How our present and future needs have been balanced – by lumbering each household with $95,000 in govt debt

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.

2 thoughts on “How our present and future needs have been balanced – by lumbering each household with $95,000 in govt debt

  1. By year’s end Middle New Zealand will be emigrating to Australia by the plane-load, accelerating Labour’s ambition for New Zealand to become the Cuba of the South Pacific.

    Liked by 1 person

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