Getting ready for Budget 2022
A few moments ago, Jordan, Louis, and our key economic advisers left the office to attend the Beehive's Budget Day “Lock Up”. We will have the next few hours to trawl through Grant Robertson’s biggest budget to date.
Today is set to be, by far, Wellington’s largest increase in baseline spending by any Government. Ever.
Grant Robertson has already signalled an “operating allowance” (i.e. new baseline funding) of $6 billion. To put that in perspective, Robertson is planning to spend an additional $3,209 for every NZ household, every year! This new spending does not include funding for new capital, such as roads and hospitals.
Sir Bill English will be shaking his head. Despite facing the Global Financial Crisis and the Christchurch Earthquakes, he never had an operating allowance larger than $2 billion. In 2011, it was just $560 million.
We're in a weird situation where the economy is hot but households are hurting. The Government's tax take has been blown out by record low employment and inflation at 6.9%. So there is simply no excuse for the anticipated budget deficit and resulting debt.
High inflation is only good (in the short term) for Government coffers because you are paying more income tax (inflation means bracket creep and higher marginal rates) and GST (as prices increase so too does the Government's cut).
But despite the river of money flowing to into the Beehive, Mr Robertson still can’t balance the books, continues to borrow, and has no plan in this time of economic uncertainty.
We all agreed that COVID costs (business shutdowns, extra costs for MIQ, etc) were a rainy day that justified some extra borrowing. But those costs are over, and the Government is now borrowing just to pay its regular bills!
Unless there is a dramatic u-turn on spending, today’s projected deficit will be the first time since the passage of the Fiscal Responsibility Act in 1994 that a Government is projected to run a deficit when the economy is running red hot.
While Kiwis are tightening their belts due to the spike in costs of living, Grant’s having a feast.
You’ve seen the work of the Taxpayers’ Union in exposing just how reckless Wellington is with your money. Just last week, we blew the whistle on NZ on Air funding a $220,000 documentary on Green Party MP Chlöe Swarbrick. Our exposé – holding the officials to account – sent the political parties, and the media (even the state-funded ones…) into a frenzy. The establishment media hate when the Taxpayers’ Union expose the backscratching with your money in Wellington.
While the Swarbrick indulgence is small pie, it speaks to the culture of arrogance towards taxpayers' money our team fights every day.
In the last year we’ve forced the Government to U-turn on the ridiculous $685 million “Sky Path” Auckland harbour cycleway, we achieved the first cut to fuel taxes in decades, and every day opposition MPs use our hard hitting research (and examples of waste) to fight our cause for taxpayers.
When the Government is doing such a poor job of spending the money is already has, do you trust Grant Robertson with an extra $3,209 per year of your money to spend?
Will you support our campaigns against Grant Robertson’s expansion of the tax-and-spend agenda?
Every dollar helps us to expose the myth of our “fiscally responsible” Government.
Make no mistake, the scale of the Taxpayers' Union's efforts in this fight totally depends on financial contributions from members and supporters like you. Click here to chip in to the war chest.
Thank you for your support.
ps. As soon as the team can leave the Beehive bunker, they'll send you the inside word on what you need to know from today. Keep an eye on your inbox and we’ll tell you what Grant Robertson won't!