Labour Govt to spend $1000 more per head than National

Finance Minister Grant Robertson's first Budget will eventually lead to $1000 more in government spending per head, compared to National's last Budget.

The Labour-led Government is spending $1000 more per capita than the previous National Government.

Analysis of yesterday's Budget shows total Crown spending will rise to $16,870 per person by 2021, compared to National's planned spending of $15,917 in its 2017 Budget.

The analysis was by Victoria University's Institute for Governance and Policy Studies and the New Zealand Institute of Economic Research, and took into account population increases and inflation.

The biggest portion of the increase is in welfare, in which the Government will spend $277 more per head.

It is also spending $166 more on health and $145 more in education per person.

The coalition Government will spend more in every area except finance. That is because its interest payments on public debt are falling.

Toby Moore, from Victoria University's School of Government, said spending under the Labour-led coalition was increasing in line with the overall economy.

"Productivity gains that we make as a country are matched by increased spending on the goods and services that government provides—such as a social safety net, health and education," he said.

Under National's Budget, government spending would have been stable in per capita terms between 2017 and 2021.

"This approach can be understood as government holding the line in terms of adjusting for population growth and changes in prices, but not adjusting upwards for real per capita GDP growth," Moore said.

"Thus this strategy delivered a falling government share of the economy."

Spending differences per capita
Labour coalition's 2018 Budget v National coalition's 2017 Budget

• Core government services: + $130
• Defence: +$18
• Education: +$145
• Finance costs: -$52
• Health: +$166
• Law and order: +$48
• Welfare: +$277
• NZ Super: +$68
• Other: +$155
• Total: +$954
(Victoria University, NZIER)