Saturday, May 18, 2013

We're back - just in time for the Budget

After a two year hiatus, the Just Comment blog is back. We hope to update this on a semi-regular basis with political and policy analysis, combined with thoughts on faith and theology. I hope you enjoy our upcoming offerings.
 
And to re-launch this blog, we have Social Policy and Parliamentary Unit's senior policy advisor Alan Johnson giving his take on the Government's latest budget.
Minister of Finance Bill English reading through Budget 2013
 
The Budget Circus - by Alan Johnson

For some time now the lead up to the release of the Government’s Budget resembles something of a circus.  The Minister of Finance is usually the ringmaster and various Ministers are the acrobats, magicians and clowns all coming up with feats which appear amazing, unbelievable or just plain silly.  The 2013 Budget has proven no different.

Budgets are more serious that this and they deserve to be treated as more than a circus.  Budgets are the time for the Government to discuss its vision for the future as well as the changes it wants to introduce and the priorities it is making.  Instead we get spin and trivia which appear designed to show the spinner in the best light and to distract us from the big questions.  Announcements from Minister are mostly about small budget programmes with the dollars inflated by reporting four years of figures. 

An example of this is the announcement that the Government was spending $20 million over four years to address the spread of Rheumatic Fever amongst the poorest of New Zealand children.  This is a great initiative of course but there are bigger questions being ignored here as we focus on such a small budget item.

For example, this $5 million per year represents just 0.04% of the total health budget of $14 billion.  What are we told about what is happening with this bigger health budget both in terms of  total spending over the next few years and the challenges which our public health system is facing?.  The answer is of course very little. 

A good thing about the Budget however is the massive amount of information which is provided by the Treasury and which allows interested citizens to dig into the detail.  Treasury even has a free app so that we can dig through this material on the move. 

Dig just a little and do your own analysis – apply total budgets to expected inflation rates and population growth and you can quickly work out whether or not Government is planning to spend more or less on our public health system over the next few years. 

The answer in this case is less. This year the per person spend on health will be around $3,150 but this falls to around $2,750 by 2016 at today’s dollar values.  We didn’t hear this from Mr English did we? 

But this decline in spending is even worse because it takes no account of our aging population nor the spread of diseases of poverty such as Rheumatic Fever.  It is no mystery that the health costs of older people are higher because they require more care and are in failing health. As we have more older people in our population total health costs will rise regardless of economic and population growth.  The Budget really tells that we are planning to spend less on public health when we should be planning to spend more.  What gives?

We aren’t talking about what gives – in fact we aren’t even talking about why give?  The problem of an aging population and declining health budgets is creeping up on us and those responsible for these budgets choose to distract us with trivia and short term thinking.

Surely as taxpayers and citizens we at least deserve an honest and open conversation over such issues.

 

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