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The government has a number of looming costs.

Finance Minister Nicola Willis will make further cuts to government spending and more public servants may lose their jobs as she warns ministries not to expect any extra funding in next Budget, of which a substantial amount has already been pledged to health.

It comes as Treasury paints a tougher financial picture with higher core Crown expenses, forecast to grow from $139b in the year ending June, to $162.9bn in the year to June 2025, and less tax revenue.

This was down to increased spending on the jobseeker benefit as a result of higher short-term unemployment, as well as superannuation, higher debt servicing costs and new spending.

The government also has a number of looming costs, not limited to the abuse in state care redress scheme, Manawanui sinking, strengthening the response to severe weather events, the roads of national significance program and building a tunnel through Mt Victoria.

The update came in the half yearly fiscal update, an annual document which outlines what the Treasury observes in the economic climate and what it might see in the future. At the same time Willis released the budget policy statement, which sets out the priorities for the next May Budget.

The government has an operating allowance of $2.4 billion but $1.37bn has already been promised to the health budget as a result of an aging population, as well as fulfilling the government’s promise to fund 26 cancer medicines.

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