Finance Minister Grant Robertson pitches 'new normal' Budget 2022 but cost of living crisis looms

Finance Minister Grant Robertson has pitched 2022 as the year New Zealand moves past COVID-19 crisis spending to a new normal. 

But that new normal includes a growing cost of living crisis - and there are unanswered questions about how the Government will address it in next week's Budget. 

Robertson set the scene for a different kind of Budget on Thursday, during a speech to the Wellington Chamber of Commerce. 

"Budget 2022 does mark a move past the crisis Budgets of COVID to a new normal," Robertson told the crowd. 

"We will bring the stability and certainty of fiscal rules, but also take the lessons of COVID to take on the big challenges and opportunities, and address the shortcomings and inequities of the old normal."

It's a 'new normal' Budget with some big-ticket items, with $6 billion in new spending mostly going towards climate change and restructuring the healthcare system

Treasury documents released last week showed the Government's tax intake was $2.7 billion above forecast at $78.6 billion, prompting calls from the Opposition to give tax relief.

"What we must not do while dealing with the pressures of the here and now is put off dealing with long-term challenges," Robertson said. 

"If we decided against reforming our health system, we would not see lower petrol prices; we would just have both high petrol prices and a health system that was not set up to meet our needs."

ACT deputy leader Brooke van Velden says inflation is the immediate concern. 

"We have food prices going through the roof, it's hard to keep track of them day to day, and I really feel for anybody who's struggling to put food on the table at the moment," she said on Thursday. 

New Stats NZ data shows grocery prices are up 6.4 percent compared to last year, with the cost of fruit and vegetables up a whopping 9.4 percent. And wages are lagging behind, up 3 percent.

"What the Government has done is borrowed and spent and driven up inflation and that's not good for the squeezed middle," van Velden said. 

Robertson insists the Government is not ignoring the rising cost of living. 

"We're highly aware of the impact of food prices on New Zealanders," he said. 

"The actions we have taken to date have been targeted towards those most affected by the types of inflation we have been seeing. Low-and middle-income households have been supported by a range of income support measures that came into effect on 1 April this year

"We have also taken action to alleviate the broader impacts of higher fuel prices by cutting fuel excise and halving the price of public transport to make that option more attractive for New Zealanders."

Robertson blames inflation on supply-chain disruption, ongoing lockdowns in China and Russia's invasion in Ukraine.

"I've heard a great deal recently about the impact of Government spending on inflation. We do need to be careful with what we spend - make sure that it's value for money."

Auckland Action Against Poverty (AAAP)'s Brooke Pao Stanley wants more support for whānau struggling to pay the bills, in next week's Budget. 

"AAAP believes that the Government could be doing a whole lot more in this space," she told Newshub. 

"I think they could make fruit and vegetables free. There's a lot of talk about taking the GST off fruit and veges."

The latest Newshub-Reid Research poll found nearly 77 percent of New Zealanders support Te Pāti Māori's proposal to remove the goods and services tax (GST) from food to help whānau with the rising cost of living.

The Newshub-Reid Research poll also found that most Kiwis - 77 percent - do not think the Government has done enough to manage the cost of living.

But the Finance Minister has made his spending priorities clear. 

"We want to continue to say that this Budget will be focussed on health, on climate change, on making sure New Zealand addresses the immediate public service needs we've got," he told reporters. 

The cost of living crisis is looming over Robertson's Budget... just seven sleeps away.