Budget reflections – published 18 May 2023

Well, they promised boring, and they delivered. 

In our pre-Budget article we said the country needed boring, because long term physical and social resilience spend is boring, not flashy. But this Budget has been a different kind of boring. Fiscal softness, inflation and political realities have led our leaders to deliver a “same same” Budget that spends everything we have on standing still and recovering.

Given that fiscal position, bigger, braver commitments to “boring” long term physical and social infrastructure would require either borrow more, tax more or both. Instead, the fiscal outlook from Treasury and tone from the Budget is optimistic that better times are coming, with the implication that bigger longer-term spends will follow.

Chasing that perfect moment to invest in long-term resilience comes with risks. If climate change is teaching us anything as leaders, it should be that waiting for easier times is a trap.  If we try to pick the cycles and wait for the good times to do the hard, longer-term things, we might find the frequency of the shocks mean we never get to them.

Matt Prichard - KPMG NZ - Executive Chairman

Executive Chair

KPMG in New Zealand


Why our leaders must prioritise resilience, and we must reward them – published 9 May 2023

There’s a basic problem with expecting our leaders to prioritise resilience. Resilience is often invisible. Resilience usually doesn’t attract feedback. There are no standing ovations for the hidden strength needed to build something that lasts. Not many votes or accolades in the drudgery of maintaining something that is just ‘there’ all the time.

Resilience is invisible. Until it’s not. And when resilience is tested and fails, there are often credible and reasonable ways for us as leaders to deflect. “Who could have imagined?”. “Nobody could have predicted…”. “When we built it, we didn’t think...”.

As we face into the upcoming Budget announcement, and with an election pending, we’re looking to the leaders of our nation to provision for resilience. We’re looking to them to invest in the sometimes invisible groundwork needed to ensure the sustainability of our communities, our infrastructure (physical and social), and our climate response for a more prosperous Aotearoa in the years to come.

We’re already seeing the obvious challenges of building resilience into our physical infrastructure. Resources are limited. That’s life. So, faced with a decision to build a road engineered to withstand a 1:200-year storm event, or two roads built to a lesser standard (or an extra library, or waterfront precinct, or cycle lane) who can blame leaders for making those dollars stretch further? Faced with the choice of repairing and maintaining ancient invisible pipes that carry our three waters, or expanding and connecting new communities to that crumbling, invisible infrastructure, who can blame leaders for dealing with what’s visible?

The same is true of our social infrastructure. Demand for health services is infinite. There are never enough resources to meet the demand. Our health system has had its own ‘megastorm’. When it hit, we realised we’d been under-investing in its resilience. It was never built to have the capacity to deal with the deluge. 

Leadership for resilience demands something of all of us – not just the leaders. It requires us to understand and expect that our leaders need to invest in things that are invisible, and that those things will be there when we need them. We should recognise their wisdom and bravery when they tell us “This isn’t flashy, but it’s what we need to do for future generations”. We can incentivise and reward them if they’re in the private sector. We can hold them accountable if they’re public servants. We can support them if they’re our political leaders.

Ordinary leaders respond to the signals we give them. Great leaders, leaders who understand the necessity of resilience, do the hard, dull, and sometimes unpopular things. Things we don’t necessarily see or give any thought to…until we happen to need them.

About the author

Matt was appointed Executive Chair of KPMG New Zealand in 2020. His career with the firm spans almost 30 years, and he passionately believes in KPMG experts using their professional skills and energy to make a difference in our communities. Matt helps lead the firm's work with Māori and undertakes a range of advisory and audit work for financial institutions and other clients.

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