As all the lobby group shouting fades in the wake of the budget, how is the real verdict shaping up ?
If from the Labour camp, you’d say it was a financial triumph, balanced but with a bold vision. And, as Sir Michael Cullen asserted, there is “a real degree of bravery” in the benefit increases.
According to Sir Michael, Finance Minister Grant Robertson
” .. has done a superb job in writing a budget which balances present and future needs, begins to address our social inequities and provides a solid foundation for future sustainable growth”.
For Sir Michael, this is just the beginning: he sees this as the first part of a trilogy of budgets. Roll on the other two!
On the other side of the fence, the drumbeat was a bit more discordant. The praise certainly was not quite so fulsome.
National’s Judith Collins noted Robertson’s capacity for what she saw as flamboyant promises, and a failure subsequently to deliver, from his previous budgets: $2bn for KiwiBuild, $1.7bn for mental health, $3bn for provincial growth.
“They’ve got a lot of debt but not much else”.
This was a theme for others from the National camp.
One-time National finance minister Steven Joyce focussed on the “heroic assumptions” underpinning the budget and contended “we need a lot of things to go right for this budget to play out in reality”. And he questioned the treatment of those who Labour once called the “squeezed middle”.
These are the people on low and middle incomes who are doing the right thing by working hard to support their families and who are at the sharp end of electricity price increase, rates rises and the like.
“They have been completely ignored in this budget, in favour of those who don’t work or are unable to do so”.
As Point of Order sees the budget, the government’s policy aims to “level up” the standard of living within NZ, but offers no theory on how this can be done, except by printing money or redistributing it. Economists have underlined the problem of weak productivity growth, and nothing the government proposes will do anything to stimulate that growth. Meanwhile NZ is falling even faster behind the living standards of other advanced economies.
ACT’s leader David Seymour rubbed salt in this particular wound by pointing to the government’s mounting debt, taking it on at a rate of $100bn, so that NZ’s average household will have $95,000 in government debt to their name.
Seymour ridiculed what he sees as Robertson’s idea on economic development as being a government-sponsored train factory in Dunedin.
“I mean, what’s the theme song for this Budget? Something from the 70s, is it going to be Led Zeppelin—Mr Speaker, you might know, did they do Dazed and Confused? He said they did. That should be the theme song for this government’s budget, because they want to take us back to the 70s. Their idea of economic growth is a train factory sponsored by the government and Dunedin. Even in Pyongyang, they are not taking on policies like that”.
Seymour describes it as as a 1970s union fantasy that men will be working away with hot steel and sledgehammers, banging together locomotives and wagons in a big warehouse in Dunedin.
”This is the government’s idea of innovation! And it might be OK if people were actually going to use the trains, but has anyone heard of that initiative where thousands of people go up and down and commute between Hamilton and Auckland every year, every day? Actually, every year is about how often. Thousands of people a day are on the train between Hamilton and Auckland commuting to the future! Has anyone heard about those thousands of people? No, I haven’t either. Even John Campbell’s not taking that train any more”.
ACT offered its own ideas for an alternative budget: middle New Zealand, those who are being squeezed with rising electricity prices, rising rents, rising food prices, the people that need some relief, will get a 17.5% tax rate all the way up to $70,000 in an ACT budget.
“ We’re going to cut that middle income tax rate from 30% down to 17.5%. And for middle income families who work for a living, that means you get $1,200 to $2,100 a year more in your pocket through working. That is the ACT Party idea of an alternative budget.
“But we’re also going to reduce wasteful expenditure, stop handing out money to groups of voters that the government thought it could curry favour with and actually do something—here’s radical—for the next generation, the silent people, the ones that can’t vote in this election or for this budget, but the ones that are going to be lumbered with the debt as interest rates rise and borrowing $100bn, retrospectively, didn’t seem so smart.”
ACT’s alternative budget, offering options which focus on raising living standards, may not immediately appeal to voters still living under the Covid shadow, but could increasingly draw in those in the beleaguered middle income groups fighting to hold on to a standard of living to which every New Zealander aspires.