While Budget Day is a cornerstone of the Parliamentary calendar for many politicos, there is a lot of work that goes on before, during and after Budget Day that is equally important.
Before Budget Day
The start of the Budget actually happens almost a year before it is delivered. Setting the strategic priorities and targets for spending, revenue, surplus and debt intentions starts as early as June the year prior to a Budget. This can be referred to as the ‘strategic phase’ of the Budget, and this phase is completed with the publication of the Budget Policy Statement (BPS).
Given the formation of a new Government late in the calendar year, Minister of Finance, Hon. Nicola Willis, delivered the 2024 Budget Policy Statement on 27 March - well within the official deadline for publishing a BPS.
Usually published in December (but not required to be tabled in Parliament until 31 March at the latest), the BPS sets out the Government’s priorities and objectives for the forthcoming budget. Once published, the Finance and Expenditure Select Committee has 40 working days to scrutinise the BPS and report back to the House, which then has a two hour debate on the statement and the select committee report.
During this time, Ministers are preparing budget bids - these bids include initiatives relevant to their Ministerial portfolios, which are assessed by the Treasury and considered by ‘Budget Ministers’ (usually the Prime Minister, Minister of Finance and Associate Ministers of Finance), who collectively propose a Budget package to cabinet.
This is also usually when the Opposition starts to question Ministers in the House on what they are proposing, hoping to get a sneak peek at certain budget initiatives or score political points by uncovering proposed budget cuts. This to and fro only intensifies as the Government makes pre-Budget announcements of their key initiatives, with Ministers' responses to questions becoming more guarded as we get closer to Budget Day ("only one sleep to go!")
On Budget Day
At 2pm on Budget day, the Minister of Finance delivers a speech (officially called the Budget Statement). This speech outlines the Government’s spending plans for the year ahead, and marks the beginning of the annual Budget debate, which lasts for up to 8 hours (on top of the Budget Statement, for which there is no time limit).
The former Minister of Finance, Hon. Grant Robertson, had an annual tradition of having a cheese roll on Budget day (being the Southland boy that he is) and would be gifted a new tie by the Prime Minister to wear while delivering the budget. Before him, Rt Hon. Bill English opted for a pie. We'll soon find out what, if any, Budget Day rituals will be set by new Finance Minister Nicola Willis.
The Minister of Finance also introduces an Appropriation Bill, which is the Government’s way of asking Parliament for the money it needs to fund their plans for the year ahead. Estimates of Appropriations are presented alongside the Appropriation Bill, and detail how much money is planned to be spent. These Estimates are the focus of financial scrutiny by Select Committees.
Given the length of the Budget debate, it is common practice that the debate is taken under urgency, meaning where Parliament normally rises on a Thursday evening, in Budget week, Parliament will often sit on Fridays (and sometimes into Saturday) to allow enough time for the Budget debate to take place. And thanks to the quirks of Parliamentary time, Budget day can last two or three calendar days!
After Budget Day
All Estimates are distributed amongst Parliament’s select committees, where MPs often question Ministers and officials on the detail of their spending plans. Select Committees have ten weeks to examine their Estimates, question Ministers and public sector leaders, and report back to Parliament.
Following the Review of Standing Orders 2023, two ‘scrutiny weeks’ were introduced to the Parliamentary sitting calendar: one for annual reviews of government departments and agencies, the other for Budget Estimates. The House does not sit during these scrutiny weeks, to give select committees more time to scrutinise the Government’s spending plans (in the case of Estimates scrutiny week) or conduct in-depth annual reviews. This year’s Estimates scrutiny week will be held from Monday 17 June to Friday 21 June.
National MP for Kaikōura, Stuart Smith, is the Chair of Parliament's Finance and Expenditure Select Committee, with responsibility for shepherding the Estimates through their select committee scrutiny and back to the House.
Once select committees have reported back to the House on their respective Estimates, an 11-hour Estimates debate is held by sector, instead of individual Estimates, so the debate can take a broader view of what is planned for each sector.
Finally, the Appropriation Bill needs to be passed within three months of Budget Day, so once the third reading of the Bill is concluded, the Budget has officially been agreed to and the budget process is complete - until the next year of course!
Jesse is an experienced political strategist, and has delivered training workshops on transformative change-making and the creation of compelling campaign narratives in both Europe and South-East Asia.