Maiki Sherman: How Peters saved his ministry from sweeping Budget cuts

Maiki Sherman Maiki Sherman | 05-24 16:20

It has been 45 years to the day since Winston Peters first entered Parliament.

For the current Deputy Prime Minister that is an extraordinary length of time as a key player in New Zealand politics.

That experience and command was on full display today — a slight nod perhaps to the occasion, or more realistically a timely coincidence.

In a media release titled 'A balanced Foreign Affairs budget' it was announced the Foreign Minister's department had found $60 million in back-office savings. That money would be reinvested to support New Zealand's diplomatic presence in the Pacific.

It's the type of financial wizardry we can expect to see more of in next week's Budget.

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Public sector chief executives have been asked to perform the role of magicians, dusting off their hats and coming up with savings so the Finance Minister can pull out a bright new bunny as she reveals the Government books on Thursday.

While many will be pleased with the fluffy new showpiece, others will be wary of how it came about — financial trickery — that is repurposing current budgets. Labour has called it "smoke and mirrors".

For Peters, however, his dexterous manoeuvre is just as noteworthy.

At a time when almost every other Government department has been forced to make deep cuts of between 6.5 to 7.5% by running the ruler over their budget lines, the Ministry of Foreign Affairs has been left largely untouched.

Its back-office savings of $15 million a year over the forecast period equates to less than 1% of its overall budget. It's hard to think of many other departments or agencies that will enjoy such immunity.

There are two key reasons as to why the foreign portfolio has been so lucky — the first is Winston Peters.

Put simply, his influence carries a lot of clout.

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As a seasoned politician and coalition partner, he holds significant sway around the Cabinet table. It's also apparent he has good relationships with both Prime Minister Christopher Luxon and Finance Minister Nicola Willis.

As Peters has said himself, it's not his first rodeo.

It's also likely nothing would irk Peters more than reigning in New Zealand's strategic foreign diplomacy efforts in order to address a "broken economy" he says was left behind by Labour.

Jetlag be damned — Peters is a minister on a mission working the global circuit.

Which leads to the second reason behind his ministry's near exemption from savings cuts.

One only needs to look abroad to realise the challenging strategic context in which New Zealand finds itself.

The durability of the international rules-based system is becoming more volatile and an open trade market is less assured.

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When the coalition promised to "raise the energy" through international relationships in its current quarterly action plan many tittered at the idea. But for both the Prime Minister and his deputy it is no joke.

The current geopolitical environment is forcing New Zealand to reassess and rethink its foreign policy position. That means now is not the time to be scrounging around for significant savings and pulling back on the country's efforts.

At a time when other nations such as the US, UK, and Australia are all scaling up their foreign budgets, Peters maintained to at least hold the line on ours.

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New Zealand does not have the same economic might as other countries and will therefore never be able to fully compete in dollar terms. Instead, our strength lies in at least being present and working the room when we have it.

With more than four decades of political nous, Peters will know that all too well — which is why any major budget cut to his department was never part of his equation.

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