Government lifts lid on Budget 2021, with ministers advised to double benefit increases and cut health promises

The Government looked at doubling its large increase to main benefits in Budget 2021, lifting main benefits by $50 a week.

Treasury modelling showed that this increase would have more than doubled the number of children pulled out of impoverished households. But it would have doubled the immediate cost of the benefit increase, pushing it above $1 billion.

The Government opted for a more modest increase, which would phase in over a longer period of time. It lifted core benefits by $20 from July 1 this year and topping them up next year to lift all benefits by $32 to $55 overall, costing $3.3b over four years and lifting up to 33,000 children out of poverty.

The advice was released in a massive dump of Budget documents today.

It also showed Treasury advised the Government to break all of its election promises in the health portfolio, bar one - the promise to restructure the health system.

Treasury warned this promise would be so disruptive it would make other funding commitments too expensive to fund, or difficult to implement.

The Government rejected that advice and topped up Pharmac's budget by $200 million over four years, and doubled the number of cochlear implants available, costing $28.3m over four years.

However, it cut the amount it had promised to Pacific health, and ditched a $176 million promise for emergency dental grants and $37.5m for mobile dental clinics.

Both were promised at the election.

The documents also revealed former Minister of Internal Affairs Tracey Martin requested a huge increase in funding for the Royal Commission of Inquiry into Abuse in Care with little justification for the increase and before the commission assessed its future workload.

Treasury criticised the commission for its inability to stay within its funding means, using an operating model that expected future funding, and saying it could stay within its allocated funding allowance by taking money from other departments.

Martin is no longer a minister. Jan Tinetti, who took over the portfolio at the end of last year, then asked for even more money: a total of $21m in three transfers from other departments contributing to the commission.

Budget 2021 allocated $90m over the next two years to the commission.

The Treasury also released its Wellbeing analysis of Budget initiatives.

That analysis showed that dishing out $199 million in subsidies to filmmakers was better for the Government's budget priorities than money for public housing and climate change.

However, Treasury conceded that the spending was poor value for money, A substantial portion of the film subsidy will go to Lord of the Rings producers, Amazon Studios, owned by Jeff Bezos, the world's richest man.

The oversight appears to have been the result of analysing two rather limited budget priorities, "meeting critical cost pressures" and "funding time-sensitive and high priority manifesto commitments".