Judging by the polls, this weekend Australians are expected to vote out the governing Liberal Coalition and elect a Labor Government for the first time since 2010.
This despite the Liberal Coalition Government delivering a pre-Election Budget last month that projected a confident Government presiding over a Budget that was back in black for the first time in a decade – with an anticipated Budget surplus for 2019-20 of $7.2 billion after deficits stretching back to the GFC.
Despite some downside risks to the Australian economy, increased tax collections and cost savings allowed the Government to hit its key priorities – tax cuts, targeted spending on infrastructure and payments to households – while still projecting a healthy surplus in the coming financial year and beyond.
The Budget was framed with the voters in mind, with the centre-piece being a reasonably material tax cut.
But as recent history in New Zealand will attest, elections are fought and won on more than just the ability to offer tax relief and the strength of the economy; particularly if that is viewed as the norm.
Consistent with this, the opposition Australian Labor Party, who have been steadily leading in the polls, are talking more about free childcare, raising the minimum wage, healthcare spending and emissions targets.
Australia therefore appears to running in a time warp a couple of years behind us. Watching from afar it's a little like watching a movie you've seen before – the plot is the same, but the characters are different. The Liberal Coalition has governed for most of the post-GFC recovery period, has finally managed to right the ship, is offering tax cuts in an election year, yet is likely to be replaced by a centre-left government who have turned the discussion more on social issues.
It wasn't that long ago that the National-led government was in a similar position to the Liberals. John Key and Bill English had steered the New Zealand economy through some choppy waters following a series of economic and geological shocks.
The Budget was back in surplus and forecast to stay that way for some time. The economy was generally in good shape and, in an election-year, the National-led Government also offered up tax cuts.
However the then leader of the Opposition, Jacinda Ardern, resonated with voters, including by more overtly focussing on fairness and about those who were missing out, and the rest is history (accepted and importantly under an MMP backdrop).
Fast forward to 2019 and the rhetoric around the upcoming New Zealand Budget under the Ardern Government couldn't be more different to the past, or in starker contrast to the Australian situation.
We've been through everything that Australia is currently going through and our Labour-led government is looking to more overtly broaden the budget's horizons beyond pure economics by bringing wellbeing to the fore of decision-making.
Enter therefore the concept of the "Wellbeing Budget", where the Government will use its new wellbeing framework to identify Budget priorities and then assess which Budget bids should be funded. At a conceptual level, the Budget will be delivered through this new lens.
What remains to be seen however, is whether the concept of a "wellbeing budget" is truly transformative, or whether it is in reality simply an additional lens over an engrained policy development and funding process, and largely just a different wrapper to present the outcomes. Same basic aims, same amount of money to spent, similar policy development process…just a different application form?
Surely the Budget is still going to be a budget. At its heart it is about where money has come from, how much, where it is going to be spent, and how much. That isn't going to change.
Only time will tell therefore whether Budget 2019 represents a substantive recalibration of the norm more than the wellbeing label.
In any case, whatever happens on Budget day, we can take comfort in the fact that we are well ahead of the curve on this side of the Tasman. The Government can afford to focus on wellbeing because the economy and finances allow it, as we have been running surpluses since 2014.
And because of that, we're now into an entirely new genre of movie – and nobody really knows how it is going to play out.
Possibly again then, the unsung hero of our Budget may be the New Zealand economy, the gift that keeps on giving and affords options to whomever is the Government of the day.
- Thomas Pippos is the chief executive of Deloitte New Zealand. Alex Mitchell is a tax partner at Deloitte New Zealand.
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