An extraordinarily underwhelming budget
Despite the large numbers my feelings after reading it and the accompanying news reports is one of extreme disappointment at a missed opportunity.
The government is telling us that it will more than double the national debt to around $200 billion over the next few years and all we will achieve is to keep things unchanged.
In effect what has happened is that we have had decades of underspending in so many areas that we need to spend this money just to keep us where we already are or where we should have been.
New Zealand is in this situation because of two fetishes that both National and Labour governments adhered to.
One was that we can’t have any taxes that target capital gains or wealth more broadly.
The second was that we had to have budget surpluses every year to reduce New Zealand’s existing debt to ever lower and lower numbers.
The result was we would never have the income or ability to spend to the levels needed to maintain the infrastructure of New Zealand to the level it should be.
Health, for example, was at such a critically low level of preparedness for this pandemic that we were extremely lucky not to be infected to the extent the system was simply overwhelmed. Health Boards are saddled with billions of dollars in debt that they must pay interest on as a consequence.
What this budget seems to be doing is simply spending the money over the next five years that we should have spent over the last 20 or 30 years.
The problem with this strategy is that at the end, most people won’t notice any change to their lives.
There is simply no vision in this budget. There is no promise of a new, fairer, more egalitarian, more equal New Zealand where everyone pays their fair share.
There is no commitment to rebuilding New Zealand in a manner that allows us to genuinely address climate change.
The biggest chunk of money is actually being given to businesses as a subsidy for wages to keep people employed. That may be necessary as an emergency step. But many of these companies didn’t actually need the money or were low on capital reserves because they have done everything they can to enrich their shareholders above all else over the last decade. The government could have simply demanded that they be given 33% of the shares (voting or non-voting) as a condition of the aid to ensure that taxpayers benefited from the recovery.
The opposition will be accusing the government of taxing working people to pay for these debts without any real benefit. And that is how it will soon feel for many.
A crisis is an opportunity. The right-wing know that. Why will the so-called left never learn that. There is more to life than always trying to be a safe pair of hands for big business which is what Labour government’s around the world have been reduced to over recent decades.
We need a vision that puts the needs of working people and the plant at centre stage. Dare to dream!
..’ There is simply no vision in this budget. There is no promise of a new, fairer, more egalitarian, more equal New Zealand where everyone pays their fair share’…
——————-
Yes but I also perceive that many commentators about the budget are not looking at the potential long game : that is , if this coming ‘economic depression’ deepens,…govts worldwide will be forced to abandon their unorthodox neo liberal economic settings due to mass civil unrest. Unfortunate but true. They will be FORCED to use old alternatives that worked.
And the only solutions that worked towards bringing national economy’s back to a healthy footings were the principles expounded by John Maynard Keynes. In every nation that adopted them , it brought them out of the red and into the black on average , in six months.
Most of Europe and Japan adopted them , and the same results were to be had. The USA rejected them as too simplistic for a year, – then , -adopted them and the same thing happened , – out of the red and into the black in six months. That was what FDR’s New Deal was comprised of, – Keynesian principles. It was NOT FDR’s magnificent little brain who developed those solutions. It was the magnificent brain of Cambridge University’s economics lecturer John Maynard Keynes.
So ,… moving on ,… patience required,… we have to let these govts flounder and reach for solutions… hard graft for us at present, … but in the long game, power given back to the people by threat of mass civil unrest and economic meltdown.
I would say , this budget , is but a forerunner of initiatives yet to be rolled out. Again . patience required.
Thoroughly agree
There is so much more to play out here
Extraordinary = Extra + Ordinary
~ Zack Brandon 2020 ~
Well when the morons over at Farrars blog have no real issue with the budget other than the lack of a plan and the debt, you know it’s not a great Labour budget. Oh for the return of a proper leftwing budget, not just a National light one.
It is really very depressing.
Even a pragmatic economist is calling it out: Eaqub – Budget – Stingy Benefits Shows Politicians All the Same
If he can call it, then the ‘Left’ should be shouting down the walls. Yet there is generally silence. Shameful.
I think the silence is us dummies slowly realising that perhaps we’ve been had? Can’t decide, don’t want to criticize until understanding dawns upon us. How can we trust the Govt. to follow through when there record so far is very weak. Doesn’t look too flash to me. The way out is GROWTH and AUSTERITY. Bail out the big boys and stuff all for the struggling. Neo Lib may strengthen. MHO.
Whosoever expected something different from Jacinda and Grant was dreaming.
If Labour & Greens aren’t cutting it time for some new blood parties in coming election. Ever since demise of Alliance has been a need for an economic left party to the left of Labour. Hopefully TOP with Gareth gone gets some traction, also possibility of a comeback for Social Credit Party …but how about an actual Socialist Party. If all the extra-Labour leftists got shit together and put a socialist alternative forward maybe they’ll start getting some traction.
But many of these companies didn’t actually need the money or were low on capital reserves because they have done everything they can to enrich their shareholders above all else over the last decade. The government could have simply demanded that they be given 33% of the shares (voting or non-voting) as a condition of the aid to ensure that taxpayers benefited from the recovery.
– That’s about the most sensible paragraph I’ve read from a left-winger in a decade.
I find it as unbelievable and appalling as you do that this government is propping up the wealthy to keep businesses that should be viable anyway if not with these shareholders then sold and with others. Nowhere in that process does that require a slush fund of cash to prop up the current wealthy.
Who are laughing.
The biggest chunk of money is actually being given to businesses as a subsidy for wages to keep people employed.
The previous government left us a legacy of ‘ghost houses’, thousands of unused houses at a time when thousands of people were homeless. I am wondering if a legacy of this govt will be a plague of ‘ghost businesses’, possibly thousands of businesses that serve no real purpose, at a time when we will be needing all hands on deck to address Climate Change and a rapidly degrading and increasingly drought-ridden Aotearoa.
Totally agree that more could be done, and I think a total overhaul of welfare and taxation is required in NZ. However, those are big changes to the social contract, and I think Labour should go into the election with a vision and specific policies to debate, not announce them at a Covid-recovery budget.