Mike Hosking
Exit of John Key has extinguished any hope of keeping more of our wages and it may well cost National votes
Welcome to Budget Day 2017. No Budget is more important or influential than the one in an election year. For the Government it is better than a home field advantage.
It is like having home field, a sellout crowd, and the referee on your side. Well, it is if you’re the National Party in 2017.
In 2011 the National Party had to announce a deficit of $18 million. Earthquakes and global meltdowns will do that for you.
But here we are six short years later and they are swimming in money.
And money is choice, money is options.
For a Government coming to the end of their third term you could not have scripted this better.
After three terms you have pretty much run out of excuses. All the things you wanted to do, promised to do, have to have been delivered. The days of blaming the previous Government are well and truly gone.
Time generally is against you as well. People tire of Governments, it’s sometimes self-inflicted.
Governments can look worn down by office, or they can be error-prone.
So if you were scripting the life of a Government, one of the things you’d want to do is not to look tired, not to look like you’re taking it for granted, not to get dragged down by the weak links and most of all, best of all . . . to show everyone you actually know what you’re doing. There is no better way to do this than a Budget.
You can be forgiven a lot of bad days if, when you open up the cheque book, you can present a set of numbers that’s indisputably the result of good solid sensible fiscal management.
On that score this Government has done exceptionally well.
The politics, of course, is around what to do with it.
There’ll always be hands held out wanting more. There’ll always be criticism over priorities.
I fear, though, despite all this economic success, I’ll be disappointed this afternoon.
The Government has worked pretty hard these past few weeks to play down tax-relief talk.
The whole tax debate started last year on NewstalkZB in an interview I did with then Prime Minister John Key.
I asked what it would cost for a decent tax cut. Quick as a flash, he said: “$3 billion”, because he had done the numbers. Cue the headlines.
So as we sit here this afternoon, under a new leader and new finance minister, we have that $3b and then some. In fact, they forecast a surplus for the first three months of this year at $150m. It turned out to be $1.5b.
But sadly, along with Key going, so, too, has the dream of keeping a bit more of our money. Unless, of course, English and Steven Joyce are doing the old double psychology trick, but you only have to look at them to know that’s not true.
So no real movement on tax — not in the traditional tax-cut sense and that’s a shame.
Because, if it’s true, I would have thought that leaves them exposed. Act announced tax cuts, New Zealand First want tax cuts, both those parties could draw voters from National.
And it’s not as if the argument isn’t there.
The average wage in the main centres now creeps into the top tax bracket. For average wages to pay the highest tax rate is insane, so there is a logic for cuts.
But it may come, at the expense of debt reduction, a buffer against troubled international times. The good news for fiscal conservatives is that if debt reduction wins the day, you couldn’t argue that isn’t prudent.
But whichever way they go — and maybe it’s both — that’s the result of fiscal success.
A lot of money brings a lot of choices.
The pre-Budget announcements and what’s left to come this afternoon are proof of that.