mental health and welfare comes from making savings, running smaller surpluses, and squeezing out a bit more borrowing. Nothing radical going on there.

For the record, the annual operating allowance will be increased from $2.4 billion to $3.8bn dollars this year, with another $3bn available to be spent in election year.

Many of the new well being initiatives will be welcomed by Kiwis, not least the scrapping of donations for lower decile schools and the universal provision of mental health services.

The changes in welfare are particularly significant too. In future, the benefit is to be indexed to average wage increases instead of inflation.

Given wage increases are running at double inflation at the moment that could see benefits increase by $10 to $17 a week by 2023.

But while that will be welcomed by many who have been calling on the government to do more for the country's most vulnerable, it won't go far enough for many poverty advocates.

Remember the recent Welfare Advisory Group called for $5bn worth of annual increases to benefits and entitlements.

For Mr Robertson, this Wellbeing Budget was always going to be just a start on the path towards a different way of doing things.

And managing expectations has also been tricky.

While under pressure to spend more on social programmes, he knows its vital Labour governments also maintain an air of credibility when it comes to managing the books, so the Budget Responsibility Rules that some critics on the left want to see scrapped must stay for now.

By and large, he's struck a reasonable line with this Budget by pushing spending as far as he can whilst staying within those rules.

But there are risks, staying in surplus will rely on the economy meeting its target growth rate of around 2.5 percent over the next few years.

Hardly a given with the global economy looking increasingly uncertain.

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