Labour’s Budget is National-lite
The cover page of Labour’s first Budget in more than a decade might be red but in tone it was pale blue. The only surprise was the size of the surplus, at $3.1 billion, and there was nothing else in the Budget to overshadow that number – which is exactly as Labour would have wanted.
Finance Minister Grant Robertson was almost channelling former National finance minister Bill English when he repeatedly referred to the Budget as fiscally cautious.
The surplus leans in part on a windfall gain from extra tax revenue since last year’s preelection fiscal update. Treasury is projecting that to continue into the future.
But Robertson has also fallen on the conservative side of spending, even at the risk of looking miserly in areas such as law and order where the promise of 1800 more police has shrunk.
Schools will also feel like they could have done better, given Labour’s rhetoric on an underfunded education system.
There are few surprises, meanwhile, barring the extension of free GP visits to under 14-yearolds. And health is the big winner, as predicted, with the bulk of the extra spending going on hospitals and primary health.
But in this case the sum of the whole really is bigger than all its parts.
Fiscal responsibility was Robertson’s word of the day and if he said it once, he said it repeatedly.
Yesterday’s Budget tells only part of the story, of course.
Most of the big ticket items were announced prior to Christmas, in the 100 day Budget, including a whopping $5.5b families package.
The other big spendups prior to Christmas included free tertiary study, $2b for the KiwiBuild and other flagship programmes such as the $60 a week first start payment for newborns.
And despite the lack of fanfare, the Government is on track to spend an extra $24b over the next four years, which is an increase of 5 per cent in total core Crown expenses over the next four years compared with National.
But the government will also reap an extra $20b in revenue over the same period, meaning Robertson still has plenty to salt away for subsequent years.
That will give Labour a lot more room to move in 2020, when the next election rolls around, though there will be pressure on Robertson well before then to respond to building demand from nurses and teachers for more money.
For now, Robertson will be happy to wear criticism that his first Budget is National-lite.
The only surprise was the size of the surplus, at $3.1 billion, and there was nothing else in the Budget to overshadow that number – which is exactly as Labour would have wanted.