Treasury papers released under the Official Information Act show that it is providing advice on short-term measures the Government can employ to help it post a surplus this year.
The advice includes possible savings from delaying the rebuild of Canterbury; delaying foreign aid expenditure; holding back ACC savings; and new taxes on alcohol, tobacco, and travel. Treasury also advises the Government to focus on finding savings in Social Development and the Office of Treaty Settlements as these savings flow directly through to the Government’s bottom line.
The Government has already acted on Treasury’s ACC advice, holding back $178 million of ACC levy cuts this year instead of passing on the savings to businesses and households.
Would they seriously delay the rebuild of Canterbury simply to post a modest surplus this year?
Whatever the answer, National has turned the government’s operating balance into a political tool and is now managing taxpayer money for their own short-term political gain. And the Treasury, as dutiful public servant, is advising how they can do it.
By politicising the government’s operating balance, National is undermining trust in the accuracy and fairness of the government’s own books.
Good fiscal and economic management focuses on the medium-to-long term. Even Treasury advise that the Government’s fiscal credibility is not based on arbitrary savings and accounting tricks. In fact, it warns that the Government’s strategy of pushing out essential spending by a year puts the 2015/16 surplus forecast at greater risk.
Link to Treasury Papers released under the Official Information Act: