The Gabrielle flood and Grant Robertson’s budget, and all the future floods

Grant Robertson may be revising his budget because of this one flood; but he can’t lose sight of the wider economy. (TV One News  20 Feb)

Teachers are striking next month and he has to head that off; especially in an election year. Teachers have a right to be very annoyed with his previous wage settlements. Grant has caused a flood of problems for Education – recruitment and retention of skilled motivating inspirational teachers. So essential to grow our future workforce. We know many businesses just want to import labour as a relatively cheap option rather than grow our own. But now more than ever we need to grow our children, our people. Getting our teachers not worried about finances will go a long way to help that. The extra work they do outside the class is enormous, and keeps so many sports going.  Without good wages education over time will turn to lots of Dickens style teachers; self aggrandising bullies of children. 

Grant has caused a flood of problems in the health sector. Poor Andrew Little constantly having to cover for Grants short sighted decisions. Andrew must be relieved to be out of the role.  Shortages of skilled staff are a direct consequence of Grants parsimonious wage settlements. e.g. income is set way too low to attract more people to be midwives. It just goes on and on. Retention is critical. All this moaning but some people are useless and don’t deserve pay rises. That will be a tiny percentage and it’s a bell curve so after a while even good people will come under pressure. Some will be less effective as they have burned out from the huge pressure in health from the pandemic.  More of those problems are coming. 

These are bread and butter issues for the wider economy and society. They are the base of a functioning society. These can’t be down graded and forgotten in the glam media fascination with photos of mud, twisted fences, slips, slash, buried cars and houses. And the tragedies. I am transfixed; but a Minister of Finance should not be.

Grant does seem to be signalling he is going to forget his previous budget and now he is going to help a few thousand businesses to stay afloat. They do need help; but the National Party mantra is people should not get handouts they should get a hand up. The way how that mantra was rolled out to beneficiaries under National was pretty harsh; but beneficiaries were not their voters. Grant should not be so harsh as National was. But the assistance provided to businesses should come as loans or with claims on future profits. If the business is a company perhaps the government should take shares in the company; shares with a right to dividends. Shares that can be bought back or on-sold at a later date. This is an equitable trade off between support and the role of business to make a profit and support society.

This approach would also deal with the central administration problem that some people are so much worse off than others. e.g. they gave an example of one orchard losing almost 100 of their crop and another nearby only lost about 20%. A scheme that takes on a liability means a better off orchard or business will have less incentive to try and play the system to get a handout they may not be entitled to, because you have to pay it back. 

This flood raises the issue of the role of government. e.g. I suggest it is not the primary responsibility of government to repay people who lost rental property, or business profits. The first priority is to look after those who lost their primary house that they lived in. This is the same principle that should apply to all plans for managed retreat with sea level rise and floods. If somebody owns lots of properties then they can just move to another one. Scarce government money can’t be recompensing relatively wealthy people ahead of those who only have one home. The poor should be getting new homes built for them in safe locations. 

The Minister of Finance has to take the longer view. Mr Robertson by visiting the damage and signalling he is revising his budget sounds a little like a short term view driven by a worry about short term headlines. The heart of the economy and our society lies elsewhere.