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Mixed results from the Budget

Last week’s Budget was an interesting document. Predictably there are issues I agree with and those I don’t.

Starting with cuts to the government sector, while I totally support cuts and rationalisation, I don’t support a one-size-fits-all approach.

Asking for something between a 6.5 per cent and 7.5 per cent cut across the board doesn’t spin my wheels.

For example, I would have absolutely no doubt that in three organisations, the Ministry of Business, Innovation and Employment, [MBIE], the New Zealand Transport Agency, [NZTA], and the Ministry for the Environment, the cuts could be considerably greater.

In other organisations, such as the police and MPI, I believe any cuts need to be carefully considered. MPI has been able to cut staff by 10 per cent while assuring me all key services will be maintained. I’ll watch it with interest.

Police are another story. They tell me they have cut 200 back-room staff, but the Police union tells me the frontline can’t perform without them and that frontline officers will have to take up back-room roles.

There’s not a lot of future in that approach.

Another large part of the Budget was tax relief, and on that I believe the government greatly over-promised and massively under delivered.

The much-promised $250 a week will go to just 3000 families while the 9000 poorest families will lose $1 a week. For the Minister to then tell me she didn’t know speaks volumes.

Federated Farmers President Wayne Langford put the issue succinctly.

“Just like the average farmers budget this season, the government doesn’t have a lot of spare cash laying round to spend on nice-to-haves and optional issues.”

I respect the opinions of economist Shamubeel Eaqub. His view of the Budget was that “borrowing in the Budget to fund tax cuts and operating expenditure is like earning less and living off the overdraft.” I agree with him.

His conclusion: “This budget, like many before it, has lived up to a dispirited tradition of short-termism.” He added: “Our spending is too lavish for our taxes.”

I wholeheartedly agree, which is one reason I didn’t want the massively over sold tax cuts.

On the short-termism, I believe that reducing expenditure on science and research is short-sighted and will cost us dearly.

On the positive side I agree with the extra resources for police and the Regional Infrastructure Fund while maintaining the Apprenticeship Boost scheme. I also agree with the extra cash into roading, infrastructure and Kiwirail.

On the negative side, the cancellation of the first home buyer scheme, despite the PM’s promise to keep it, combined with canning free prescriptions, could negate any benefits from tax cuts. I also thought the non-funding of the promised cancer drugs was callous.

I think the agriculture ministers in the government have done a superb job with their cutting of red tape and compliance costs and simplifying regulation.

A healthy and profitable primary sector means a healthy and profitable economy.

On the finance side, the jury is out.

1 COMMENT

Roger Parker
Roger Parker
Roger Parker is the Times-Age news director. In the Venn-diagram of his two great loves, news and sport, sports news is the sweet spot.

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