On that basis, Thursday’s promised “no-frills” Budget is not the end-all of election year promises Grant Robertson may stitch together.
Between the House rising at the end of August and the October 14 election, he and his Labour colleagues can promise quite a bit more ruffle and flounce to attract the voters.
But that is for another day.
With savings here, reprioritisations there, and everywhere restraint and prudent debt, it is not being over-sold, that’s for sure.
Of course, under-promising and over-delivering is obligatory spin for Budgets these days.
Get them yawning and the media will welcome the unexpected - and then your surprises will become their story on the day.
So it was on Thursday that Finance Minister Grant Robertson, at the first of three pre-Budget events, told a Wellington business brekkie he was poised - nay finely balanced - on the tightrope of fiscal responsibility. (Infrastructure in Auckland and cyclone recovery on the East Coast today were his big-three pre-Budget events.)
Tax revenue has been falling, according to the latest monthly updates from Treasury.
Robertson pointed to that, while outlining his intent to reduce spending as a percentage of the economy. That would see a return from the relatively high levels now (around 35 per cent of GDP after the impact of the pandemic and weather) to the low 30 per cent range of recent years.
Some Covid-related costs and initiatives that are no longer relevant or needed are for the nip and chop - think MIQ and programmes to support businesses, jobs and job creation.
Government debt, at just over 19 per cent of GDP, is well below the Government’s self-imposed limit of 30 per cent and - as Grant Robertson pointed out - below Australia’s 36 per cent and well below the UK and US at 95 and 96 per cent respectively.
He did, rather cryptically, note that: “At times in the past the debate around public debt in New Zealand was one that went beyond what was a sensible level of caution for a small, open economy to one that prioritised reaching a specific level of low debt as an end in itself, to the neglect of many other important considerations.”
Whatever that meant, current debt levels are not a major concern. Back in the day, then-Prime Minister John Key liked to say that New Zealand didn’t have a debt problem, it had a growth problem.
Well, right now we still don’t have a debt problem, but we do have a cost of living problem. There cannot be a single politician who fails to grasp that rising costs are the major concern for voters.
We also have a “cost of fixing cyclone and flood damage” problem, estimated to cost $9 billion to $14.5 billion. The invoices to fix damage to infrastructure and assets are coming in so regularly - form Auckland again this week - that you wonder if there should be a permanent fund or contingency to cover them, beyond EQC. Robertson may have been hinting at this when he said on Friday that a down-payment would be made to fund such investment and “future national resilience projects” to protect communities.
So any major surprise in next Thursday’s Budget could be - should be - measures to address future infrastructure needs and to ease the pain on households.
On the latter, Ministers have pointed to April 1 boosts to the minimum wage, benefits and the decision to super-charge superannuation. But for political as well as cost-of-living reasons, more will be needed for middle New Zealand.
Out are “major” tax changes, though Chris Hipkins’ careful language suggests some tweaks are possible. They could include minor shifts to abatement rates and personal tax thresholds as well as very limited steps to raise revenue. But Hipkins has ruled out, as too inflationary at this time, the across-the-board threshold shifts National advocates.
Robertson on Wednesday stressed the need to reduce the cost of living in a way that did not exacerbate inflation; the very ill you are trying to address.
On that basis, he is as unlikely to give a big boost to Working for Families as he is to tax cuts or splash cash on sugar hits like last year’s $350 cost-of-living payment.
Rather, moves to lower everyday costs such as groceries, transport, fuel, housing, health and childcare, would be a good place to start any speculation.
Whether that will move the political dial is anyone’s guess.
Although Budgets can lose elections, they rarely win any.
So it is unlikely this one will make a vast difference to the current polling tread.
The latest surveys put the left and the right blocs in a statistical dead heat. They also show Labour’s support softening and Christopher Luxon way behind Chris Hipkins as preferred PM or on favourability......The full article is published HERE
Vernon Small is a former journalist and advisor to the Attorney General. He now writes a weekly column for the Sunday Star-Times.
Of course, under-promising and over-delivering is obligatory spin for Budgets these days.
Get them yawning and the media will welcome the unexpected - and then your surprises will become their story on the day.
So it was on Thursday that Finance Minister Grant Robertson, at the first of three pre-Budget events, told a Wellington business brekkie he was poised - nay finely balanced - on the tightrope of fiscal responsibility. (Infrastructure in Auckland and cyclone recovery on the East Coast today were his big-three pre-Budget events.)
Tax revenue has been falling, according to the latest monthly updates from Treasury.
Robertson pointed to that, while outlining his intent to reduce spending as a percentage of the economy. That would see a return from the relatively high levels now (around 35 per cent of GDP after the impact of the pandemic and weather) to the low 30 per cent range of recent years.
Some Covid-related costs and initiatives that are no longer relevant or needed are for the nip and chop - think MIQ and programmes to support businesses, jobs and job creation.
Government debt, at just over 19 per cent of GDP, is well below the Government’s self-imposed limit of 30 per cent and - as Grant Robertson pointed out - below Australia’s 36 per cent and well below the UK and US at 95 and 96 per cent respectively.
He did, rather cryptically, note that: “At times in the past the debate around public debt in New Zealand was one that went beyond what was a sensible level of caution for a small, open economy to one that prioritised reaching a specific level of low debt as an end in itself, to the neglect of many other important considerations.”
Whatever that meant, current debt levels are not a major concern. Back in the day, then-Prime Minister John Key liked to say that New Zealand didn’t have a debt problem, it had a growth problem.
Well, right now we still don’t have a debt problem, but we do have a cost of living problem. There cannot be a single politician who fails to grasp that rising costs are the major concern for voters.
We also have a “cost of fixing cyclone and flood damage” problem, estimated to cost $9 billion to $14.5 billion. The invoices to fix damage to infrastructure and assets are coming in so regularly - form Auckland again this week - that you wonder if there should be a permanent fund or contingency to cover them, beyond EQC. Robertson may have been hinting at this when he said on Friday that a down-payment would be made to fund such investment and “future national resilience projects” to protect communities.
So any major surprise in next Thursday’s Budget could be - should be - measures to address future infrastructure needs and to ease the pain on households.
On the latter, Ministers have pointed to April 1 boosts to the minimum wage, benefits and the decision to super-charge superannuation. But for political as well as cost-of-living reasons, more will be needed for middle New Zealand.
Out are “major” tax changes, though Chris Hipkins’ careful language suggests some tweaks are possible. They could include minor shifts to abatement rates and personal tax thresholds as well as very limited steps to raise revenue. But Hipkins has ruled out, as too inflationary at this time, the across-the-board threshold shifts National advocates.
Robertson on Wednesday stressed the need to reduce the cost of living in a way that did not exacerbate inflation; the very ill you are trying to address.
On that basis, he is as unlikely to give a big boost to Working for Families as he is to tax cuts or splash cash on sugar hits like last year’s $350 cost-of-living payment.
Rather, moves to lower everyday costs such as groceries, transport, fuel, housing, health and childcare, would be a good place to start any speculation.
Whether that will move the political dial is anyone’s guess.
Although Budgets can lose elections, they rarely win any.
So it is unlikely this one will make a vast difference to the current polling tread.
The latest surveys put the left and the right blocs in a statistical dead heat. They also show Labour’s support softening and Christopher Luxon way behind Chris Hipkins as preferred PM or on favourability......The full article is published HERE
Vernon Small is a former journalist and advisor to the Attorney General. He now writes a weekly column for the Sunday Star-Times.
1 comment:
Hope they have checked in with Tamihere et al. If not kingmakers maybe rangatira?
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