Budget 2021: What the Labour Government has promised so far

Source: 1News

Budget day is coming upon us once more, with the Labour Government revealing tomorrow how it will spend the country’s money for the next financial year.

Budget 2021 will be released at 2pm on Thursday, May 20. Watch TVNZ 1 from then for the 1 NEWS Budget Special, hosted by Q+A’s Jack Tame, and follow 1News.co.nz for the latest news.

This year, the Government made a total of four pre-Budget announcements. So, details are scant. In its last “normal” Budget year of 2019, before the pandemic, the Labour-led Government announced spending in at least 16 different areas before Budget day.

For the first time, Finance Minister Grant Robertson will be delivering a Budget without the influence of New Zealand First.

Robertson is also heading into Budget day with the Government’s books in a better-than-expected, but still tough, shape. Treasury figures released in April showed a deficit of $4.5 billion in the eight months leading up to February — $3.7 billion less than forecast.

In a pre-Budget speech earlier this month, Robertson warned the Government couldn’t fulfil all its promises in just one Budget, but that it wouldn’t be implementing austerity measures.

He told a BNZ-Deloitte event in Auckland it was a “recovery and wellbeing Budget” that would deal with the ongoing effects of Covid-19.

Here's what's been announced so far:

May 9 — $118.6 million for women’s health

The Government pledged to invest up to $53 million to design and implement a new test to detect cervical cancers, in the hopes of reducing the barriers women face to getting screened.

A new test is expected to replace the current smear test that 1.4 million eligible women between the ages of 25 to 69 use. It will give women an option to self-test, Associate Health Minister Ayesha Verrall announced. 

Budget 2021 will also invest up to $55.6 million in a “major upgrade” to the IT technologies supporting breast screening.

Another $10 million has been earmarked to match population growth and catch up on breast screens missed because of the Covid-19 lockdowns. 

The breast screening programme will also shift to an “opt-out” model to encourage more people who are eligible for free mammograms to get screened.

May 12 — $170 million pay boost over four years for early childhood teachers 

Education Minister Chris Hipkins has committed  $170 million  over four years for early childhood education (ECE) teachers towards pay parity with kindergarten teachers.

He said it was the "simplest and fastest way" the Government could deliver a "reasonably good pay increase". It could see some teachers' pay go up as much as 17 per cent.

Last year, the Government put $151 million into early learning services to increase the pay of an estimated 17,000 ECE teachers. 

In July, 2020, an ECE teacher said despite the funding boost for ECE centres with 100 per cent qualified teachers, teachers couldn’t live on "empty promises".

May 16 — $67.4 million over four years towards a carbon-neutral Government 

Budget 2021 will invest $67.4 million to allow the public sector to transition to being carbon neutral by 2025. 

Yokohama, Japan - April 24, 2014: Electric cars, Nissan's "Leaf", are being charged at the charging stations in front of the entrance of Nissan's global Headquarters located in Yokohama, Japan.

Of the $67.4 million, Climate Change Minister James Shaw announced about $19.5 million would go towards boosting the State Sector Decarbonisation Fund, which would allow more schools and hospitals to replace their coal broilers. This is expected to save an additional 44,000 tonnes of carbon emissions over ten years.

The remaining approximately $41.8 million will go towards leasing low-emissions vehicles for the public sector. This is expected to cut an additional 32,000 tonnes of carbon emissions over ten years.

May 19 — Covid-19 vaccines

Covid-19 Response Minister Chris Hipkins has confirmed $1.4 billion has been allocated for the country's vaccination programme "to ensure every New Zealander can receive a free vaccination".

In a report released today, the Auditor General expressed concern there may not be enough trained vaccinators.

The spending, over two years, has gone towards equipment, advance purchase agreements, the COVAX alliance  to support equitable access to the vaccines, technology, funding for DHBs, supporting Medsafe and standing up immunisation centres. 

An additional $30 million has gone into vaccine research and exploring the potential for domestic manufacturing. Another $75 million in funding has been given to the Official Development Assistance to support Pacific and global vaccine access. 

The Government’s priorities for Budget 2021

Each Government releases its Budget Policy Statement between December and March. This gives an insight into which priorities guide its decisions:

  • Continuing the Covid-19 response
  • Delivering priority and time-sensitive manifesto commitments
  • Supporting core public services through managing critical cost pressures
  • Continuing to deliver on existing investments
  • The Government also has “wellbeing” objectives, keeping in line with the living standards framework:

  • Supporting the transition to a climate-resilient, sustainable and low-emissions economy while building back from Covid-19
  • Enabling all New Zealanders and New Zealand businesses to benefit from new technologies and lift productivity and wages through innovation, and support into employment those most affected by Covid-19, including women and young people
  • Lifting Māori and Pacific incomes, skills and opportunities, and combating the impacts of Covid-19
  • Child wellbeing – Reducing child poverty and improving child wellbeing
  • Physical and mental wellbeing – Supporting improved health outcomes for all New Zealanders and keeping Covid-19 out of our communities.
  • What happens on Budget day?

    The Budget lays out where the Government's spending will go for the next year. The Finance Minister receives bids from ministers and decides what gets more or less funding.

    The Budget shows where the Government will prioritise spending over the next year.

    On Budget day each year, journalists and analysts are “locked up” in a room in Parliament for just over three hours, unable to communicate to the outside world. 

    During that time, journalists pour over hundreds of pages of figures and documents, pulling the data together for the public for after the lock-up ends at 2pm.