Budget 2019 tells a story that’s skewed towards spending, materially downplaying the traditional financial context and
its trajectory
Wellington, 30 May 2019 – “Despite the drama of the last few days, the much hyped ‘world-first’ Wellbeing Budget has largely delivered on its
wellbeing promise, effectively spending everything and then some,” says Deloitte CEO Thomas Pippos.
“It was a midterm Budget by a centre left Government that felt more like an election year Budget. It was written in
black ink, and was somewhat optimistic in economic tone, despite being written during an economic autumn.”
Budget 2019 overtly prioritised making good on infrastructure and social deficits. It assumed that the fiscal music will
still be playing loud enough to stay in the black albeit that all indicators show that the volume is clearly decreasing.
And there is effectively very little left in the tank in the near term, without going into the red, if the music
stopped. So all good while the music is still playing. Not so good if it stops.
“Putting the wellbeing wrapping to the side then, what’s really different from previous Budgets other than a look and
feel that showcases certain expenditure and outcomes in a modified way?” asks Mr Pippos.
Quite a lot it turns out. The Government’s risk appetite seems higher as the focus again has been on spending under a
‘wellbeing’ banner. And the detail outside of the spending is also quite muted.
Budgets are meant to be multidimensional, telling a balanced revenue and expenditure story. They are also meant to
provide a narrative that looks to bring those numbers to life.
“The Budget was quite different on this front. It tells a story skewed towards spending, projected as being more
palatable by being badged wellbeing. It’s very clever. The Government has sought to distance itself from traditional
criticisms faced by centre left Governments while still doing what centre left Governments generally do,” says Mr
Pippos.
It was deliberately focused on positively showcasing aspects of expenditure under a wellbeing banner and aligning the
current Government with those programs. Materially muted was the traditional overall financial context and its
trajectory, he adds.”
“As we saw in Australia, with global economic sentiment being cautious, will voters place the same weighting on
wellbeing if economic fortunes start to turn? Time will tell as a lot can happen in a year; much of which is outside of
New Zealand’s control,” concludes Mr Pippos.
ENDS