New Zealand budget aims to deliver on 'Jacinda-mania'

(Saeed Khan/Getty Images)

(Saeed Khan/Getty Images)

New Zealand’s centre-left government boosted spending on welfare and public services Thursday in a maiden budget aimed at delivering on the promises made during last year’s “Jacinda-mania” election campaign. 

Health services were the centrepiece of the budget’s spending spree, after Prime Minister Jacinda Ardern’s campaign promises to help “left behind” voters eked out a narrow victory for the popular young leader’s governing Labour Party.

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An extra NZ$4-billion ($2.76-billion), or about 6.3%, was allocated to health spending through to 2021-22, including NZ$850-million to fix run-down hospitals.

Elsewhere an extra NZ$1.6-billion will be spent on schools to hire 1,500 new teachers, along with a promise of 6,000 new public housing dwellings.

“We can’t make up for nine years of neglect in just one budget, but these are the first steps in doing that,” said Finance Minister Grant Robertson.

“We are determined to turn the page on the ideology of individualism and a hands-off approach to the economy that has left too many people behind,” he added.

Spending to reduce child poverty and domestic violence was also boosted, along with support services for refugees.

The government had already announced a NZ$5.5-billion families package and a rise of NZ$700-million, or one third, in the foreign aid budget, much of it aimed at the country’s impoverished Pacific neighbours.

New outlays were partially paid for by scrapping NZ$7.9-billion in tax cuts promised by the previous government, Robertson said, a move Ardern foreshadowed during the election campaign.

He said the goal of reducing net government debt to 20% of gross domestic product had been pushed back two years to 2021-22 to allow more spending.

Net government debt is currently 20.8% of GDP.

The budget optimistically forecasts annual economic growth will average just below 3% over the next five years, with unemployment approaching the government’s 4% target by 2021.

It predicted a surplus of NZ$3.1-billion in 2017-18, rising to NZ$3.7-billion a year later.

Opposition leader Simon Bridges said it was an “anti-business” budget that lacked vision.

“This is a hugely disappointing budget of little imagination from a government that is borrowing more, taxing more and spending more,” he said.

“But (it) has no plans for how we as a country can earn more.”

© Agence France-Presse

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