Government doing right thing looking for spending cuts

The Herald reports:

Ministers have been ordered to review their portfolios in preparation for the next Budget and identify at least 1 per cent of expenditure which is not in line with the Government’s objectives, a leaked document reveals.

The document, leaked to the National Party, also shows what the priority areas for next year’s budget will be.

These include supporting mental wellbeing for all New Zealanders, with a special focus on under 24s, and lifting Maori and Pacific incomes, skills and opportunities.

The instructions to ministers said: “Each portfolio minister will be required to undertake a review within their portfolio(s) to identify at least one per cent of expenditure within each portfolio’s baseline that is not in line with the Government’s objectives, or is of the lowest priority.”

Although it’s not unusual for spending to be reprioritised – $1.4 billion was reprioritised over five years in this year’s Budget – National Finance Spokeswoman Amy Adams said the instructions read as if ministers were being asked to cut spending in their portfolios.

They are being asked to find spending cuts, and that is an excellent thing, if the cuts go from areas where the benefits are small if any.

National was very good at cutting spending in some areas, so they could spend more in higher priority areas. Good to see Labour trying to do the same.

But what you want to avoid is taking money from a high worth area. For example Labour took money from Pharmac’s budget to pay for pay rises for nurses. Those who rely on subsidised drugs probably didn’t appreciate that.

Of course the best areas you could cut spending from is free tertiary fees. They will be spending $1.2 billion a year and to date it has seen tertiary numbers decline!

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