The Budget Process in New Zealand: Has Proportional Representation Made a Difference?

Abstract

In New Zealand, as in most countries, the budget is at the heart of the political process. This paper examines the impact of the introduction of a mixed member proportional (MMP) electoral system in the mid-1990s on budget decision-making by focusing on two dimensions. First, it seeks to compare the budget process across five distinct periods of government. Second, it examines changes to two distinct stages of the budget process: the executive phase and the legislative phase. The evidence suggests that the move from single-party majority government to other governmental forms has made the formulation of the budget a more open process, and has increased the number of actors involved. However, Treasury ministers remain dominant, while the primary cabinet cleavage continues to be between them and spending ministers, rather than between coalition partners or between those partners and parties providing support on confidence and supply. To date, there has been no significant change to the legislative phase of the budget, little recourse to the financial veto provisions, and no serious threats to the capacity of governments to secure parliamentary endorsement for their budgetary intentions.