"New Zealand is fast approaching a crossroads. We can either take a road that costs the country more but eventually leads to better outcomes and the fast lane, or we can push our spluttering car further with no maintenance into the slow lane." 

Economist Brad Olsen, commenting ahead of today’s budget 

As the country stands at that crossroads, today’s budget doesn’t give an entirely clear direction as to which way we’re travelling. Blame Finance Minister Grant Robertson’s instincts. Robertson is a refreshingly emotional politician, unafraid to show his heartfelt empathy for anyone facing tough times. But he is also coolly pragmatic. As fast as he wants to go, he has no appetite for scaring middle voters back to National which means he’s keeping his foot only lightly on the pedal.

So from the Minister who brought you the pay freeze that wasn’t, we now have the debt target that isn’t. Finance Minister Grant Robertson was today at pains to emphasise he had no target for the net debt to GDP ratio – given the prevailing economic uncertainties, aiming at a particular percentage was meaningless, he said.

And yet … that net debt is now expected to peak below 50 percent was highlighted both in the Minister’s Budget speech and in his earlier briefing at the media and analysts lock-up. That the government’s operating balance would return to surplus by 2026/27, well in advance of what was forecast even six months ago, was another statistic the Minister was happy to emphasise.

So while he may not have a target, Robertson clearly has an objective: to maintain his carefully cultivated image of fiscal prudence. While a budget is full of numbers, graphs, financial projections and economic data, it is first and foremost a political document. And this year’s version was written with more than one eye on those former National voters who jumped left at the last election and gave Labour the historic (and possibly not to be repeated) opportunity to govern alone.

Linda Clark and Hayden Wilson give their thoughts on today's budget announcement.

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