NZ Budget 2022

When I looked at figures from the 2022 BEFU (Budget Economic and Fiscal Update) and the Financial Statements of the Government of New Zealand for the year ended 30 June 2021 I found that the extra government expenditure during Covid has been baked into every year into the future. This amounts to an extra $25bn per year of total Crown Expenditure, which compares with the actual figure for 2021 of $133bn – a 19% increase. This take government expenditure from 35.5% to 42.1% as a percentage of GDP.

NZD bnChange
2015 Actual93,064
2016 Actual95,1372.2%
2017 Actual99,0074.1%
2018 Actual104,0145.1%
2019 Actual111,3767.1%
2020 Actual138,91624.7%
2021 Actual133,722-3.7%
2022 Budget154,88715.8%
2023 Budget158,5282.4%
2024 Budget163,5083.1%
2025 Budget167,8722.7%
2026 Budget177,2545.6%

One might have expected total Crown Expenditure to fall after Covid. After all the costs of the vaccination program and furlough do not continue. However, in New Zealand government expenditure continues as if these costs are to be incurred every year into the future. Below I graph what Total Crown Expenditure would have been with annual growth of 4.5%pa from 2019.

The government is making no attempt to return to the pre-Covid trend line. And there has been no attempt to explain what we are getting for this [massive] extra expenditure.

Leave a Reply

Your email address will not be published. Required fields are marked *