A nice plan but with no economic vision

This is a curate’s egg of a Budget — good in parts, but unfortunately there is no plan for how we are going to grow the New Zealand economy and raise living standards.

On the face of it, it’s good to see the massive investment in health, including more money for medicines and ambulances. However, the bulk of the new money goes to wiping out DHB deficits — which is an accounting adjustment to give the new Health New Zealand entity a clean slate; it won’t actually buy extra operations or pay for more nurses or doctors.

There is a nod to the cost-of-living but it’s only $27 a week if you earn less than $70,000. It’s better than nothing, but is more welfare.

A better approach would have been inflation-adjustment of tax brackets to let people keep more of their own money, and incentivise work. The already small impact of these payments will soon be swallowed up by inflation.

Looking at the detail, our debt is going up, and so is our spending; it is going to take longer to get back into surplus. That is no recipe for economic growth.

There is nothing here that

There is nothing here that improves New Zealand’s competitive position. This is not an outward-looking Budget that is going to attract investment and people to New Zealand

improves New Zealand’s competitive position internationally. It is not an outward-looking Budget that is going to attract investment and people to New Zealand and that translates to no plan for increasing our wealth in real terms.

I suspect most people will like the sound of the health investment, but won’t feel there is anything particularly significant in this Budget for them. If you are a 25-year-old with skills, you’re probably thinking Australia looks pretty good right now.

Apart from the ongoing focus on health reforms, this Budget will soon be forgotten. However, the negative long-term economic effects won’t be.