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Finance Minister Bill English - Source: ONE News -
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Health and education may be next on the government's financial chopping block.
The Finance Minister, Bill English, says the brakes need to go on spending to avoid sliding deeper into debt.
Tax cuts are gone and superannuation is on ice. At a post-Budget breakfast, English said it was wrong to characterise this Budget as "slash and burn" but warned future budgets will be tight.
New Zealanders will all pay the price in the future, if tough cost cutting decisions are not made now, he says.
"There will be less money to play with and it might be a bit tighter," he says.
He's talking about health and education in particular, saying the two areas have a voracious appetite for cash and one the country can't afford to continue to feed at the same pace.
"We will need to ask questions about whether the money is making any difference to the outcomes that we want."
The government has already axed an anti-obesity programme for young people, saving almost $16 million and says it will review other health and education spending over the next few years.
There will be a reconsideration of the spending tracks.
His leader, Prime Minister John Key, was quick to point out though, that doesn't mean cuts.
"Yes the government is going to have to live with a lower level of increase but nevertheless it'll be an increase," says Key.
The health budget certainly has been increasing. Ten years ago it was just under $7 billion. It's now almost double the size, around $13 billion.
Health experts say there are serious consequences to tampering with that budget.
"It'll have a serious impact... It will seriously constrain the ability of district health boards to plan health services for the future," says Ian Powell of the Association of Salaried Medical Specialists.
Stung by what it calls the ferocity of the recession, the government has already re-prioritised $2 billion in spending and axed contributions to the super fund for the next decade.
"The depth and the speed of the global recession forced us to make trade-offs," says English.
Labour says he has effectively killed the super fund, claiming it will be short by $35 billion in interest and contributions by 2031.
"Not having us as baby boomers help pre-fund our superannuation is grossly irresponsible," says Phil Goff labour leader.
English says we're facing a decade of deficits and that leaves a
shadow hanging over all of our public services not just our health
and education.
Watch Bill English on Q+A, Sunday May 31 at 9am as Guyon
Espiner discusses the reaction to the Budget with him.
