The Government has promised to restrict spending, while delivering income tax cuts to the vast majority of workers. To do so, public service bosses have been releasing proposals to cut spending ahead of Finance Minister Nicola Willis’s first Budget.
But some departments are expected to see funding increases in the Budget, due out on May 30.
Most government departments have been working towards savings targets. These varied from being asked to find “material savings”, to a 6.5% or 7.5% target.
But Willis, this week, has said these were only targets - and some departments had presented “compelling reasons” why those targets should not apply. But on the other side, she said, “some agencies went above and beyond their targets”.
There had also been speculation that some ministers had been reluctant to sign off cuts at their ministries. The Ministry of Foreign Affairs and Trade (MFAT), for instance, had not publicly confirmed any cost saving programme. In a statement, a spokesperson said it continued to discuss options with Foreign Minister Winston Peters. But on Thursday, Willis said the ministry had “delivered savings” - although she said the details of that would be held until Budget Day.
During various speeches and interviews ahead of Budget Day, Willis has given a few hints as to which areas she would be increasing spending on. These are the departments that can expect a Budget boost:
1 - Defence Force
Since returning from a trip to the US, Willis has signalled her intention to significantly increase funding for the Defence Force. Globally, many nations have been increasing defence spending - given tensions in Asia, and wars in the Middle East and eastern Europe.
Willis said this year’s Budget would include a “modest investment” to Defence Force spending, but future budgets were likely to contribute more significant funding increases.
The Ministry of Defence and NZDF were asked to look at savings that could be made ahead of the Budget, but Willis said none of those savings would go to tax cuts.
“The overall quantum of investment into Defence will increase in this Budget. Every dollar of savings we have found will be re-invested in new equipment and increased funding for Defence services,” she said.
In the year ahead, Willis said Defence Minister Judith Collins would identify funding priorities for future budgets. She said the Government did want to increase the forces’ capacity.
“We are living in a far less stable world,” Willis said, after a pre-Budget speech on Thursday.
“New Zealand needs to be sober about that reality. We need to be safe, and so it’s important that we take responsible decisions to make the investments required.”
In previous statements, Foreign Minister Winston Peters has also said he would support increased funding to the Defence Force.
The Defence Force has already highlighted numerous funding issues. Attrition, due to low pay, has been a major issue in recent years. The Air Force has struggled to maintain its ageing passenger transport plane. And the Navy has been unable to operate its entire fleet due to staffing shortages.
2 - Whaikaha
After Whaikaha unexpectedly cut respite care and funding for families with disabilities, Willis stepped in.
She told Stuff, in March, the Government had always planned to increase Whaikaha funding in May’s Budget.
Whaikaha provides funding for disabled people and their families. Its staff also provide advice on disability policy.
3 - Corrections
Earlier this week, the Government committed to increasing Corrections’ funding by at least $1.5 billion over the next four years.
That announcement came when Corrections Minister Mark Mitchell said the Government would add 810 beds to Waikeria Prison.
The prison currently has capacity for 455 prisoners. The previous Government funded a 600-bed expansion. Once both extensions are completed, it would have more than tripled in size - reaching capacity of 1865 beds.
That would require ongoing operational funding, with more guards, support workers, food and clothing.
4 - Police
Willis said police had been asked to make savings to its “back office” but had not reached the saving target “for good reason”.
“The New Zealand Police were able to convince us that reaching the target would involve potentially making changes that would undermine the front line service provision. So we just weren’t prepared to go through with that,” she said, following Thursday’s pre-Budget speech.
The Government had also committed to hiring a further 500 police officers.
On top of that, the police and the officers’ union, the Police Association, have gone to arbitration over dragged out pay negotiations. Willis would need to budget a contingency to afford the pay increase, which won’t be confirmed until around August.
5 - Oranga Tamariki
Willis has also confirmed funding for Oranga Tamariki would be increased in this year’s Budget.
This comes after Oranga Tamariki outlined plans to disestablish 447 roles. This had been part of an ongoing restructure process, which chief executive Chappie Te Kani said would “transform” the ministry and would only impact the “back office”.
However, his definition of “back office” had been questioned - given it included lawyers who represent the ministry in Family Court and the International Child Protection Unit.
The coalition Government also committed to establishing military style boot camps for young offenders. This would need funding.
Oranga Tamariki deputy chief executive Tusha Penny said the ministry was still developing a plan to start these boot camps, ahead of the Budget.
Other projects that will receive more money:
Schools. While the Ministry of Education has made significant cutbacks, Willis has promised to divert those savings into “front line education” - so there should be more money for actual schools.
Te Matatini. The first pre-Budget announcement Willis made was to commit to increasing funding for Te Matatini, the national kapa haka festival.
Health. Associate Health Minister David Seymour confirmed a funding boost for Pharmac, and Willis confirmed there would be more funding for Te Whatu Ora - which runs hospitals. Health is an expensive operation, necessitating funding boosts in most budgets.
- Stuff