The good numbers are the fruits of those bad numbers: the tax cuts that are due to slip into voters’ pockets.
The Government’s balancing exercise will inevitably result in the Budget being something of a day of reckoning – a tally-up of campaign promises broken, promises delayed and promises kept.
There is already significant and loud opposition to it, even before the details are known. Māori have organised a day of protest, planning to wind up at Parliament in the hour before the lock-up ends and Willis goes to Parliament to deliver it.
At the post-Cabinet press conference on Monday, Willis had given a slightly bigger glimpse of the contents: setting out the scale of the spending cuts that were coming, albeit not details of where they will fall.
She set out the expected cuts to job numbers in the public sector (almost 4000) as well as saying there were 240 other areas of spending that would be cut or trimmed to save money.
It’s a nerve-racking time for those who benefit from government assistance, and those waiting to see if this will be the year something they were promised in the election campaign will come to fruition.
Willis’ goal with the public sector cuts is obviously to do it in a way she is hoping the voters won’t even notice. Back-office staff are the targets. The front line will be boosted (provided enough workers can be found for it). The front-line staff are the workers voters see, and deliver the services they need. The police officers, the teachers, the nurses.
Ditto with the 240 areas where it has made cuts.
Asked if people would be upset by any of those cuts, Willis instead said she thought many people would be surprised at how much was being squandered on programmes of little value.
She has made it clear this year’s Budget is not the end of the cuts – in fact, it is just the beginning.
There will be three years of rolling cuts to both staff and government initiatives as part of her efforts to trim government spending and pay for tax cuts. Her stated aim is to do it slowly and smoothly, rather than in one big bang.
On Thursday we will see exactly what has been cut and voters will decide if they think it was worth it.
Her short-term goal is to forewarn voters of what is coming, so they have already digested it, leaving them with the new treat of tax cuts on Budget Day.
Willis’ answer to the question of whether the cuts or changes were consistent with National’s campaign platform carried a rather large caveat.
She said that they were consistent with the campaign of National – or one or both of its coalition partners. There is quite some space between those parties in some areas.
Willis also put in a pitch for forgiveness in advance, saying she believed New Zealanders were aware of the grim economic outlook and so would realise the government could not do everything all at once.
Campaign manifestos have always been flexible to a certain extent, especially if the circumstances dictate it once they get into Government. That is more the case when it comes to the off-the-cuff utterances made in the heat of the battle. The circumstances that allow for broken or diluted promises included natural disasters and economic crunches.
The circumstances Willis faces are in the latter camp and already existed – or were foreseeable – when it was campaigning on those promises. Inflation, a battling economy, rising interest rates and so on.
So Willis has gone to some lengths to spell out why they are even worse circumstances than they had expected, so thus might require delaying or scotching some spending promises.
Questions will remain: notably has National broken any of its campaign promises?
Willis has taken a “needs must’ approach to the question of whether National will be able to fulfil its promises, noting as circumstances changed, the Government has had to adjust too. She has used the words “tough choices” a lot.
She has compared these “tough choices” to households organising their finances: sacrificing one thing they wanted for the sake of paying for another.
It has already “broken” one promise – scrapping the first home buyer grants to help pay for more community housing. Luxon had said during the campaign that the grants would stay.
The fate of another is unknown: when asked about National’s promise to fund 13 new cancer treatments, Luxon and Willis have emphasised they could not do everything in the first Budget. They have also pointed to the chunk of money that had to be put into Pharmac to keep it going – one of its hitherto unrealised “fiscal cliffs”.
That might suggest the cancer treatments promise has been delayed or scotched.
Or it might not. Willis has promised “good surprises” will pop out of the Budget box, so it could all be part of the great guessing game.
