Budget 2023: Business journalist believes Govt resisted spending in 'no frills Budget' to splash cash closer to election

  • 18/05/2023

Economists have applauded the Government for resisting political temptation by delivering a "no frills" budget and investing in infrastructure, but one business journalist believes a cash splash will come closer to election time.

National Business Review senior journalist Dita de Boni told Newshub Nation's political panel there are some "cheap frills" in the budget for families but believes there are "not genuine".

Currently, there are 20 hours of free early childhood education (ECE) for Kiwi kids aged between three and five. But that's being expanded to also include two-year-olds - an extension that is costing $1.2 billion over four years and which is expected to start from March next year.

Based on average costs so far this year, the Government is estimating that families who were not previously receiving the childcare subsidies will save about $133 per week if a two-year-old child attended ECE for at least 20 hours per week.

"But I think these things are not really genuine things," Boni said.

She cited issues facing education such as a lack of teachers and places in centres.

"If you are looking more long term, like they are in the infrastructure package, it would be better to nationalise ECE and raise benefits," Boni said.

Economist Shamubeel Eaqub said for the individual families it will feel "at the margin" but is excited the budget addresses New Zealand's $210 billion infrastructure deficit. 

"I am really pleased that while it is a no-frills budget in terms of the lolly scramble, I'm quite happy to see that there is actually focus on the infrastructure, the bits that make New Zealand function," he said.

Economist Cameron Bagrie said it looked like the Government has resisted the political temptation, which is to drive operational spending.

"Typically, when you drive operational spend, the sacrificial pawn is infrastructure, capital spend on the other side. It looks like we've seen the reverse this time around."

But Boni believes the Government's resisted splashing the cash before this year's election to save it closer to the time when New Zealanders hit the polls.

"They've kept their cash un-splashed to splash in a few months, I would say," Boni said. 

"I think they realise that pointy-headed people like ourselves would be looking at this and go 'infrastructure spend that's great', whereas, probably families, as such, beneficiaries and so forth, might be waiting for something else in the budget that's coming."

Watch the full panel above.