Budget 2021 and PM Marriage

Good Morning and Welcome to this week’s Gospel and Culture update, by Alan Vink
Budget 2021 and PM Marriage
Monday 24th May, 2021

Budget 2021

Budget 2021 (or COVID-19 Recovery Budget or The Welfare Budget) delivered last week Thursday by Minister of Finance, Grant Robertson is unprecedented since MMP was introduced in 1996. For the first time in 25 years the 6th Labour Government has absolute power - the very thing MMP was designed to prevent, namely a single party governing alone. But that is what we have. So let’s have a quick look at the headlines.

The first number we should focus on is $55.00. Among the billions of dollars being added to hundreds of programmes and agencies, the most important figure in Labour’s first budget since the election is $55.00. That’s the weekly increase to benefits in the budget that some unemployed parents will receive over the next two years – somewhere between $32.00 and $55.00 per week. “This is the biggest lift in benefits in more than a generation,” he said. “With the changes that we have made today we will finally return all main benefits to their values before that budget,” he said of former National finance minister Ruth Richardson’s mother of all budgets. “This is righting a wrong.” It is hoped that his measure will lift at least 33,000 children out of poverty (out of a total of 133,000).

Second number is 0%. According to Treasury, the real cost of interest paid on the government’s new debt is now negative and is expected to stay so for years. That means inflation is higher than near-zero interest rates. In effect, money is free to borrow. This is extremely rare. Despite that, Robertson has pledged to keep borrowing as low as possible. Say what you want but the Ardern – Robertson combination consistently take a careful if not conservative approach to managing the Economy.

Third number is 80%. A new unemployment insurance programme could cover 80% of a worker’s income if they lose their job. This is a brand new policy proposal for New Zealand and based it seems along the lines of our ACC system. A payment from Government in the event of unemployment modelled after Canada and some Nordic countries. This will be interesting to keep an eye on over the next 12 months or so as details of this new policy emerge.

Finally for today the fourth number is a total of $4.6b for Health spending. This includes money for DHB’s, Pharmac and setting up the new Health Agency as announced earlier this month.

For Further reading and listening.
A quick summary of the budget here.

The New Zealand Initiative Chief Economist, Dr Eric Crampton discusses the Government's 2021 budget on this 15 minute podcast here

I say. It is very good news that our PM, Jacinda Ardern is getting married later this year to her long-time partner Clarke Gayford and with whom they share a beautiful daughter, Neve. Surely, this is an endorsement from our PM about the importance and value of marriage? I want to wish them well as they plan the big day and will pray that they experience a strong and happy marriage.

What do you say?