By all accounts this is one tough Budget round as new Ministers find that their promises and hopes are having to be trimmed back by a Finance Minister advised by a Treasury whose Secretary says some tough decisions are going to have to be made.
So Budget Day may be the day when some of the euphoric air comes out of the Government balloon.
Yet Finance Minister Grant Robertson seems unphased. As he is by a recent speech from Green co-leader and partner in Government James Shaw which subtly suggested the Government ultimately had no long-term plans; no real idea of what sort of legacy it wanted to leave behind.
Robertson dodges both questions adroitly.
He doesn’t think the pressure on the Budget round is inconsistent with every Budget round.
“We are an ambitious Government with a lot of plans; we have a lot of Ministers excited about getting on with what they want to do.
“But I don’t think that is a bad thing.
“The reality of the Budget process is as it always has been.”
He is more precise on the ambitions for the Government and what its legacy might be.
“My goal for the 2019 Budget is to be able to showcase that as a wellbeing Budget.
“By the time we get to 2020 we shoul measure our success as a country . not just as a Government, against the progress that we are making in improving people’s social well being; health, poverty reduction, increased rates of home ownership, all of those well-being measures which are currently being developed.
“I want them to be used for how we prioritise spending and how we measure our success.
“We will still measure all of those fiscal indicators. They are important.
“But if they stand alone, a Budget time in particular, then we won’t have been doing our job.”
What this raises is what appears to be a gap between Robertson and the business community who by and large much prefer to deal with tangible economic indicators when it comes to measuring how the Government is doing.
As a politician, Robertson is not given to conceding ground, but he comes close to agreeing that this is a problem.
“I feel the need to continue to build the relationships with the business community.
“There are perceptions around a Labour Government which Michael Cullen has talked about in the past.
“You know, it doesn’t matter how successful you are, some of these perceptions exist.
“That is the reality.
“All I can do is get on with explaining our programme; listening to people about their concerns and doing hat we can to address them.
“So I am feeling quite positive about that.”
But he is emphatic that his Government is setting out do things differently.
“The way we measure success in the economy, the focus around child poverty, moving more into the sustainability space, looking more into those productivity measures so I am feeling good about.
“But I recognise the overall point, it is quite clear that the perception issue is there, but I think underlying business confidence in their own activity is good.”
There is another question about the credibility issue that a Labour Finance Minister faces with the business community, and that is whether they don’t feel pressured into being ultra-orthodox, that ironically a National Minister might well have more room to offer up radical solutions.
One area where already there are questions about how orthodox this Government is, has come with its continuation of National’s 20% debt- to-GDP target, albeit that Labour are giving themselves another two years beyond National’s 2020 target to get there.
(The most recent OECD figures, for 2015, show that New Zealand’s debt ratio of 38.1% was the fourth lowest – behind Estonia, Luxembourg and Australia. Were we at 20% we would be the second lowest, behind only Estonia.)
The Herald’s Economics Columnist, Brian Fallow, has this year consistently questioned Ministers about that goal, asking whether it isn’t too tight.
That question is also quietly being asked by some of Robertson’s colleagues.
The problem is the acute pressure that is on the Government’s capital budget.
It would seem that is one reason why so few details are yet available about how the $1 billion Provincial Growth Fund will work though some news is expected next week.
Robertson is adamant the fund will happen.
“It’s a cast iron commitment in our coalition agreement.
“We are working through with Minister (Shane) Jones and others the exact criteria; what is included what’s not included.
“Obviously some things were already written into the coalition agreement.
“So some of it is precast.”
But how will the Government find $1 billion and where will the money come from?
Robertson says officials are working through the exact mix of operating and capital expenses at the moment.
What about using external capital?
“I know that Minister Jones is keen to see the fund work towards that.
“Obviously we have got to get it up and to run and look att he projects that are there.
“But he certainly wants the space for that to happen.
“We definitely see it as a series of partnerships.
“We don’t want this to be a Wellington driven fund.
“We want it to come from the regions themselves; from local Government and businesses in the regions.
“Where there are some good possibilities of joint ventures or partnerships with other bodies, I think we need to leave the space for that.”
Robertson has to tread carefully here because the Government has already ruled out using public-private partnerships for schools and hospitals, a move that will add more pressure to the capital budget.
Paradoxically Robertson is talking enthusiastically about innovative funding for transport projects like those proposed for Auckland including picking up the previous Government’s enthusiasm for value capture by targeted rates.
As Finance Minister his term is going to be dominated by two big bills; one will be the operating expenses required to deliver the well being he is so keen to showcase by 2020, and the other will be for the infrastructure projects left behind by the previous Government.
This is all so finely balanced that any recession or slowdown could prove fatal.
His next three years are going to be spent walking a fiscal tight rope.