Friday, February 20, 2009

MfE's budget "hole"

Since the election, the government has gone to great lengths to blame its predecessor for the cuts it is making to government programs and departmental budgets - for example by accusing them of failing to allocate funds for its promises (an accusation thoroughly refuted by David Cunliffe in Question Time on Tuesday). This morning's Herald piece about possible job cuts at the Ministry for the Environment seems to be part of this campaign, with Minister for the Environment Nick Smith blaming Labour for a $20 million budget "hole":

Environment Minister Nick Smith said job cuts were inevitable if the ministry was to keep within its 2009-10 budget of $56 million set by Labour - down from $75 million in the 2008-09 year.

Dr Smith said it was too early to know how many jobs would go or which programmes would be cut. But spending priorities would include climate change, work on water issues and waste management.

A ~30% budget cut in a year is unusual, to say the least, so I checked out the 2008/09 Appropriations for Vote: Environment [PDF]. And it turns out that Smith's "cut" isn't all its cracked up to be.

Firstly, the numbers (which, as usual, Smith is wrong about): In 2008/09 MfE was voted $85.3 million. In 2009/10, it will get $64.7 million - a gap of $20.6 million. But that's a little deceptive, because as the graph below shows, 2008/09 was an unusual year:


So, the truth is that MfE's 2009/10 budget will be about the same as its 2007/08 one. As for Nick Smith's "cut", it seems to be composed almost entirely of one-off expenses and inter-year transfers: $3 million in capital expenditure, another $3 million for policy advice on the Waste Minimisation Bill (a member's bill, so not part of their normal work programme), and a massive $8 million due to an interyear transfer of funding for the cleanup of the Tui Mine. Another $1 million for policy advice on that mess, $1.5 million for other cleanups, half a million for policy advice on trade agreements (which means the China FTA), and half a million for RMA call-ins, and most of the "cut" is accounted for. Of the remainder, $1.8 million is due to a fluctuation in the funding the Rotorua Lakes Restoration project. Which leaves a $0.8 million difference of actual program cuts as various projects expire - par for the course, and certainly nothing to get excited about.

Meanwhile, I'm wondering how Smith is able to get away with spouting this shit. I've been told that the first rule of journalism is to check your sources, and if your grandmother tells you she had soup for lunch, you don't report it unless you have two independent witnesses who can be quoted on it. But the Herald's journalist seems to have failed to bother to check the Budget documents to verify Smith's claims. I guess it's just too much hard work...