Thomas Coughlan: NZ Herald Political Editor on the Government's major cuts to operating allowance funding, KiwiSaver subsidies and Tory Whanau's exit

The Government’s plan to reduce the operating allowance from $2.4 billion to $1.3 billion is the smallest amount of new spending in a decade.

Finance Minister Nicola Willis has decided to make departments metabolise their own spending in order to get books back into surplus.

New Zealand Herald Political Editor Thomas Coughlan talks to Heather du Plessis-Allan about the ‘big’ decision, KiwiSaver subsidies and Tory Whanau dropping out of the Wellington race.

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Episode Transcript

Speaker 1 (00:00):
Thomas Coglan, the Herald's political editors with us Thomas Hallow.

Speaker 2 (00:03):
Yeah, good afternoon.

Speaker 1 (00:04):
If Nicola can pull us off, it's impressive, right.

Speaker 2 (00:07):
Yeah, this is this is really consequential. I think, I
mean this operating allowance, that's the name we give to
the new discretionary spending reduced from two point four billion
dollars to just one point three billion dollars. It's the
smallest amount of new spending in a decade. So you'd
have to go back to the bill English budget to
get one the small And basically what that means is

(00:27):
that in order to get the books back into surplus
to start paying down the debt, Nicola Willis has decided
to make the departments basically metabolize their own spending. If
you need extra money in your department, if you're a
chief executive, you're going to have to sort of have
a one on one out policy cutting something somewhere in
order to pay for something somewhere else. It's it's it's
quite it's quite big, and I think I took a

(00:49):
lot a lot of people, including myself by surprise.

Speaker 1 (00:52):
Well, what it says to us is that, I mean,
is it possible because it feels like the cuts that
this will require will run deeper than the cuts that
we see last budget.

Speaker 2 (01:01):
Yes, I think when you think about the cuts last budget,
you know that the government got its feet under the
desk and December twenty three and they basically said to
the public service, look fine, six and a half percent
to seven and a half percent of your baseline and
then get rid of it. And it was pretty quick,
pretty pretty blunt. I guess this time around, I think
they've done a deeper look into departmental spending and they've

(01:24):
actually been I think from what I'm sort of hearing it,
they've been quite sort of specific. They've locked to a
line of spending and said, right, get rid of that,
or maybe you know, tweak it like this to save
some money. And I think because of that, what you'll
probably see on budget Day twenty second of May is
you'll see larger line items that are that are freeing

(01:44):
up funding. So you might see two hundred million dollars
freed up from here, three hundred million dollars freed up
from from there. That it sort of feels like we
might be heading in that direction rather than.

Speaker 1 (01:54):
Just producing numbers. Yeah, and so are you hearing a
new rumors about what is being cut.

Speaker 2 (02:02):
Well, I did. I did have a discussion with my
colleague Gennatibsereni who comes on your show, but with Nikola
Willison December last year. Now, now she was talking in
the hypothetical, so just you know, putting that out there,
But we had a discussion about means testing certain things.
The Best Dart payment, that's the payment to new parents
that goes to every new parent that Ian Rennie has

(02:25):
also spoken. The Treasury Secretary has mentioned things like the
key we say, the subsidies. I think it's up to
five hundred and twenty dollars a year that with the
government spans a billion dollars a year on that, so
you could means test that as well. Again, obviously these
are all hypotheticals that haven't been confirmed. And the other
one I suppose would be the Winter Energy payment. I
think that's about half a billion dollars is spent on that. Again,

(02:45):
hold on.

Speaker 1 (02:46):
Take okay, here's the argument. The argument has always been
mounted is that that the admin that it takes to
means test is so expensive that you actually end up
saving very little. Yes, yeah, do you put the onus
on the person to prove that they actually qualify for it.

Speaker 2 (03:02):
Oh gosh, you're getting.

Speaker 1 (03:04):
You know what I mean? Like, if you the government
have to prove that they don't qualify, then the costers
on you. But if you now say you have to
prove to be like, look what the government has just
done with this the rebate that they've given to the
childcare stuff.

Speaker 2 (03:15):
Right, they'll be in a hurry to repeat that.

Speaker 1 (03:17):
No, but you know, like Thomas, they had made it
so difficult to get that money back because you've got
to collect your invoices for three months and then you've
got to do all the paper because it's so hard
that heaps people just don't do it right. So you
could do the same thing with the Best Start payments.
You could do the same thing with with the winter
energy payments, couldn't you?

Speaker 2 (03:34):
You see? I think I think in the cases of
I mean, you're quite right, and I think I think
the government would never again look to do a rebate
style thing like Best Start based on the experience. I mean,
this is you know, speculation they've had this year. I
think if you're looking on the key, we save a key,
we save a winter energy payment, and and the and
ab start payment. You could probably means test that by

(03:56):
income testing it. Yeah, and that would be much easier
because the ID he has all of our incomes and
it would be an easier thing to to do this.

Speaker 1 (04:04):
And I need to talk to you about Tory now.
Tory has been an objectively has been an abysmal failure
as the Wellington mayor. Are the Greens really going to
let her come in on their list?

Speaker 2 (04:15):
Look, I'm going to give you a controversial take to
give give people something to text then about. I actually
think Tory. I think the future will probably treat her
more kindly than the present. I think certainly the rates
increases have been I think probably excessive, and I personally

(04:36):
I think the airport's say idea wasn't a terrible idea.
But I think that I think the water investment, which
has been undermined by Wellington waters bungling, is actually, you know,
a pretty positive thing.

Speaker 1 (04:48):
You had to be drag kicking and screaming to that
carry on.

Speaker 2 (04:50):
And I think I mean that. I think a large
part of the negative sentiment is probably to do with
the town Hall and the Central Library blowing a hole
in central Welling.

Speaker 1 (05:01):
I don't think I'll do with her being a boozer
in public, I.

Speaker 2 (05:05):
Would I think that that is that I mean, I
think that is that is that is certainly not helping
the pro Tory case.

Speaker 1 (05:12):
Thomas. When you stop talking right now and we're going
to call your colleagues and we're going to ask them
to take your temperature and just just make sure that
you're not sick, because.

Speaker 2 (05:25):
It's not a it's not a ten out of team,
mir or two or even perhaps a nine out of team,
which is what she's saying on the radio.

Speaker 1 (05:30):
Five out of it. Anyway, Listen, if they're listening, tell
them to come immediately, all right, iole and just lay
you down because we think that we're not well.

Speaker 2 (05:39):
I'll get Jason to bring up her mom.

Speaker 1 (05:40):
Back from Okay, Thomas, listen, thank you go have a
lie down. I appreciate it. Thomas Coglan, the Herald's political editor.
I don't know what's happened to him. For more from
Heather Duplessy, Allen Drive listen live to news Talks. It'd
be from four pm weekdays, or follow the podcast on iHeartRadio.