TODAY |

Budget will 'make sure everybody benefits' from economic growth, Finance Minister pledges

By next June, the Government now predicts it will have a $1.7 billion surplus - with the economy growing by three per cent over the next two years.

The steady growth has allowed Finance Minister Grant Robertson to devise what he says is a new method for allocating money, he told TVNZ 1's Breakfast today while discussing yesterday's release of the Half Year Economic and Fiscal Update.

"The big change we're making is rather than measuring our success on just, 'Is the economy growing? Is GDP growing?' we want to see how that's actually effecting people's wellbeing," he said. "So the shift really here is, yep, let's keep the economy going but make sure everyone benefits from it."

The "wellbeing" indicators for the 2019 Budget will include shifting to a low-emission economy, reducing child poverty, lifting incomes and opportunities for Māori and Pacific people and focusing on improving the mental wellbeing of youth.

Past Governments, Mr Robertson claims, have put the focus solely on GDP .

"In the last few years, we've been able to say, 'Oh great! Three-and-half, 4 per cent growth!' But at the same time homelessness is growing, we're seeing growing problems in people accessing mental health services, we've seen child poverty grow," Mr Robertson explained. "We don't think that's success for New Zealand."

But during a separate appearance on Breakfast today, National Party finance spokesperson Amy Adams dismissed the wellbeing focus as nothing new.

Your playlist will load after this ad

The Opposition Finance spokesperson gives her thoughts on the Government’s half-year budget. Source: Breakfast

"I think Grant is overstating the fact that this is some new focus," she said. "The country, the Government, has always measured these things and has always cared about how New Zealanders are doing. That's the ultimate measure for any government."

She described the figures released yesterday alternately as "not too bad" and "a little bit disappointing". While the economy continues to grow, that growth is slowing, she pointed out.

"Things are not a crisis, absolutely," she said. "But [it's] not nearly as good as it could be and showing signs of getting worse, and that's a bit worrying."

It's important, she said, to consider where the money for the Government initiatives is coming from.

"While it's easy and sort of trendy to not worry about the economy, if the economy's getting smaller it means there's less money to pay for all of that," she said.

Mr Robertson acknowledged that the Labour-led Government is "spending significantly more than the previous Government had planned". But with a surplus projected to hit $1.7 billion in six months and $7.6 billion by 2022, he said he also has to balance the concerns on people who say there's plenty of other things that need even more investment.

"I have Amy Adams on one side saying, 'They're taking in too much money'. I've got people on the other saying, 'Spend more'," he explained. "We've got to find a way where we invest in the core services that we need, but we also look out for future generations. You spend it all now, you don't have it to spend later.

"It's a balance and I reckon we've got it about right."

Your playlist will load after this ad

The Finance Minister joined Breakfast to talk about the Half Year Economic and Fiscal Update. Source: Breakfast