Mini-Bud­get stole much of the show

The Press - - National News | Politics -

ANAL­Y­SIS: On July 1 the Gov­ern­ment will start to pay a lot of fam­i­lies a lot more money every week.

Any fam­ily with chil­dren on a mod­er­ate or low in­come will re­ceive a se­ri­ous bump to their Work­ing For Fam­i­lies – likely well over $1000 a year. Any­one with a baby born af­ter July 1 will re­ceive $60 a week for the first year of its life. Any­one with a su­per­an­nu­a­tion or other main ben­e­fit will start to re­ceive their Win­ter En­ergy Pay­ment of $20 a week. When these poli­cies are fully rolled out the poor­est 384,000 fam­i­lies in New Zealand are ex­pected to re­ceive an av­er­age of $3900 ex­tra a year.

No, this isn’t a sneak peak of to­day’s Bud­get. It’s all in the $5.53b Fam­ily In­comes Pack­age the Gov­ern­ment an­nounced in its ‘‘mini-Bud­get’’ last De­cem­ber, money found by can­celling the pre­vi­ous Gov­ern­ment’s $8.36b tax cuts.

A lot of peo­ple will be look­ing for what they can ex­pect in their back pocket from to­day’s Bud­get, and may end up dis­ap­pointed. The Gov­ern­ment al­ready made a ma­jor change to the in­comes of Ki­wis, one that (mostly) hasn’t hit yet – but it won’t be in to­day’s Bud­get.

In­deed, a lot of the big ticket bud­get items the Gov­ern­ment promised dur­ing the elec­tion were set in train in De­cem­ber, when we were all a bit bored of pol­i­tics and ready for Christ­mas.

Ki­wiBuild got its $2b in cap­i­tal to build those

100,000 af­ford­able homes. Ter­tiary stu­dents got their first year of uni free. Tax cuts were can­celled with gen­er­ous boosts to Work­ing for Fam­i­lies and new ben­e­fits to re­place them. Paid parental leave got ex­tended from 18 to 22 weeks.

This doesn’t mean the Gov­ern­ment has spent all of its money al­ready. Far from it.

That same mini-Bud­get al­lo­cates $2.6b of op­er­at­ing al­lowance for this year’s bud­get – that’s con­tin­ued and re­peated spend­ing – and $3.4b for one-off cap­i­tal spend­ing. The tax take since De­cem­ber has been much bet­ter than ex­pected, and Robert­son has found $1.4b in repri­ori­tised cash and money from the changes to GST and the Bright Line test. There’s plenty of money.

But it does sig­nal the fo­cus will be less on the back pocket and more on the wider sys­tem. Prime Min­is­ter Jacinda Ardern has re­peat­edly called to­day’s Bud­get a ‘‘Re­build­ing Bud­get’’ – think se­ri­ous cap­i­tal into schools and hos­pi­tals.

Labour is also likely to give a boost to the wider health and ed­u­ca­tion op­er­at­ing al­lowances, money that could go to some spe­cific re­tail prom­ises that reg­u­lar vot­ers will no­tice. Var­i­ous coali­tion prom­ises – think ‘‘pro­vin­cial growth fund’’ – will also take a chunk of that money.

On hous­ing – one of the key is­sues Labour cam­paigned on – we may see more de­tails on that

$2b al­lo­cated to Ki­wiBuild. But the big hous­ing is­sue ab­sent from the mini-Bud­get was state hous­ing. Labour promised to build at least 1000 more a year, but Hous­ing Min­is­ter Phil Twyford has been very clear that he would pre­fer to build some­thing in the range of 2000.

There’s a solid ar­gu­ment to be made that Labour should have tac­ti­cally saved those re­tail poli­cies from the mini-Bud­get for this Bud­get. It would have made this Bud­get a very full and loud Labour Bud­get – not the ‘‘re­build­ing’’ Bud­get the prime min­is­ter has been talk­ing up.

But even if this Bud­get isn’t quite as ex­cit­ing as the sup­pos­edly ‘‘mini’’ bud­get from De­cem­ber, that isn’t the end of the world for the Gov­ern­ment. There’s still two more of them be­fore the next elec­tion.

A lot of peo­ple will be look­ing for what they can ex­pect in their back pocket . . . and may end up dis­ap­pointed.

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