Looking for vision in Budget numbers
They say finance ministers never forget their first Budget. So don’t be surprised if Steven Joyce wears a purple tie to his next Budget, assuming he gets one.
That was the colour tie his daughter picked out for him to present his first budget and if National wins the September election Joyce will know he delivered the right Budget for the times.
That’s how Budget Day traditions are born. Politicians, like sportspeople, are superstitious.
Joyce’s Budget is hardly the most memorable we’ve seen but it ticked the boxes that needed ticking. Here are the top four reasons why.
It set the Opposition at each other’s throat
Labour immediately attacked the more miserly end of the tax threshold changes that deliver the very lowest-paid workers chump change of not much more than $1 a week.
But barely had Andrew Little coined the phrase ‘‘$1 bill’’ to attack the Budget than the Greens and NZ First pulled the rug out from his feet by voting for it.
It boxes Labour in on spending
Little has already pledged to honour the boost to Working for Families and the accommodation supplement if he is in power and is non-committal on the tax threshold changes. That adds up to a $2 billion raid on spending Labour might have otherwise committed elsewhere.
It pushes even further into Labour territory
Labour is tearing its hair out. National’s last Budget dived deep into Labour’s heartland by raising benefit levels by $20 a week, the first increase in decades.
The big-ticket items in this Budget are all about low and middle-income workers – using Labour’s one-time flagship policy Working for Families – boosting public services and tackling child poverty.
It’s all about the battlers, in other words – once Labour’s blue collar core. There was barely a nod to National’s more traditional constituency of high-income earners, who do best out of the tax threshold changes but not obscenely so.
It’s hard for Little to make much political capital out of the ‘‘fat cats’’ getting an extra $33 a week in the hand (though he will try).
It doesn’t rock the boat
With regime change comes uncertainty and the big question was not just whether National could survive the loss of one of our most popular prime ministers ever, but upheaval in the finance role.
Trust in Bill English as a safe pair of hands was high for his stewardship of the country’s finances through the global financial crisis and Christchurch earthquakes.
Joyce needed to deliver a Budget that reassured voters it was business as usual. He achieved that – though it helps when inheriting whopping surpluses, uninterrupted growth and the ability to spend and pay off debt at the same time.
But while Joyce’s first Budget was well received, it’s not all bouquets. The Budget was predictable if not boring and while it scratched a lot of itches, it fell short on other fronts, including:
Vision
If we’ve heard it once, we’ve heard it a thousand times. Whether it’s the business community, its opponents, or economists, everyone seems to agree that National’s economic vision has never been overly exciting. It doesn’t seem to have hurt National so far – when it came to power at the height of the global financial crisis people valued safety and security over risk, debt repayment over boldness.
But the mood may be changing. The polls might say something different and New Zealand’s economic story is the world’s envy. But out on the street it’s hard to get a sense that people are feeling the glow. What was once seen as a strength risks looking dull and plodding.
National identity
Helen Clark campaigned on a vision for a sustainable New Zealand. She was probably ahead of her time. The missing factor in Joyce’s Budget was a big, bold move on an issue that goes to the heart of our national identity, our 100 per cent pure, clean green brand. Putting its money where its mouth on the environment, making the protection of our national brand its No 1 priority, would be the the big bold visionary move that everyone is looking for from National.
We all know that reputation is at risk and once gone it will never be back. But so far the Government has paid little more than lip service to climate change and has become bogged down in semantics over freshwater quality.
It’s still not enough
It’s all about the battlers, in other words – once Labour’s blue collar core.
Housing, schools, hospitals and infrastructure are all under pressure from population growth and immigration and it’s no longer just an Auckland problem. The Budget threw more money at health but it is probably not enough to stop the headlines about patients missing out because their local hospital and health services are feeling the squeeze.
The wealth effect of rising house prices has made many people better off but the grumbling is getting louder about local issues like P, the hollowing-out of town centres as a result of retail decline, beggars in the street and a growing divide between the haves and the have-nots.
And parents are grumbling that they are having to dig deeper into their own pockets to fund school activities as schools cry poverty.
But this after all, was an election-year Budget. It’s a given that by the time the campaign proper rolls round voters would have banked the Budget Day gains in their minds and be asking ‘‘what else?’’.
As National’s campaign manager Joyce knows this better than most. So don’t be surprised if he’s saving the best till last.