Balancing the books and expectations – a key challenge for Budget 2018

Insight

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As 17 May approaches, Finance Minister Grant Robertson will have more on his mind than simply balancing the books.

He also has to balance the enormous expectations of core constituents like nurses and teachers with the concern of businesses worried about the future state of the economy.

The Minister has pointed to solid GDP growth and a higher than forecast surplus by the Treasury, but there’s growing calls for more government spending to deliver the promised transformation and improvements to New Zealanders’ wellbeing.

The past six months have been notable for several bold announcements on the environment and consumer rights. These include a tough line on oil exploration, rural waterways, petrol prices and regulatory scrutiny of banks.

The announcements are evidence of a new sheriff in town prepared to take on the old guard while playing to an urban liberal support base that’s keen on taxpayer-funded cycle ways and public transport.

Labour and the Greens appear joined at the hip which is a remarkable outcome, given the hostility between the two parties less than a year ago as both struggled for electoral relevance before Jacinda Ardern took the reins. Despite this closeness, Cognito understands the Greens are worried about compromising principles for portfolios – even if the Ministerial limousines are electric-hybrid.

For New Zealand First, the glow from the success of a billion trees and as many dollars a year for provincial growth will be fading as concerns grow among its traditional supporters feeling increasingly alienated by the new policy direction and staring at an emerging divide between town and country.

After taking some time to settle in, the Government is taking a lot more political initiative and moving to live up to the expectation it created in an election campaign which redefined the term transformational.

Much of this is due to the sound coalition management by all government party leaders and Jacinda Ardern, who is demonstrating many of the Prime Ministerial traits that marked John Key’s success in the role – an ability to connect and inspire people.

The long-term success of this Government will be determined by how different parts of New Zealand, separate sectors and diverse communities can celebrate aspirations and goals that unite rather than divide them.

Less than seven months since the Government was sworn in, the Budget is only part of that.

 

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