Short-term Budget in election year

Budget 2017 is, unsurprisingly, unambitious and very short-term in its focus. Indeed, it is even more short-term than a Budget would normally be.

With our three-yearly election cycle, parties in government are focused on re-election. With the general election just under four months away, Bill English and Steven Joyce are singularly focused on selling a story of sound economic management and a surplus with something for everyone.

Their primary aim is to capture votes from the political centre. With voters in Auckland and elsewhere troubled by housing affordability and pressures on education and health, and transport infrastructure arising from record levels of migration, it was necessary for these areas of government spending to receive attention.

The increase in the accommodation supplement is long overdue. However, the Family Incomes Package to be introduced from April 1 next year, widely viewed as an election bribe, does not address underlying causes of housing need and poverty.

While a short-term fix is needed, so, too, is a long-term solution to the housing crisis in New Zealand, including investment in housing stock. The housing crisis is now increasingly being felt in other regions where the spill-over from Auckland’s property market is pushing up prices and demand for residential property for rent and purchase. How long before rents absorb the increased accommodation supplement?

Given the size of the Auckland electorate, the Government has to focus on addressing Auckland’s growth issues. A more balanced regional development policy and spending programme would in the medium and long term alleviate some of the pressures of growth in Auckland and also provide muchneeded support for regional economies.

To date, a primary focus of regional economic development, especially in the Manawatuwhanganui region, has been to improve roading.

However, the heavy dependence on construction of roads to promote economic growth and employment is short-sighted. More roads result in more congestion and a land transport system that lacks resilience.

Budget 2017 spending on transport is sizeable, with it getting about $1.8 billion on the $4b of new capital spending. But ‘‘transport’’ is somewhat misleading. More than 80 per cent of Vote Transport is for roading.

Joyce has acknowledged that with the level of spending on transport in Auckland, nonaucklanders may have reason to feel they are missing out.

In the short term, our region seems likely to benefit from increased spending on law and order and defence. Defence receives a boost with $100 million to improve defence camps and bases throughout the country, including facility upgrades in our region. Somewhat longer-term benefits should accrue from the small increases in science and innovation spending.

In the big-ticket items of health and education, key areas of public sector spending that are potentially significant contributors to the Manawatuwhanganui regional economy, Budget 2017 signals continuity rather than cut-backs and contraction.

However, continuity is not much comfort for households struggling to put food on the table and get healthcare, mental health services and support for kids failing in the school system.

It also means transport infrastructure remains vulnerable to geological hazards and a changing climate. The quality of the environment, on which the tourism and agrifood sectors depend, continues to degrade, and we fail to invest in the new technologies needed to reduce our greenhouse gases and adapt to climate change. This is not in our region or NZ Inc’s interest.

Christine Cheyne is an associate professor of resource and environmental planning at Massey University.