It has been abundantly clear from statements by the Prime Minister and Minister of Finance that departmental chief executives have not been permitted to engage in the traditional pre-Budget bidding war for additional funds; rather, they have been told to look to their own departmental funds to save money and find other sources for new spending.
In theory that is a sensible instruction, for government spending is well out of kilter with revenues, the recession has made the situation worse, and the National Party cannot fulfil its promises to cut taxes and state spending without slicing into the Clark government's social spending extravagance.
Past experience suggests, however, that when the knives must be wielded the easier targets are the first to be selected.
Is the Phoenix Centre in Dunedin such a target? This facility has provided special services to assist in rehabilitating intermediate and high school-age pupils who have proved to be unable to integrate into the education system mainly because of behavioural issues.
It is said to have been successful by the centre's staff and supporters, but there is an opposing view held by some educators and authorities.
No great sums of money are involved: core funding amounts to $142,000 a year, which, in the context of Vote: Education's $11 billion or so annual spending, is barely measurable.
But taxpayers insist - or ought to - that every one of their precious dollars should be spent effectively.
That means first-class supervision and evaluation of programmes; in the case of the centre no evaluation had been carried out, according to the ministry, since its inception, more than a decade ago.
By any measure that is simply not good enough.
When such a study was finally made last year and distributed to local principals, it argued that the measure of the centre's success was the reintegration of its candidates into the school system; on this basis just 7% of the pupils involved achieved that goal.
The report places much emphasis on the centre's failure to document progress with pupils so that measurable objectives could be established.
"The majority of the purported objectives," it said, "did not meet the criteria to qualify as a true objective."
While that may amount to bureaucrat-speak because the means by which a rational, statistically based evaluation could have been carried out did not exist, it is a serious matter if, in fact, there was no useful follow-up of pupils reintegrated into mainstream education.
The ministry is right to ask what worked at the centre and, more importantly, what did not work.
The impression is left - perhaps deliberately - that the fact the centre dealt with pupils schools simply could no longer tolerate meant schools supported its continuance without asking too many difficult questions.
Whether that is an accurate summary of the position, the centre will close at the end of this term.
What will replace it? After all, the number of "difficult" pupils with behavioural problems has not changed, and schools will be obliged to accept them and try to teach them.
Many teachers are rightly fearful of the impact this may have on classroom teaching and on other pupils.
The ministry says it will provide more support for schools to help such children, but virtually in the same breath talks of the "fiscal environment and budget constraints".
The centre's funding would be used either by the schools or the ministry to develop behaviour-modification services, it says.
There will be scepticism in Otago about this, and especially about whether schools - which are already hard-pressed to improve the education of low achievers - will be able to equal the specialist attention which the centre was set up and staffed to provide.
It seems there will be two possible outcomes from the ministry's decision: the returning of meeting the needs of such pupils to schools will be a success; or more children will be truants, and more will be suspended or even excluded from school.
A review in 12 months' time should determine which conclusion is correct, especially whether the ministry's new phoenix turns out to be more than a mere theoretical sop.
