Budget 2021 passes Second reading amidst a weak opposition

Finance Minister Grant Robertson (VNP Photo by Phil Smith)

Eight hours of debate on Budget 2021 wrapped up at Parliament with MPs praising and criticising the government’s spending plan.

The Budget Debate was the second reading of the budget bill (Appropriation (2021/22 Estimates) Bill) and the most well-known part of it was the Finance Minister’s statement revealing how the government intends to spend money for the next financial year. 

The State of the Economy

Most speeches in the House are between five and 10 minutes but Budget statements often stretch out to about 40 minutes. While most of the statement is about revealing the number of dollars that particular areas will get (like Health, Housing, Covid-19 and so on) the Minister will often give an overview of the country’s economic state and where it is predicted to go. 

Once they have delivered their Statement, other Party Leaders get a chance to respond (20 minutes for those with more than six MPs, 10 minutes for those with fewer). This part of the Budget Debate is normally wrapped up in a few hours after which interest from the media and the public tends to wane.

But eight hours in total is set aside in the House for MPs to debate Budget 2021 and at the start of June, there were six and a half hours left to go. 

Budget Good or Budget Bad

The debate used to be longer at 15 hours but the Leader of the House Chris Hipkins said that MPs decided some of that time could be better used elsewhere. 

“We made the decision in the last Parliament to reduce the length of the Budget Debate because it was becoming a little bit of a cliche, a little bit repetitive, a little bit formulaic, and so making it shorter and sharper means Parliament can focus on other issues. The time that previously would’ve gone into that extra-long debate now goes into debating other issues including select committee report backs and so on,” he said.

Hipkins said that the Budget Debate gives Ministers an opportunity to highlight what they are pleased about, and Opposition MPs a chance to say what they think should have been included. Essentially the debate boils down to ‘Budget Good’ or ‘Budget Bad’ with MPs picking out parts of the Budget that relate to their areas of expertise or interest.

Tackling long-term issues

Minister of Housing Megan Woods used part of her speech to acknowledge the work done on Budget 2021 by the Finance Minister and how the Budget outlines the government’s investment priorities. 

“We are investing in our people. We are investing in infrastructure, and we are tackling those long-term issues like Inequality, Housing, and Climate Change. These are all issues that need to be addressed,” Woods said. 

Housing was a major part of Woods’ speech with mention of $3.8 billion in funding for a Housing Acceleration Fund which was announced in March.

“This will enable us to maximise the potential of the land that we own to get more pace and more scale into those large-scale projects. It will also allow us to work with councils, it will allow us to work with iwi, and it will allow us to work with Maori to ensure that we are setting up more land for development and that we are finally doing something to address affordability in our housing market,” she said.

It is typical for MPs in the governing party to speak positively about the Budget with the other side of the House taking the more critical approach. 

National Party’s Housing Spokesperson Nicola Willis said that the government had failed to deliver on Housing. 

Dither and Divide Budget

“Wellington’s average house price is now over $1 million, Auckland’s average house price is over $1.25m, and the prices continue to rise. They are rising across the whole country and it is increasing the costs of rents, mortgages, and all living costs for all New Zealanders. The problem is actually quite simple, though. We are not building enough homes. But the government’s response in this Budget has been to dither and divide. They have announced billions for housing infrastructure, but they do not have a single detail to support it.”

The final word of the debate went back to Mr Robertson, who responded to some of the criticisms and reinforces the good points of his Budget. 

“It is a Budget that starts to get on top of our long-term issues around inequality in our society, around making sure everybody has a warm, dry, safe home to live in, and looks to the future of a low-emissions economy that will produce high-paying jobs. It is a Budget I am immensely proud to have delivered in this House.”

At the end of the debate, a vote is held on whether to agree to an alternative motion put forward by the Leader of the Opposition which removes confidence in the government. 

It is not agreed to which is unsurprising as the government has the majority support in the House and the Budget bill passed its second reading. 

The next step is the estimates hearings which involve Ministers appearing before Select Committees (groups of MPs from different parties which focus on particular areas like Health, Justice or Education). Ministers have already started appearing before Committees.