No ‘Chewing Gum Budget’ nor communism by stealth
These Budgets fine-tune the status quo, adjust margins and tweak existing programmes.
Government Budgets come in four flavours.
Popular and bold: When a Government pulls one of these off, it changes the fiscal landscape. These Budgets are the rarest of animals. The 2004 Budget is the only one of recent vintage that comes close.
This Budget introduced Working for Families. John Key denounced it as ‘‘communism by stealth’’ but had to accept its permanence as the price of winning office.
Unpopular and bold: These Budgets inflict mortal wounds upon their Governments. Sometimes they are necessary but unpalatable medicines needed to cure economic disease.
At other times, they are a triumph of ideology over survival instincts. The Black Budget of 1958 is the textbook of an unpopular and bold Budget.
Unpopular and conservative: These Budgets are usually the result of mismanaged expectations. In 2005, the rumour was that there were tasty tax cuts in store for us. When the cuts proved to be paltry, Labour handed its opponents a club to beat it with. The party limped back into office that year, but the ‘‘Chewing Gum Budget’’ sore never fully healed.
Not unpopular and conservative: Sorry for the ‘‘not unpopular’’ double negative but ‘‘popular’’ would not be quite right. These Budgets fine-tune the status quo, adjust margins and tweak existing programmes. They don’t win a lot of votes, but they don’t lose them either.
They are the best type of Budget because they are symptoms of continuity and stability. Fortunately, they are also the most common type of Budget.
Steven Joyce’s first Budget falls into the last of these categories.
While the Government’s publicity has assaulted us with facts and figures, there’s nothing all that surprising in it.
Income tax thresholds will be relaxed slightly. Students will have a bit more leeway about when their loan has to be repaid.
The ‘‘communism by stealth’’ programme is going to be made more generous for some, while abating more quickly and paying less to others.
Those without children will lose access to some tax credits. Some students and people on lower incomes will receive more help with their accommodation costs.
All this fits within the global pattern of Centre-right governments trying to bring Centre-left voters into the fold.
Communal conservatism is on the rise and market individualism is being pushed aside.
This Budget is a continuation of the trend, not a revolution in and of itself.
This particular Budget is not without risk. Matters on which the Government is vulnerable remain on the table.
The cost of housing is the big one and nothing in this Budget will put an end to the demagoguery on that subject.
There is a limit to the extent you can sell tinkering as the solution to an ongoing problem.
The balance of election prospects should remain unchanged by this Budget.
We will have to wait for the campaign and the attendant promises to see if National has anything more revolutionary in mind for the next year.
In the meantime, the onus is on the Opposition coalition to articulate a plausible alternative.