No, we don’t expect perfection from the Govt – but a considerable advance would be welcome

Prime Minister Jacinda Ardern, back  in   January, told the Labour caucus 2019 would be a year of “delivery” for the government.

Ardern then said 2018 had been a year where the government had set up the “infrastructure” for serious change and pumped money into health and education. 2019, by contrast, would be more focused on delivery.

And, yes,   she has  delivered:  a  huge backdown  on  a capital  gains tax.

And yes, a  stunning  failure  on its  Kiwibuild  programme.

Yet  commentators  see the CGT outcome  as  something of  a  political coup.

Pattrick Smellie,  in the  Dominion-Post,  insists  Ardern  “showed leadership” on the CGT  and  Matthew  Hooton in his  column on politics in the  NZ Herald  says “The  PM’s  absolute rejection of ever reconsidering  a new capital gains tax  sets her up   for an overwhelming election triumph in 2020”.

So  Labour   supporters probably  think the  $2m  cost of the  Tax Working   Group  was  money  well spent.  Even  Sir Michael Cullen, with his  $1000 a  day  for writing  the report,  is probably  having a  quiet smile  to himself.

The  capital  gains   tax,  New Zealanders  had been  told  earlier,  would  form  part of the   “transformation”  the government  planned  for  the economy.  It was  going to make the tax system  “fairer”,  a step on the way  to  reduce  inequality.

So  without   a  CGT  does the   government  still  plan a  “fairer” tax  system,  and how  could that  be  achieved?.

Neither  of those  objectives   appear   top of the  mind  for  the Finance  Minister  Grant Robertson.  He has been   telling  his followers that improving the wellbeing of current and future NZers will be the focus of Budget 2019.

“The Coalition government is doing things differently. We want a wellbeing focus to drive the decisions we make about government policies and Budget initiatives. This means looking beyond traditional measures – such as GDP – to a wider set of indicators of success.Under the government’s wellbeing approach, the development of Budget priorities represents a new way of working and of thinking about how we develop our priorities as a government, and measure our success as a country”.

He  says  five priorities for the Wellbeing Budget  have been identified, using the Treasury’s Living Standards Framework (LSF), evidence from sector-based experts and the government’s science advisors, and with collaboration among public sector agencies and ministers.

The five Priorities for Budget 2019 are:

– Creating opportunities for productive businesses, regions, iwi and others to transition to a sustainable and low-emissions economy

– Supporting a thriving nation in the digital age through innovation, social and economic opportunities

– Lifting Māori and Pacific incomes, skills and opportunities

– Reducing child poverty and improving child wellbeing, including addressing family violence

– Supporting mental wellbeing for all NZers, with a special focus on under 24-year-olds.

Robertson    throws   in a  cautionary  note:   it  can’t  all be  accomplished  in a  single  budget.

And if  the  economy    were  to hit  the wall,  New Zealanders  might  see  the  well-being  the government seeks  fading  even faster than the  CGT.

But the Finance Minister is  confident    about  the  economy.

Strong economic fundamentals and sustainable economic growth remain integral to NZ’s success but they are a means to an end, not an end in themselves. We are widening our Budget focus to look at the wellbeing of our people, the health of our environment and the strength of our communities”.

As  the Prime Minister said   back  in January:

“We do not claim perfection but we do claim a considerable advance on where we have came from.”

Let’s hope   those  words   don’t  come back to haunt  her.



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