Tomorrow’s Budget announcement is expected to bear largely good news
for New Zealand business, law firms included, particularly when it comes to the education and employment sectors.
Russell McVeagh CEO, Gary McDiarmid, says the expectation, overall, is that there will be a heavy focus on maintaining stability and fiscal responsibility as a platform to encourage business activity, job creation and economic growth.
“A positive, no-unpleasant-surprises budget and economic forecast can only be good news
for business confidence and investment,” says McDiarmid.
The Prime Minister on Monday said that there would be an additional $1 billion spent in the year ahead, which is consistent with fiscal prudence. “He also indicated the forecast was for a budget surplus over each of the next few years,” says McDiarmid.
It seems likely the budget will provide for increased investment in education and health, and more parental leave. The Government has already made pre-Budget announcements regarding funding for apprenticeships, education and training towards the rebuild in Christchurch.
“As with past years under the National-led Government, we can expect to see some potential savings from changes to student loans and allowances,” says Chen Palmer principal Marina Matthews. “We can also expect to see more funding for those young people who are not in education, employment or training. However, most of the big-ticket items for education will be in the schooling sector around the roll-out of the Government’s ‘Raising Achievement in Schools’ programme and the introduction of Executive Principals, Expert Teachers, Lead Teachers, and Change Principals.”
In terms of employment, the Government has already indicated likely changes to the provision of paid parental leave. According to Chen Palmer senior associate Claire English, although it has repeatedly indicated its view that Labour’s push for 26 weeks’ paid parental leave is unaffordable, an increase from the current 14 weeks to around 18 weeks, to match that provided in Australia, is quite possible.
“The government has continued to slowly progress two significant bills – the Employment Relations Act Amendment bill and the Health and Safety Reform Bill and the wider implications of these bills if and when they are passed into law will be significant in the long run,” says English. “Neither of these two bills calls for significant new government funding at present. We could see a modest increase in funding for Work Safe NZ as it continues to prioritise education, investigations, and prosecutions in the health and safety arena, and maybe even more support for Labour Inspectors attached to the Department of Labour.”
Matthews and English both believe that the Budget will have a major impact on their clients.
“We closely watch funding allocations in the education sector and we are always interested in the overall total spend and savings for the sector, as well as the specific breakdown of funding and how this reflects the priorities signalled by the government,” says Matthews.
“This is election year, so it’s important to be aware of the wider political context that the Budget exists in and how that affects the likelihood of actually seeing the expenditure,” says Matthews. “There are a wider range of political, funding, policy and legislative factors to consider in election year. Budget Day is one of the factors to stay on top of.”