Budget should have centred on health, but polling may improve
WELLINGTON: As far as former finance minister Bill English was concerned, the only good Budget in a time of economic stress was a boring Budget.
English engaged in sensible, notmuchtoseehere Budgets without flashy gimmicks and lolly scrambles. And he made an art form out of convincing the voters that boring was exactly what they had wanted and needed all along.
But then again, English was not contending with slumping polls.
The question Finance Minister Grant Robertson will be asking himself is if the glitzy bit in his Budget — the Cost of Living Payments — will be enough to make his polling headache go away for a while.
One of the nicknames the National Party gave the Budget was a “BandAid Budget” — a Budget that was little more than a BandAid for the cost of living problem.
It is an accurate name for it, and not only for the reasons National says.
The cost of living package in the Budget was intended as a BandAid for Labour’s polling more than the household budget.
That polling has been crumbling like a wellaged cheddar and National and Act have been hacking it with the cheese knife.
Their concerted campaigns on behalf of the socalled “squeezed middle” had taken root and expectation was high.
Robertson’s early attempt to dampen expectations by saying inflation spikes would be a shortterm issue failed miserably — and left him with little option but to scramble up something on the cost of living front for the Budget.
He had little option but to target it at middleincome earners — or at least some of them.
Lo, the Cost of Living Payment for wage earners who got less than $70,000 last year was born. It will last for three months — a period Robertson said was to allow the “storm” to ease. Robertson is now in a game of chicken with inflation — hoping the truck will at least slow down before the payments run out and he is asked what comes next.
It is far from certain Robertson will win.
It is obvious the cost of living package was a late clipon to the Budget plan — Treasury had to cobble together its analysis in a hurry.
In that analysis, Treasury recommended the $1 billion go to those on low incomes as part of a child poverty package. Its reasoning was that the same amount of money would have a lot more impact there, rather than being spread thinly around wage earners.
It is not often that Treasury is one that preaches the Labour gospel as the preferred option and it falls on deaf ears in Labour.
But the Opposition parties had succeeded in making the “squeezed middle” a force that could not be ignored without looking deaf to the needs of voters – and therefore arrogant.
Robertson’s cost of living package was more about trying to look as if the Government was
TODAY is Saturday, May 21, the 141st day of 2022. There are 224 days left in the year. Highlights in history on this date:
1471 — King Henry VI of England is murdered in the Tower of London. Edward IV takes the throne.
1792 — Following two months of eruptions and associated earthquakes, the eastern flank of Mt Unzen’s (in Japan) Mayuyama dome collapses following two large earthquakes, the landslip and associated tsunamis killing an estimated 15,000 people. It is not known whether the collapse occurred because of an eruption of the dome or as a result of the earthquakes. responding than actually responding.
The Cost of Living Payment will give those who earned less than $70,000 enough to buy 9 litres of petrol a week for three months.
It gave Labour the headlines it wanted for at least one day. Headlines after the Budget was released focused on the cost of living element of the Budget, despite it being dwarfed by the whopping $11 billion going into health.
That will not displease Robertson. Whether or not people think it will make much difference, it does at least look as if the Government was responding to their pain.
But what political benefit it has may be as short term as the package itself. Those who do not get it will wonder why not. Those who do get it may be underwhelmed.
Before Covid19, something that cost $1 billion in the Budget was a big deal. But the conga line of zeroes at the end of the dollar signs in the last two Covid19 Budgets have spoiled us in that regard.
It will do little to put to bed chatter about tax cuts as the longerterm way to ease the pain.
Many are already asking if Robertson has done enough or could have done more.
It is a different question to whether he should have done anything at all.
The Cost of Living Payment ended up hogging all the attention from the Budget.
Robertson might have got more political traction had he instead stuck to his guns and kept health as the centrepiece. A Budget does not have to have direct handouts to be a winner with the voters if it pulls its weight elsewhere.
This year’s Budget should have been called the Backlogs Budget — and pitched as money into government services in which massive backlogs have built up over the two years of Covid19. Those span services from hip operations to courts and coronial services. The longer those backlogs linger, especially in health, the more problematic they will become for a government.
But one reason the Government can’t afford tax cuts or more support for households can be seen in the rest of the Budget. The Government spends a lot, and it too is not immune to inflation.
Much of the $11 billion for health will almost immediately disappear simply in cost increases.
Nor will the Budget measure put an end to the chorus from National and Act for more moves for the “squeezed middle”. That will last as long as inflation lasts. Things ain’t getting cheaper any time soon.
1813 — The indecisive Battle of Bautzen, Germany, between the army of France’s Napoleon Bonaparte and those of Prussia and Russia, ends with heavy losses on both sides.
1840 — Lieutenantgovernor William Hobson claims sovereignty over the North Island for Queen Victoria by virtue of the Treaty of Waitangi, despite the collection of signatures to it not having been completed. He also claims sovereignty over the South Island by virtue of discovery.
1859 — The New Zealand Insurance Company is established, with eight Auckland businessmen promising their savings to the venture.
1883 — Auckland University College is officially opened by the Governor, Lieutenantgeneral Sir William Jervois.
1904 — Football’s international body, Fifa, is established in Paris.
1909 — Mahuta Tawhiao Potatau Te Wherowhero resumes his role as Maori king after serving on the Legislative Council.
1924 — The New Zealand Association of
Basketball is established in Wellington. The organisation later became the National Netball Association.
1927 — Aviator Charles Lindbergh, in the Spirit of St Louis, lands in Paris after the first solo air crossing of the Atlantic.
1932 — After flying for 17 hours from Newfoundland, Amelia Earhart lands near Londonderry, Northern Ireland, achieving the first transatlantic solo flight by a woman.
1967 — Organised by the Hamilton Car Club, New Zealand’s first motor rally, the Rally of the Pines, is held. It is won by club member Bill Purvis in a rebuilt 1951 Morris Minor.
1968 — The nuclearpowered United States submarine USS Scorpion, with 99 men aboard, is last heard from. Its remains were later found on the ocean bed 644km southwest of the Azores.
1980 — A coal train derails into the swollen Otira River after the river washed away a 50m section of track. The driver was trapped and drowned.
1982 — British troops attack the Argentineheld Falkland Islands, and the British military establishes a beachhead at Port San Carlos.
1983 — During a threeday storm that hits Wellington, winds over 74kmh batter the region for 32 consecutive hours (the longestlasting gale ever recorded in New Zealand).
1989 — Students occupying Tiananmen
Square in China reject a government ultimatum to leave the square, as several million people march in cities throughout the world to show support for the prodemocracy demonstrators.
1991 — Rajiv Gandhi, candidate for prime minister of India, is assassinated in a bomb attack in the state of Madras.
1993 — The Venezuelan Senate suspends President Carlos Andres Perez because of embezzlement allegations.
1994 — Bakili Muluzi is sworn in as Malawi’s first democratically elected president.
1998 — After protests and riots in Indonesia, President Suharto resigns, ending a 32year reign.
Today’s birthdays:
Paul Verschaffelt, third New Zealand public service commissioner (18871959); Keith Davis, All Black (19302019); Ron Isley, US singer (1941); British singer (1948); Carol Potter, US actress (1948); Mister T, US actor (1952); Judge Reinhold, US actor (1957); Lisa Edelstein, US actress (1966); Noel Fielding English comedian/actor (1973); Fairuza Balk, US actress (1974); Anika Moa, New Zealand recording artist (1980); Ma’a Nonu, All Black
(1982); Emily Robins, New Zealand actress (1989).
Quote of the day:
‘‘Hemingway was a jerk.’’ — Harold Robbins, US author, who was born on this day in 1916. He died in 1997 aged 81.