New Zealand finance minister tightens the belt for first post-Covid budget | New Zealand

After two years of big spending to weather the storm of Covid-19, New Zealand’s finance minister is tightening the belt, committing to limits on borrowing, introducing new debt caps and looking ahead to long-term spending on infrastructure over short-term cash injections.

The finance minister, Grant Robertson, gave a glimpse of the vision for New Zealand’s post-Covid economy in his first major pre-budget speech on Tuesday. This year’s budget will also help set the political scene as the country heads towards a 2023 election.

The finances will not be announced until 19 May, but Robertson’s initial outline indicates that if the past two years of spending were branded the “rebuilding” and “recovery” budgets, then this year’s could perhaps be dubbed the “rebalancing” budget.

“As we move to a new normal post the peak of Covid, it is the right time to resume a set of fiscal rules to carefully manage costs while planning for the future,” Robertson said.

Robertson said it was the fourth budget the Jacinda Ardern-led government had put together using the “wellbeing approach”, which includes a broader range of outcomes including human health to assess policy success and which first grabbed international headlines in 2019.

With rising inflation and the ongoing disruptions from Covid, supply chain issues and the war in Ukraine, this year will run at a deficit, with the next surplus expected in 2024-25.

Robertson announced that once surplus is reached, the…