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.