Dr Bryce Edwards’ NZ Politics Daily Political Roundup: A Conservative Budget for volatile times
Finance Minister Grant Robertson has delivered a Budget that will many asking “Is that all there is?” There is a myriad of initiatives and there is increased spending, but strangely it doesn’t really add up to much at all for those hoping for a more traditional Labour-style Budget.
The headline $350 “Cost of Living Payment” for some lower-income New Zealanders will be well received as at least doing something to ameliorate the impact of inflation. But it won’t go very far, and a Labour Government might be expected to do more for those at the bottom during a crisis.
The lack of other bolder initiatives will also have progressives scratching their heads about what the Government is up to and why they aren’t doing more.
Of particular surprise is the Government’s announcement that the other cost of living package measures, such as the fuel duty reduction and half-price public transport, are soon to end. Instead of being extended or even made permanent, these are only going to be extended by two months. This is a major blow to progressives and environmentalists who assumed it would be either extended indefinitely or transformed into an entirely free public transport package.
Yes, Robertson has found a few million to make the reduced public transport fares permanent for Community Services Cardholders, but this is mild stuff for those looking for a bigger initiative than a targeted fix that won’t really have a huge impact on reducing emissions.
The Government promised that this Budget would be focused on climate change, but there really isn’t anything in this to give much confidence that this Government is serious about tackling the problem. After Monday’s very poorly-received announcement from Climate Minister James Shaw, this will further dent confidence that Jacinda Ardern’s so-called nuclear-free moment in emissions reductions is really going to happen.
The Government has worked hard to try and find some initiatives to make up for the lack of substantial Labour-style initiatives, deciding to announce their response to the Commerce Commission’s supermarket study – with plans to legislate to stop the current duopoly from stifling competitors from getting land to build new stores.
This is something of a fake Budget initiative – it’s not about budgetary and fiscal policy, despite the Government putting a price tag of $11m on the change. Although it will be a welcomed regulatory change, which will hopefully lead to lower prices, by including this in the Budget it shows just how desperate Labour was to find some boldness for today’s announcements.
Even when it comes to health spending, there really isn’t too much of interest in this Budget. There’s the extra spending of $11bn, but this is mostly just to make the new health reforms work by paying off the debt of the district health boards that are being disbanded. The Government is choosing to make a virtue of this necessity, but it hardly shows vision and adds any real capacity to hospitals. It is mostly money that has already been spent by health boards after decades of government (National and Labour) underfunding.
Similarly, millions more are being spent on housing, but although this looks like significant new money, it’s really just to keep the current government building programme going.
There are other progressive initiatives around reform of child support benefits, more insulation retrofitting and heating of homes, and improved for dental health funding for those on low incomes. But these are hardly radical or very large.
As a sign of how mild the Budget really is, it’s worth trying to locate any particular initiative that would be totally out of place under a National government. Certainly, it’s not that hard to imagine Bill English or Nicola Willis delivering this Budget. It’s hard to see any one particular Budget spend that a “compassionate conservative” or electorally-minded National government couldn’t have signed itself up to.
Yes, National will find plenty of rhetoric to throw against this – perhaps on levels of debt, spending, or even on the targeted Māori spending in health, but it’d be hard for Christopher Luxon or Nicola Willis to build up much enthusiasm for criticising what’s been announced.
Even the name of the Budget, “A Secure Future”, is a rather National-style and conservative term. It hardly screams “radical”, “leftwing” or “boldness”, but more about “security” which is a traditional term of conservatives.
What’s more, Robertson is selling his fifth Budget with very conservative lines. He starts his Budget speech, for instance, boasting about how the Government has recently won the approval of the IMF and OECD for their economic management, as well as receiving a Triple-A ratings from the global credit agencies.
Robertson’s other big boast is how his government is managing to get debt down and a return to surplus faster than the last National government did following the global financial crisis. Today he talks about taking a “responsible fiscal approach” that keeps a lid on debt. This is hardly socialist stuff.
In fact, Robertson makes a real effort to emphasise how gloomy the world economy is right now. He argues that uncertainty and volatility are huge. Of course, he’s right. And here in New Zealand there is also much despair and pessimism about the financial future.
Robertson will be hoping to hit the right note, electorally, in creating a conservative budget during a time of fear and gloom. Many voters are naturally wanting to see a steady ship, rather than a visionary and bold “adventure”.
Progressives on the left will despair that such a National-lite Budget does little to deal with the big issues of our time, but it probably manages to win over a number of wavering voters who might be thinking of supporting the real party of conservatism. The calculation will be that voters, with little in substance to differentiate between the major parties, will stick with the leadership that saw New Zealand through the gobal pandemic in much better shape than most other countries.
The risk, which has often dogged centre-left governments, is that trying to occupy the same political space as the opposition leads to erosion of core support to protest and non-voting, while the new-found swinging voters are usually very fickle.
The costs of living payment has knocked the stuffing out of Nationals middle squeeze rhetoric and the need to lower tax thresholds this was a surprise and all of this money most likely will go straight back into the economy so businesses will get something indirectly.
Yeah, nah. $27/wk for 3 months barely covers a block of cheese/wk or the increase in power bill over winter.
btw, I won’t get it so no axe to grind here
RobbieWgtn if you are happy to spend $27 on a block of cheese per week you have nothing to worry about.
Really Wheel? The bot who regurgitates left talking points now claiming if you can afford $27 a week for cheese you are ok.
Oh my fucking god you don’t get it.
Electoral oblivion awaits.
The costs of living payment has knocked the stuffing out of Nationals middle squeeze rhetoric and the need to lower tax thresholds this was a surprise and all of this money most likely will go straight back into the economy so businesses will get something indirectly. And I thought extending half price transport for a short time is good as many who use it can afford to pay but not all. Also community service card holders receiving public transport free is a very good policy for the time similar to the gold card for our elderly. You will never make everyone happy its impossible we don’t have a bottomless pit of money.
Good observation CIP.
I think the moral thing to do would be to make public transport free during Christmas and other exogenous shocks like earthquake, fire, war, what ever. I just still believe that a small payment is necessary to prevent over use.
In high volume areas and buses ticket barriers are necessary meaning the most high income earners basically pay for the services and those in lower income areas are able to just jump the gates (no need for rail Gaurds collecting revenue).
The costs of living payment has knocked the stuffing out of Nationals middle squeeze rhetoric and the need to lower tax thresholds this was a surprise and all of this money most likely will go straight back into the economy so businesses will get something indirectly. And I thought extending half price transport for a short time is good as many who use it can afford to pay but not all. Also community service card holders receiving public transport free is a very good policy for the time similar to the gold card for our elderly. You will never make everyone happy its impossible we don’t have a bottomless pit of money.
The costs of living payment has knocked the stuffing out of Nationals middle squeeze rhetoric and the need to lower tax thresholds this was a surprise and all of this money most likely will go straight back into the economy so businesses will get something indirectly. And I thought extending half price transport for a short time is good as many who use it can afford to pay but not all. Also community service card holders receiving public transport free is a very good policy for the time similar to the gold card for our elderly. You will never make everyone happy its impossible we don’t have a bottomless pit of money.
Not surprised the $350, fuel reduction and 1/2 price bus tickets are only temporary. Wait 2 months and Labour will announce a further 2 month extension. They’ll keep doing that until a month before the election and claim they’re the only party that will promise to make it permanent after the election.
Can someone confirm. Thought half price ticketing was permanent.
And National promised tax cuts which would have all gone on yesterdays cheese increase.
Now didn’t a certain leader promise no tax cuts a few years back and boom! They may or may not be temporary Richard but they are bloody effective for those in need. How is $2 a week going to help fill the tank or pay for groceries and did Nact dismiss 1/2 price fares or say they would keep them? Well we don’t know because they said fuck all other than wah, wah, wah, tax cuts, tax cuts, tax cuts!
John Roy
My hospital is falling apart at the seams with vital staff leaving and cancer cases getting cancelled. All I see is managers getting rearranged.
Actually all CEO’s have had their roles disestablished on July one, They will not be redeployed. The corporate level will be no more, managers have been informed that some will be given opportunities back at clinical level or be offered redundancies. Part of the health budget is to address the issues you raise.
John Roy 100%.Labour seem to think that spending money on health reforms. Ie more bureaucracy Won’t make a blind bit of difference, but hey, let’s rearrange the deck chairs! Yeah that will really help when you turn up to ED. Or when your GP retires and oh dear, no one to replace them. But good to know that bureaucrats are busy I. Wellington at meetings Yama, yada, yada
The budget is certainly a star on the TDB otherwise he wouldn’t have been the subject matter of a blog attracting 11 comments of which 3 can be attributed to wee Bob and 5 or so to who actually deals in facts.
From my perspective, this is a positive budget. What it means is a $350 payment over three months plus an extension to the lower petrol prices plus there is to be increased pressure on the supermarkets to keep their prices affordable. This is exactly what families on low incomes need. I am glad that more schools in lower socioeconomic areas are to be built, with $850million to be spent on this sector and with a target of 280 new classrooms. Additionally, I am also pleased that Maori education is being specifically budgeted for. This is a major step forward!
Tweaks to the first home buyer scheme are giving savers optimism about owning their own home, although for many of these prospective homeowners the reality of actually owning their own home will still be around two years away. This is why Labour ought to be voted in to power in 2023 in a coalition with the Maori Party. They will keep these initiatives going because they will want more of their voters to have the privilege of home ownership.
Our finances are in pretty good shape and there is a general election next year so the likelihood for tax cuts in next year’s budget is promising. We also have the dormant hospitality and tourism sector which is rearing to get up and go again!
Grant Robertson has had to miss long term solutions in his budget, to do with the cost of living, Maori health, and public transport. However, his budget today has made some major inroads and I believe that Mr Robertson and his team ought to be proud of this fact.
All in all, it is a budget full of sweet little enticements, aimed at average New Zealanders, designed to capture lots of votes in the 2023 election. It’s not too bad but it’s not too good, either.
Apparently the budget also contains funding for. another. Auckland. Harbour shifting. Proposal.
I’m not even joking.
Labour is in a death spiral.