A watcher's guide to Budget 2020

On Thursday 14 May 2020 at 2pm the Finance Minister will announce Budget 2020. Here’s a guide for those planning to tune in. 

What's the point?

Running a country costs money, so each year the Government puts forward a spending plan known as the Budget.

Parliament gets to approve that plan.

Common words

Budget 2020

The budget is the Government’s proposal for spending taxpayer dollars.

It’s officially called the Appropriation (2020/21 Estimates) Bill and like any bill Parliament has to pass it. 

The Budget is actually a process to get to that bill. It includes the economic and fiscal measures announced each year by the Minister of Finance, developing the document, and presenting it to the House. 

Appropriations

The sum of money the Government wants to put towards a particular area e.g. $3,221 million to fund health and disability services. 

Vote Health/Justice/Tourism etc

The word ‘vote’ is used to mean an appropriation or a grouping of appropriations. 

For example, Vote Health is all the money the Government proposes to spend in that area (e.g. would include cash for DHBs, disability services, pharmac etc). 

The budget comes in subject sections (votes), which are each voted on.

Estimates 

The estimates are the requests from Ministers for appropriations. As the name suggests, the money allocated is a calculation of what will be needed and not an exact amount. Any changes are dealt with towards the end of the financial year.

Crown expenses/revenue/debt

The crown is the government and all its parts.

Fiscal

Apparently it’s an African bird with black and white plumage (a shrike). It’s also a fancy word for Government revenue, taxation or debt.  

Budget process

The Budget is a bill which must be passed by Parliament and that process is slightly different from usual. 

• First reading - no debate (over very quick),

• Minister of Finance’s statement (anywhere from 30min to an hour),

• Second reading (up to 15 hours in total but spread over a few days),

• Estimates hearings (Weeks of Ministers turning up to select committees for a grilling),

• Estimates Debate/Committee of the Whole House (11 hours of debate on reports from the estimates hearings),

• Third reading (three hours).

Talking points

MPs are creatures of habit and while the details might change from year to year the general subject of MPs’ speeches remains pretty constant. 

Government Ministers will talk about how good their plan is and MPs from their support parties will back them up (Labour Party, New Zealand First, and the Green Party MPs).

Opposition party leaders will criticise the Budget plan and talk about how much better they’d do if they were in charge with support from their party’s MPs as well (National Party, ACT Party, and independent MP Jami-Lee Ross).

Budget day timeline 

11am - Budget lockup: journalists are given the Budget early under strict instructions that nothing can be published before 2pm. (They concentrate like it’s an exam).

Treasury officials are on hand to answer questions until 2pm. The Minister of Finance will do a half hour conference with journalists at midday behind closed doors. 

2pm - The House in session

The day starts with a few administrative things first:

• The Serjeant at Arms walks in holding the mace and bellowing “Mr Speaker” so MPs know to scramble to their spots and zip it. 

• The Speaker recites the parliamentary prayer in either te reo Māori or English

• The Clerk announces any petitions, papers, or reports that have come back to the House. 

Once that’s done, the Minister of Finance will move the Appropriations Bill to be read a first time. 

No debate takes place on this first excursion so it’s much faster than a usual first reading in the House, although a bit of time is taken as the Minister hands out beribboned copies of the Budget Statement and related documents to party leaders, the Speaker, the Clerk, and the Hansard staff (who transcribe what is said in the chamber). This part feels a bit ceremonial.

Then the Minister of Finance moves the bill be read a second time and at this point gives their big budget speech. There is no time limit on this part but it usually takes between 30 and 50 minutes. 

Usual speech topics include the international economic outlook (expect much reference to the effects of Covid-19), how New Zealand’s economy is doing, how well the Government has done over the past year and then its economic plan for the country going forward. 

After a long round of applause for the Finance Minister the Budget Debate will begin.

The Leader of the Opposition goes first (with a suggested change to the question being debated, including a ‘no-confidence’ motion). 

They’re followed by the Prime Minister and then other party leaders. Leaders with six or more MPs get 20 minutes to speak each, other MPs get 10 (that’s ACT). 

Fifteen hours in total is allowed for this debate giving a chance for nearly every MP to speak (if they split their calls to make shorter speeches), but instead of doing it all in one go the debate is spread out over a few days (weeks even). 

While that takes place in the House, Ministers will appear before various select committees to answer questions specific to the budget plans for their own portfolio. 

A chance to overthrow the Government

The budget bill is also an opportunity for a change of Government. 

If Parliament voted against the budget proposal it would mean the Government had lost the confidence of the House and a new one would have to be picked (that’s the point of that alternative motion put forward by the Leader of The Opposition at the beginning of the debate). 

If this happened (it never has); the new Government could be made up of existing MPs or a general election could be called. 

The chances of this happening are very slim as the Government has the majority of support in the House.