Ardern government announces unprecedented spending in 2022 budget

The New Zealand government announced its 2022 budget on May 19 with a focus on reducing living costs and investing in record health.

Prime Minister Jacinda Ardern said the government has set out to give people as much certainty and security as possible within the budget.

“That’s what we’re trying to do with budget 2022. We’ll address the immediacy of the economic and health challenges facing Kiwi, while also looking at tomorrow’s challenges and bring our people from both sides. I’m trying to buffer it. ” Said While Congress is virtually isolated.

“And today, so far, there is no more universal challenge than living expenses.”

As part of the budget living package, an estimated 2.1 million New Zealanders over the age of 18, or 81% of adult kiwis, are eligible to receive $ 350 (US $ 220).

Those who earned up to $ 70,000 in last year’s tax year and have not yet received winter energy payments will be paid in three installments starting August 1.

This scheme is expected to cost taxpayers $ 814 million.

Existing fuel sales tax and road charge reductions and half-price public transport will be extended for two months until August.

“When developing this package, we had to be very careful to ensure that it reached the people who needed it most,” Ardern said. “If it’s too wide, inflation can get worse.”

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New Zealand Prime Minister Jacinda Ardern speaks via videolink on May 19, 2022 in Parliament in Wellington, New Zealand, while isolated for COVID-19 during the 2022 Budget Day. (Hagen Hopkins / Getty Images)

However, the Treasury has warned that it will increase inflationary pressures in the short term and has not recommended proceeding with another widespread one-off payment.

“Assuming this type of intervention is temporary, the risk to long-term inflationary pressure is relatively small,” said a Treasury official. Said In a policy analysis released by the Inland Revenue Department.

Officials said inflation was widespread and expected to continue into the future.

“This makes one-time payments an inadequate mechanism to help households with long-term problems,” they said.

Nikola Willis, an opposition national finance spokesman, pointed to the Treasury’s advice and described the one-time payment as “banded economics.”

“This payment also puts a lot of pressure on the Inland Revenue Department, requiring 750 frontline staff to manage the payment,” she said. “The public sector is already bloated under labor, and such measures only exacerbate it.”

Huge spending

The 2022 budget also represents the largest spending on the healthcare system with a total of $ 11.1 billion ($ 7 billion) aimed at providing better services and achieving better health outcomes.

“We have made the largest contribution to the Pharmac’s Medicines budget to date, with total funding of $ 1.2 billion, an increase of 43% since taking office,” Ardern said.

Health Minister Andrew Little has “guaranteeed” that Pharmac will use the funds to secure as many medicines as possible on his investment list, focusing on better cancer treatments. Stated.

HealthNZ, a new national health organization that replaces the “fragmented” district health commission system, will receive $ 1.8 billion in injections in the first year and an additional $ 1.3 billion in the second year.

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Dr. Stephen McBride, Clinical Director of Infectious Diseases at Midelmore Hospital, used to treat Ebola hemorrhagic fever on October 17, 2014, during a tour of the new infectious disease biocontainment unit at Midelmore Hospital in Auckland, New Zealand. We will demonstrate the equipment to be used. (Hanna Peters / Getty Images)

The government has also announced a $ 4.5 billion emission reduction plan over four years. This includes a “scrap and replace” scheme for upgrading older cars to low-emission alternatives.

An additional $ 1 billion is allocated to improve Maori health, education and financial outcomes, more than half of which is devoted to supporting Maori health services.

However, Maori co-leader Rawiri Waititi criticized the budget as “not enough.”

“If the system was vanilla cake, you’ll see more chocolate sprinkles, but after all, it’s still vanilla cake,” he says. Said Reporter.

According to Wariti, Maori, despite being 17% of the population, waited 182 years to “get 0.6% of the budget”, but in addition to the rest of the budget, they targeted additional targets. Did not pay attention to raising funds.

National leader Christopher Luxon allocated $ 6 billion ($ 3.8 billion) in 2022 and $ 16.4 billion ($ 10.5 billion) over four years. The 2022 budget has workers “spending addiction.” He said he showed that he was there.

“They confuse spending money, and the announcement of spending money, with getting things done,” he said in a post-budget breakfast speech.

He said the country needs monetary policy and interest rates to work with “good government spending” to control fiscal policy and inflation. Currently it is 6.9 percent.

“”[This] It’s the biggest increase in budget spending in the history of the country, “he said.

Rebecca Chu


Rebecca Zhu is based in Sydney. She focuses on the national affairs of Australia and New Zealand. Do you have a hint? Contact her at [email protected]