Public service pay will get scant lift from Robertson – but let’s see if the Budget can keep govt’s poll support in the clouds

The  Ardern   government  is  cruising  along with  poll ratings  still far  above those of  its  opponents  and a  leader   enjoying  almost cult  status.

Her  deputy, Grant   Robertson,  wears  a  matching  suit  of  political  armour,  although one-time Labour  Minister (and then ACT  leader) Richard  Prebble contends  he is   the worst  finance minister  since  Rob Muldoon.

Until  now  the  government  has  been borne   along   on  a  cloud  originating  in  the successful  deflection  of  the  Covid  pandemic.  Its  policies  have  escaped   any   deep  scrutiny from  mainstream media,  partly  because of  preoccupation  with  the  pandemic,  and  partly because of  the  teflon  aura surrounding Ardern.

Even   when  there  is a  stumble,   as  happened this  week with her  speech  on NZ-China  relations  and  the  latest  chapter  in the  Mallard story, she  is  within hours  back  on  her  cloud. But   now  the  rubber  is  beginning  to  hit  the  road.  As  Robertson  told  a  Wellington  audience  this  week,  NZ is  still  at  a  difficult period in  the  recovery  from  Covid.

What  this  means  will be  spelt out more fully in the  Budget,  but  already  the  first  signals of  a  reimposition of  fiscal responsibility rules have provoked  shrieks  of  rage. Public  service unions  are  incensed  that  ministers have imposed  a  three-year  pay  freeze.

How  can  this  be,  they  are  demanding, when hospitals are short of  doctors  and  nurses,  when  schools  can’t  find enough teachers?

Then  there  is  the issue  of   the  $926m  found  by  ministers  under prodding  by Robertson that had been  earmarked  for Covid  projects  but unspent.

Now  there  is  going  to  be  “delivery  unit”  in the  Department of Prime  Minister & Cabinet, with  Robertson in charge, to  check  on   how  critical  allocations  are  spent.  Does  this  make  individual  ministerial  responsibility  redundant?

Robertson  talked this  week  of  how his  three Budgets this term will seek to make “significant progress in addressing foundational challenges in our economy”.

Hello,  what  are  these  challenges?  Surely NZ  came through Covid  better than  most other  countries?  Where’s  the “resilience”   in the  economy he  keeps talking about?

Well, there’s  the “housing”  challenge, which involves soaring prices and more homeless people. Robertson  says  turning   around a  housing crisis decades in the making  will take  time

“… but we are committed to improving affordability and accessibility of housing”.

Then  there is  the “pivotal moment” in the transition to a low-carbon economy.

 “Almost every sector of our economy is affected by the carbon budgets that have been outlined by the Commission”. 

Robertson  will  detail

“ … our approach to meeting the targets we have set, but we will continue to look for not just the measures we must take to reduce emissions but the possibilities and opportunities that exist to create high-paying and sustainable jobs as we make that transition”.

 Good-oh  then.

And  did you  know  good progress has been made in the area of child wellbeing, with more than 40,000 children lifted out of poverty since Labour got into office using the after-housing costs measure?

Robertson followed  that  up  with  his  favourite  phrase: “there is of course always more to do here”.

Health? Well,  the  Ardern team is  modernising the  system to “ensure quality services are provided” wherever we live in NZ.

“From a fiscal perspective Budget 2021 will continue our careful and balanced approach. The levels of debt that we have taken on to save New Zealanders’ lives and livelihoods are projected to reduce from the middle of the decade. We are in a good position to handle the debt we have taken on”

So  those    who  thought  Robertson  would  repeat  the  big  $50bn  spend-up he  embarked on  last  year could  be  in for  a  rude  shock.

Although NZ’s current levels of net debt are slightly below 22% of GDP  Robertson is  warning:

“It is sensible that we look to reduce our public debt as the economy returns to full health”.

There’s not  much  prospect, then,  either  of  tax  cuts  or big  rises  in  welfare benefits.

It  looks  as if  the  best  New Zealanders  can hope  for in  this  budget  is  there won’t be any turn to austerity. The state-sector wage  freeze  nevertheless will make  it feel very austere  for  many thousands of workers.

Robertson  says Budget 2021 will still be a COVID Budget.

Will  it   be  good  enough,  then,  to  sustain  the  government’s  high  poll ratings?

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