The long race to the Budget finish line

More than 110 days since Budget Day, this week the government was still in the process of finalising Parliament's approval to spend the cash.

The use of public funds is something that is treated with rigorous scrutiny, and rightly so. Whether it is for past spending, current spending, or future spending, Parliament is constantly dissecting the government's public finance decisions.

'Budget' doesn't just refer to a spreadsheet. It's more of a handy catch-all phrase for the collection of processes and pieces of legislation involved in government funding.

You're probably familiar with Budget Day and the theatrics that come with it. That day kicks off the legislative trajectory of the Appropriations (Estimates) Bill, which is the main bill of the budget.

'Appropriations' is finance lingo for the authorisation of government spending. Because the Budget is forward-looking, the word 'estimates' is used, because Budgets are an approximation of what the government expects to spend.

The Budget is legislation but its process is not typical. There is no first reading for it, because the need for it is broadly agreed by all parties. When the Minister of Finance makes the Budget Statement, that initiates the second reading - the eight-hour Budget Debate, with the prime minister and party leaders getting first dibs to speak, before lower-ranking MPs take the floor.

That debate can take a few weeks due to interruptions. But, even before it is done, the Budget has already headed to the next legislative stage.

The Appropriation (2025/26 Estimates) Bill, like all Budgets, was sent to the Finance and Expenditure Select Committee for consideration. Because the budget transcends so many different portfolios, the Finance and Expenditure committee delegates the consideration of its various 'votes' to a relevant committee. Votes are the individual spending proposals of specific areas, for example Vote Transport, Vote Health, Vote Education and so on.

One of the core processes in this select committee scrutiny is the Estimates Hearings, when ministers and ministry officials are cross-examined by MPs. After a change to Standing Orders in 2023, Parliament now pauses House sittings to allocate an entire week in June to these hearings (Scrutiny Week).

Hours and hours of questions and answers from the Estimates Hearings are subsequently condensed into a compendium of select committee reports, which are then reported back to the House.

Which brings us up to date, and this last week when those reports were considered across 11 hours, in a House event called the Estimates Debate. This event combines the purpose of a second reading (considering committee feedback on a bill), with the structure of a Committee of the Whole stage (when ministers are questioned).

Instead of considering a bill clause by clause (the usual committee stage procedure), the Estimates Debate is broken up into ministerial portfolios. Ministers take turns sitting at the table depending on the topic, and take questions from MPs about budget plans in their portfolio area.

Each portfolio within the Estimates Debate begins with a call from the chairperson of the relevant select committee. These introductions have a prescribed purpose: to reflect on their committee's report on the Votes relevant to the portfolio being considered, and shouldn't be political - though there tends to be one or two committee chairs who need reminding of this by the presiding officer.

The 11-hour Estimates Debate must wrap within four months of Budget Day (22 September), so Parliament dedicated most of the week to it, and got it wrapped up by midday on Thursday.

Which left just the third (and final reading), which was also quickly polished off on Thursday afternoon. The Budget is finally approved.

You might be scratching your head and wondering, if government spending takes this long, how have they been spending any money in the meantime? That's where Imprest Supply Bills come in. They actually approve the cash flow, and allow the government to spend the money intended until the main Appropriations Bill is approved.

The job isn't done there though. The government will now need to validate unplanned spending from the previous Budget (the Supplementary Estimates Bill), and confirm up the final books from the the year before that (the Confirmation and Validation Bill), all while beginning the process of planning for next year's Budget (which takes form as the Budget Policy Statement).

RNZ's The House, with insights into Parliament, legislation and issues, is made with funding from Parliament's Office of the Clerk.

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