REFLECTIONS AND COMMENTS ACKNOWLEDGEMENTS CPAG COLLEAGUES SUSAN - - PowerPoint PPT Presentation

BUDGET 2018 – REFLECTIONS AND COMMENTS

ACKNOWLEDGEMENTS

• CPAG COLLEAGUES
• SUSAN ST JOHN
• ALAN JOHNSTON
• INNES ASHER
• RHYS JONES
• STEVE POLETTI

PLAN FOR PRESENTATION

• THE SOCIAL LANDSCAPE
• THE ECONOMIC PICTURE
• CORE BUDGET COMPONENTS
• CHILDREN : WHAT WE WERE LOOKING FOR
• WHERE TO FROM HERE

SOCIAL LANDSCAPE

THE ECONOMIC PICTURE

BOTH CORE CROWN EXPENSES AND REVENUE STAY AT ABOUT 28% OF GDP

SURPLUS’ FORECAST TO INCREASE FROM $3.1B TO $7B AND DEBT DOWN TO 19.1% BY 2021

FISCAL RESPONSIBILITY RULES

• OECD AVERAGE GOVERNMENT SPENDING AS FRACTION OF GDP IS OVER 40%!
• “FOR THE LAST 20

YEARS, CORE CROWN SPENDING HAS BEEN AROUND 30% OF GDP AND WE WILL MANAGE OUR EXPENDITURE CAREFULLY TO CONTINUE THIS TREND.”

• ACTUAL SPENDING WELL UNDER THIS AT 28.5% OF GDP LESS THAN TARGET.
• BRINGING IT UP TO 30% OF GDP WOULD GIVE AN EXTRA $4B A YEAR

AND STILL BE WELL UNDER OECD AVERAGE.

• CURRENT OPERATING SURPLUS OF $3.1B WOULD COME DOWN TO A SMALL

DEFICIT.

• FISCAL RESPONSIBILITY RULES

“REDUCE THE LEVEL OF NET CORE CROWN DEBT TO 20 PER CENT OF GDP WITHIN FIVE YEARS OF TAKING OFFICE” WHY??

50 100 150 200 250 300 Japan Italy Singapore USA France UK Ireland Germany Netherlands Poland Sweden Denmark Czech Rep Hong Kong Turkey Russia

Reduction of debt from 21.7% to 19.1%. If instead they had maintained the very low debt ratio of 21.7% they could have spent $1.7b/y more over the next 4 years There is no good reason why they couldn’t increase that debt level to the still very low level

• f 25% that would allow $3.8b per year

Fiscal Responsibility Statement “The government will maintain its expenditure to within the recent historical range of spending to GDP ratio” WHY??

10 20 30 40 50 60 FRA GRC BEL ITA HUN PRT SVK DEU ISL CZE LUX ISR USA CHE IRL

NZ

HEALTH, EDUCATION, WELFARE SPENDING 2010- 2020

SUPERANNUATION AND WELFARE SPENDING

A GOOD START BUT OPPORTUNITY FOR MUCH MORE

• A GOOD START IN MANY AREAS BUT…..
• THE GOVERNMENT HAS SIGNED UP TO THE FISCAL RESPONSIBILITY RULES WHICH

MEANS IT CAN’T INCREASE SPENDING AND MUST PAY DOWN DEBT.

• NO GOOD ECONOMIC REASON
• WITH

VERY LOW DEBT ALREADY AND A SOCIAL CRISIS IT WOULD BE MUCH BETTER TO NOT PAY DOWN DEBT BUT MODESTLY INCREASE DEBT

• $4B EXTRA A YEAR EXTRA SPEND POSSIBLE IF THE GOVERNMENT HIT IT’S TARGET

OF 30% OF GDP. WOULD MEAN NOT PAYING DOWN DEBT BUT INCREASING IT SLIGHTLY.

• “NZ GOVERNMENT COULD BORROW TENS OF BILLIONS OF DOLLARS TODAY AT

2.83% AND THE BOND MARKETS WOULDN’T BAT AN EYELID” BERNARD HICKEY

HOUSING

WAITING LIST FOR SOCIAL HOUSING HAS MORE THAN DOUBLED 2015-2018

http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/housing/index.html

Priority A: “at risk…housing need that must be addressed immediately” Mar 2018: 77% applicants Priority A, increased by 1556 from Dec 2017

GOVERNMENT DETERMINED TO TACKLE HOUSING AFFORDABILITY….SOME POSITIVES

• STOPPING STATE HOUSE SELL-OFFS, 
• 1600 NEW STATE HOUSE AT $1B A

YEAR ALMOST ALL FUNDED BY MAKING HNZ BORROW.  (8000 ON URGENT WAIT LIKELY TO GROW)

• KIWI BUILD. BUILD 100,000 OVER 10
• YEARS. 
• GOOD START BUT MUCH LESS THAN NEEDED WITH IMMIGRATION AND

POPULATION GROWTH, PART OF 100 DAY PACKAGE $500M A YEAR

• 70,000 HOUSES NEEDED IMMEDIATELY. TREASURY EXPECTS THAT NOT

EVEN THIS BUILD WILL BE ACHIEVED

• SO NOT NEARLY ENOUGH TO ADDRESS THE CRISIS

The 2018 Budget provides for a $400 million increase in the main housing subsidy budgets This increase was already signalled in the 2017 Budget. The main increase is one of $300 million in the Accommodation Supplement payments due to increases in maximum payments introduced 1 April 2018.

HEALTH

NZ DEATHS (2,619) 2012-2016 ALL CAUSES 1 MONTH TO 24 YEARS OLD

Child and Youth Mortality Review Committee 2018

BUDGET: HEALTH

• $800M A YEAR INCREASE
• $210M A YEAR CAPITAL SPENDING
• INCLUDES EXTENDING ACCESS AND ELIGIBILITY FOR THE

COMMUNITY SERVICES CARD AND EXTENDING ACCESS TO VERY LOW-COST GP VISITS TO ALL COMMUNITY SERVICES CARD HOLDERS ($90M A YEAR) ($30 OFF EACH VISIT).

• MOSTLY GOES TO DHBS.

HEALTH AS A % OF GDP

NZ BELOW BENCHMARK COUNTRIES SUCH AS FRANCE (GENERALLY SEEN AS BEST). WOULD NEED AN EXTRA $2.5 BILLION A YEAR.

EDUCATION

EDUCATION

• ACCESS TO ADDITIONAL LEARNING SUPPORT IS IMPROVED, AS WELL AS THE AMOUNT OF

SUPPORT EACH CHILD GETS, WITH AN ADDITIONAL $284 MILLION INVESTMENT OVER FOUR YEARS.

• NEW CAPITAL INVESTMENT OF $394.9 MILLION WILL FUND NEW SCHOOLS AND OVER

TWO HUNDRED NEW CLASSROOMS BETWEEN 2018/19 AND 2020/21.

• ADDITIONAL SUPPORT FOR CHILDREN WITH COMPLEX LEARNING NEEDS
• EXTRA $30.2 MILLION TO SUPPORT ABOUT 2,900 DEAF AND HARD-OF-HEARING

STUDENTS AND APPROXIMATELY 1,500 LOW-VISION STUDENTS.

• TEACHER-AIDE FUNDING RECEIVES AN EXTRA $59.3 MILLION.
• EARLY INTERVENTION SERVICES RECEIVES A $21.5 MILLION OPERATING BOOST, PLUS

$272,000 CAPITAL, TO RECRUIT ADDITIONAL EARLY INTERVENTION STAFF.

EDUCATION: DECLINING REAL SPEND AS SHARE OF GDP GOING FORWARD

CPAG REQUESTS ON OTHER AREAS

Requests Budget 2018

HOUSING 2000 new social houses per year

1600/year

HEALTH Free GP visits and prescriptions 13-17 years

Free GP visits and prescriptions <14 years Community services card GP visits cheaper Nurses in secondary schools Decile 1-4

EDUCATION Lift funding freezes on all early childhood education and schools

Increased learning support Increase funding for early childhood education

INCOMES

SOCIAL WELFARE

INCREASE IN FOOD PARCELS DISTRIBUTED BY SALVATION ARMY MORE THAN DOUBLED 2007- 2017

MĀORI CHILD POVERTY

• IRRESPECTIVE OF THE MEASURE USED, MĀORI AND PACIFIC CHILDREN ARE FAR

MORE LIKELY TO LIVE IN POVERTY

• 47% OF SOLE PARENT

BENEFICIARIES ARE MĀORI

“FAMILIES PACKAGE” ESTIMATED TO LIFT 54,000 CHILDREN ABOVE THE POVERTY LINE* THE GOVERNMENT IS USING

*HOUSEHOLD INCOME 50% OF MEDIAN BEFORE HOUSING COSTS

The Families Package:

• INCREASES TO FAMILY TAX CREDIT
• INCREASE IN THRESHOLD FOR EARNINGS - GIVES A HUGE BOOST TO FAMILIES

CAUGHT IN THE RANGE $35,000-42,700

• INCREASES TO ACCOMMODATION SUPPLEMENT
• A WINTER FUEL PAYMENT
• BEST START

BUT 86,000 CHILDREN WILL REMAIN BELOW GOVERNMENT’S POVERTY LINE – THOSE IN THE VERY LOWEST INCOME FAMILIES WHO NEED $250-300/WK MORE

“BEST START”

BEST START GIVES $60/WEEK ONLY FOR BABIES BORN FROM 1 JULY 2018 EXCELLENT - IT DOESN’T DISCRIMINATE AGAINST THE BABIES OF BENEFICIARIES AS WORKING FOR FAMILIES (WFF) DOES BUT IT DOESN’T GO TO ANY CHILD BORN 30 JUNE 2018 OR EARLIER

CPAG REQUESTS ON INCOME

Requests Budget 2018

Index all benefits and all parts of Working for Families (WFF) annually - as for NZ super Reduce abatement rate for WFF from 25 to 20% Increase earning cap for beneficiaries ($165/person) Progressive universalisation of WFF - join the In Work Tax Credit of $72.50/wk to the first child payment Remove all sanctions on beneficiaries with children

Poverty in NZ DISTRESS OF WORSENING LOW INCOMES

St John S & So Y. CPAG 2018

Poverty in NZ

DISTRESS OF WORSENING LOW INCOMES

St John S & So Y. CPAG 2018 Families on benefits have meagre income, 20-30% of median, needing $250-330/wk just to reach 50% line

Why is so much money needed to lift 140,000 children out of very severe income poverty?

$1 billion/year (ballpark) is needed to redress their incomes Some key reasons their household income is so low:

• BENEFITS CUT BY 21% IN 1991 AND NEVER RESTORED
• CHILDREN IN BENEFICIARY FAMILIES DO NOT RECEIVE A CHILD

RELATED TAX CREDIT (DISCRIMINATION)

• REAL SPENDING ON WFF HAS BEEN REDUCED SINCE 2010
• ESCALATION IN HOUSING COSTS

BENEFIT SANCTIONS

• THE BUDGET HAS NOT LIFTED THE BENEFIT SANCTIONS THAT HARM

CHILDREN - IN PARTICULAR THE SANCTION THAT APPLIES WHEN THE FATHER OF A CHILD IS NOT NAMED

• THIS WOULD COST AROUND $25 MILLION
• AROUND 17,000 CHILDREN WOULD BE $28 BETTER OFF EVERY WEEK

Kohikohia ngā kākano, whakaritea te pārekereke, kia puāwai ngā hua Gather the seeds, prepare the seedbed carefully, and you will be gifted with abundance of food

He rā ki tua A day to come

Budget 2018 - verdict from CPAG

The Budget with the Families Package is a good start, but much more money is needed for children in the most severe poverty - they need to be TOP PRIORITY IMMEDIATELY So please spend more on them - there is a $3.8billion surplus

TWO QUESTIONS

• WOULD

YOU SPEND THE SURPLUS AND IF SO ON WHAT ?

• WHY THIS PRIORITY ?