Chris Hipkins
Prime Minister
Minister, Ministerial Services
Minister, National Security and Intelligence
Good afternoon, everybody. Today, I’m joined by the Minister of Finance, Grant Robertson, who will shortly run through a package of actions that the Government’s going to take to fight inflation and ensure that the Government’s books return to surplus as soon as possible. A lot’s changed in the global outlook since the Budget. In the months since then, global economic growth has slowed as demand from China has softened and global milk prices have fallen. At the same time, world crude oil prices have jumped, adding to inflationary pressures here at home, resulting in the Reserve Bank indicating inflation could stay stickier for longer. While the fundamentals remain sound and it’s clear the economic cycle that we’re in will at some point come to an end, what’s important now is that the Government maintains our balanced and responsible fiscal approach to set our economy up for success.
As a result, we’re acting now to find additional savings on top of the $4 billion in savings that were identified in May’s Budget. While those actions in May were characterised by the Reserve Bank as more friend than foe when it comes to inflation, the recent forecasts are keeping pressure on the cost of living, so we’re taking action now to take the heat out of the system and to support Kiwi households. The Government’s provided families and households with cost of living relief through a range of policies, such as the winter energy payment, removing $5 prescription charges, making early childhood education cheaper, and making public transport either free or half-price for young people. That’s on one side of the coin. On the other side of the coin, we’re making sure that the State does all that it can to fight inflation and to help keep interest rates down. We can do that by balancing the books and setting New Zealand up well for when the economy does bounce back.
Today, we’re setting out further measures to do that with a programme of inflation-easing savings and efficiencies that the Government’s requiring the public sector to make. This’ll trim a further $4 billion from Government spending and have the books back into surplus as soon as possible. These changes are sensible and timely, and, while significant, I want to underscore the fact that they deliberately do not affect front-line public services. In fact, we’ve carved out front-line public services from any reductions in spending.
This is a responsible course of action to take. All political parties across the Parliament will have seen the warning signs from the global economy and forecasts that have been worsening over the last three months. It’s why I’ve been saying for some time now that this should not be a big-spending election campaign. Uncosted, untargeted tax cuts for millionaires like those promised by the Opposition are simply not affordable. Likewise, broad, sweeping statements about slashing the number of public servants and abolishing entire Government departments is destabilising and it also isn’t upfront with New Zealanders. In making these decisions, the Government is striking a careful balance. We’re supporting New Zealanders in the here and now and investing in strong public services and a resilient infrastructure network, providing cost of living relief while carefully managing our resources to ensure the long-term sustainability of our economy. I’ll now hand over to Grant before we open up for questions.