The Government is going to cut back the $800 million of new spending it initially intended to put in the May budget and ministers are being asked to find ways to save money, Prime Minister John Key says.
The Government is going to cut back the $800 million of new spending it initially intended to put in the May budget and ministers are being asked to find ways to save money, Prime Minister John Key says.
Asked today on TV One's Q&A programme whether the Government was still going to spend that much because of the cost of rebuilding Christchurch, Mr Key replied: "I think the answer to that is no."
He said more would be spent on health and education.
"That may well be in the order of $600m, 700m, 800m," he said, but ministers were being asked to look at reducing expenditure in other areas so money could be reprioritised to pay for more in health and education.
Mr Key said the Government's options were very limited.
"We've inherited an earthquake, we now have to deal with that," he said.
"We are going to look very carefully and say `is there expenditure that we think is not as important today, in the situation New Zealand now finds itself?'.
"And the answer to that is yes, there is expenditure that we can redirect to health and education."
Mr Key said every minister was going to have to look at their department and come back to Finance Minister Bill English with proposals.
But whatever was finally decided, vulnerable people who relied on government services would continue to be protected.
Mr Key said the Government would go ahead with welfare reform but it would be "sensible" when dealing with people in Christchurch.
