The two hands of Robertson’s surplus response

Today’s Herald editorial – Use surplus for benefit of everyone – highlights a contradiction in the opposition response to the National Government finally, after seven years, achieving an actual surplus.

Across the aisle, opposition parties waved their wish-lists with new confidence, calling for the surplus to be spent on child poverty, more hospital operations, more pre-school education … you name it.

At the same time, they predicted the slender surplus would disappear as suddenly as it arrived.

Labour have long criticised National for following their surplus years under Helen Clark and Michael Cullen with a sequence of deficits.

Even now they lambast National because they say the surplus will be short lived due to tightening economic conditions and low inflation.

But Labour have opposed many measures aimed at keeping a tight rein on spending.

They have pushed for more spending.

As soon as the surplus was announced Labour MPs suggested how it could be spent many times over.

On one hand Labour’s finance spokesperson Grant Robertson was highly critical of the meagre surplus:

First surplus a blip on radar screen of debt

by  on October 14, 2015

Bill English’s first surplus is just one black drop in a sea of red, with New Zealanders still paying over $10m a day in interest payments, Labour’s Finance spokesperson Grant Robertson says.

“The Finance Minister has finally found a surplus needle in his haystack of debt. Despite promising a ‘significant’ surplus, it’s just $414m. That’s less than 0.2 per cent of GDP – a rounding error, not a surplus.

“But the surplus show is over before it has begun. With the economy running out of steam, National’s promises of a string of surpluses are extremely unlikely to become reality. That’s poor financial management.

“National’s financial management will go down in history as one small surplus – at the peak of the economic cycle – out of nine Budget deficits.

And on the other hand, on the same day, he issued this complaint about the lack of spending required to achieve the surplus:

Nats sacrifice Kiwis’ health and education for surplus

by  on October 14, 2015

National’s drive for surplus has meant less investment in critical areas like health, education, housing and transport – yet John Key told Parliament today he wants the money for cycleways, Labour’s Finance spokesperson Grant Robertson says.

“The Government’s belated surplus has been partly achieved by dropping spending by $235m in education, $97m on housing and community development, $52m in health and over $300m on transport and communications.

“These are critical areas. Too many students are failing NCEA, dilapidated state houses are making people sick, patients are waiting far too long in hospital emergency departments and regional roads and internet services are in desperate need of upgrades.

“It also appears that $444m has been taken out of the EQC claims budget. No one in Canterbury waiting for repairs or needing their repairs redone would think that money isn’t needed.

“The next time Kiwis find themselves waiting for an operation, getting sick in their home, worrying about their children’s performance at school, or nearly crashing on a dodgy road they can thank their lucky stars Bill English has a surplus and John Key has his cycleways,” Grant Robertson says.

This is Opposition opposing gone mad – criticising National for finally, only just achieving a surplus but hammering them for not spending more. For not spending a lot more.

On one hand he criticises years of deficits, but he wants to hand out heaps more money with his other.

The Herald wrote:

If the surplus in the final account for the year that ended on June 30 can be sustained in the current year and projected to continue, the best use of it would be to reduce debt more quickly. The next best use would be to resume the contributions to the NZ Super Fund that the Government suspended six years ago.

The level of debt and stopping contributions to the Super Fund have also been criticised by Labour.

If Robertson ever becomes Minister of Finance it will be interesting to see how he goes about balancing the books.

Little’s budget speech

Andrew Little’s budget speech has been slammed by opponents, not surprisingly,

John Key “That was singularly the worst reply speech by a Leader of the Opposition this Parliament has heard.”

David Farrar: “Andrew Little’s Budget speech is the worst I can recall from an opposition leader. He made David Shearer look like David Lange. It was incoherent, he lost his way several times, and just stumbled from one page to the next. I think he even repeated a few lines by accident.”

FromThe Standard:

Alwyn “I’ve heard some terrible speeches from Little but this one takes the prize for puerility.”

Greg Presland “It was not the best I have seen him give but I do not expect perfection. It was still miles better than Key’s. You have to understand the opposition gets little notice of what is in the budget so initial speeches are always somewhat reflective.”

Karen “Little’s speech was workmanlike rather than inspiring but his transphobic joke at the beginning was unforgivable IMO. It is one thing not to support increased surgery because of budget constraints, it is another to make a joke at the expense of vulnerable people. Bad form Mr Little.”

Little’s comment: “I do not know what he is trying to hide: some sort of fiscal gender-reassignment or something—who knows what it is. But he cannot produce a surplus. ”

Nordy went in to bat for the team “Little’s good, direct speech was full of substance – something we aren’t used from Key & Co. A continuation of the real thinking about the future and what is needed for our country we have seen from Labour and other parties on the left. Whether he is or isn’t ‘inspiring’ is really of no consquence – substance and hard work for all New Zealanders is what he provides ans what we need. No wonder he worrys the ‘right’.”

One line from Little that forgets a bit of major recent history: “This is a Government that has been 7 years in office—7 years in office—and that has enjoyed the best of times: record high dairy prices, record high export volumes, and growth of over 3 percent. ”

Draft transcript:

Appropriation (2014/15 Supplementary Estimates) Bill

Speech – ANDREW LITTLE (Leader of the Opposition)

ANDREW LITTLE (Leader of the Opposition): “Wait until tomorrow.”, they said. “One sleep to go.”, which was a bit rich for a Government that spent 7 years sleeping at the wheel. If this is a plan that is working, then why have we seen today one of the biggest spends on alleviating child poverty, which this Government has known of for 7 years and done nothing about until now?

Why has this Government been panicked into doing something about the desperate Aucklanders who cannot get to own their own homes? They are hardly features of the Budget at all, and we know why: because the Government cobbled it together in just the last few weeks alone.

I move, That all the words after “That” be deleted and be replaced with “this House has no confidence in a Government which has failed to deliver the jobs, the incomes, or the real surplus they promised, squandered the golden economic weather, failed to diversify our economy, failed to meaningfully fix the housing crisis, neglected regional New Zealand, and is tired, out of touch, and out of ideas.”

This is a Government that is demonstrating management by sleepwalk, because that is what this Budget is. This is a Budget that manages the decline.

There is nothing in this for the long-term future of New Zealand that will give hope and confidence to those who are working hard and struggling to get ahead. So we see now this surplus of $176 million for next year. Well, just remember—just remember—last time the Government promised a surplus of over $300 million, and the deficit is over $600 million; the billion-dollar gap. It is the billion-dollar gap that has materialised in 1 year alone.

So my message to New Zealanders is this: the Government might have promised it, it might have budgeted for it, but you cannot trust it because it never, ever happens. It is a continuation of the Dance of the Seven Veils.

Poor old Bill English there, ever since about 2010 another veil comes off and a promise is made. In 2011 another veil comes off and the promise is made again. We have had that repeatedly and now we have had another veil removed and we know that there are still more to go.

I do not know what he is trying to hide: some sort of fiscal gender-reassignment or something—who knows what it is. But he cannot produce a surplus.

This is not a real surplus in this Budget, and he knows it. New Zealanders will see it for what it is: a desperate Government that cannot fulfil the core election promise that it made last year that it would return the books to a balance and a surplus.

And there is a good reason why. Good Governments manage the Government’s books to achieve a surplus. There is a reason why the last Labour Government managed the Government’s books to achieve nine successive surpluses, because when you get a surplus you do the stuff that builds a nation.

You can put in place your New Zealand Superannuation Fund to prefund superannuation, because when you take a close look at these books, what you see is that by 2018 the cost of New Zealand superannuation is going to rise—it is going to increase—by nearly $1 billion a year, in just 3 years’ time.

And what is this Government doing for it? Absolutely nothing—absolutely nothing. That is the disgrace of this Government: no forward looking, no sense of the future, manage it by sleepwalking, hope that nobody notices, and come back next year and it will all be the same again. That is what this Budget represents.

There is no future in this Budget. There is no hope in this Budget. The next generation, and the next Government, and the future generations of New Zealanders are going to have to cobble together and patch up the failures of this Government, including meeting the cost of New Zealand superannuation.

This mob over here have no sense of future and do not know what to do about it, so they crib around the edges—a million dollars here, a million dollars there. It is not enough to build a strong, resilient New Zealand. They failed. They have failed.

So we have had the surplus, we have had the surplus chimera, we have had the ethereal result—it will not happen. And then we have got the challenge of dealing with child poverty. Well, we will give them some credit for that. They have taken a step.

They have taken a step: they have increased benefits. But they paid for it by taking it out of the future-building initiative: KiwiSaver .

It has taken away the kickstart for those future generations of New Zealanders who need to save—and know it—for their retirement, all those parents lining up to sign their kids up for it because they know that at least if they get that, at least if they get that kickstart, then by the time they get into their adult lives, they have got a little nest egg to continue to build on.

It is just an incentive you have when you are a youngster to carry on the saving. This Government steals from the next generation, and it does not know what to do about their needs. That is what it is doing. It is taking off the top of Working for Families to pay for it.

This is a “fiddling-around Budget”. This is a “fudge-it Budget”. The Government is doing it again. It has no long-term plan.

And then there are the initiatives on housing. Well, this is the biggest rort, of course. This is the biggest rort. It has got new tax plans, new rules that Bill English proudly announced today: “We’ve got new rules on tax.”

Two days ago he was saying that they probably will not work. I do not know how they got left in the speech when 2 days ago he was saying that they will not even work, but he has put them in there.

I want to say this about the house build programme, because the Labour Party has been saying for some years that the way to deal with the housing supply problem, the way to make sure that more Aucklanders get into an affordable home, is that the Government, the State, must lead the house building programme. So I credit this Government for taking the first step of saying that it will do that, of putting land aside.

But I want to say this: we will support that initiative on one condition. I look at John Key and I look at Bill English and I look at Nick Smith and I look at Steven Joyce and I look at Paula Bennett. None of them will look back.

I say to each of you, because you are the ones in charge of housing, you know what is going on: make this promise to New Zealanders.

Make the promise to New Zealanders that every single one of the houses built on the land you have released in the announcement today will be an affordable house that ordinary New Zealanders can get into. Make that promise today. You have got a dozen TV cameras around here you can make it to. Make the promise today, Mr Prime Minister.

Do not get on your hind quarters in 15 minutes’ time and flap about like a rooster on heat and give your usual dog and pony routine. Make a genuine promise, one that you are prepared to stick by. Be straight with New Zealanders. Tell them: “We are serious about affordable housing.” Make sure those houses are affordable houses.

And to Paula Bennett I say: make sure you discharge your responsibilities to all New Zealanders, to good New Zealanders, the hard-working New Zealanders who still hold on to that dream of getting their own home. And make sure you deliver. Your failure to deliver, if you cannot guarantee—

Hon Dr Nick Smith: The member opposed HomeStart.

ANDREW LITTLE: —if you will not guarantee, Nick Smith, that every single one of those houses will be an affordable home that ordinary New Zealanders in Auckland can get into, then you will have failed. You will have failed New Zealanders and you will have failed the test that you have set for all Governments, which is to look after average New Zealanders.

So far all you have done is look after your rich mates. That is not a policy. Your home build policy is not a policy for the property developers who contribute so handsomely to National Party coffers. It ought to be a promise to ordinary New Zealanders who want only to get into their own home.

That is what I ask you to do. That is what I am asking you to do. I want to say this about ACC. We have had the repeat of the promise about ACC, and we know that it is not a promise. We know that it is not a promise. It is “It could happen.”, “It might happen.”, “It’s 2 years away.”, “We’ve got further work to do on it.”

So I say this to Nikki Kaye and to Bill English and to John Key: make the promise. Look New Zealanders in the eye and say that you will cut ACC levies.

Sue Moroney: Do it now.

ANDREW LITTLE: You could do it now; Sue Moroney is right. You could do it now. You have not. You have held on to the cash. You have deprived good businesses and hard-working New Zealanders of their cash. Now you have promised that it might happen sometime in the future.

Make the promise now. Mr Prime Minister, look in those TV cameras when you are up there prancing around, and make the promise to good New Zealanders that you will see through to make those ACC cuts so Kiwis will have some money back in their pockets. Make a promise you are prepared to stand by. Make a promise that New Zealanders can rely on and trust. It would be the first one in your political career. This is a disappointing Budget in so many other ways.

This is a Budget where New Zealanders were hanging out, looking for an expression of hope for the future.

This is a Government that has been 7 years in office—7 years in office—and that has enjoyed the best of times: record high dairy prices, record high export volumes, and growth of over 3 percent.

Now we know it is all going down. You look at the projections and they are all about to go down.

This is as good as it gets. New Zealanders deserve better—New Zealanders deserve better.

They deserve a Government that is thinking about the regions, that is thinking about what happens to the regions when that dairy cash dries up and those small towns and hamlets across New Zealand struggle to wonder what to do next.

The farmers, the stock and station agents, and all those who contract to the farming sector have to buckle down, batten down the hatches. They are wondering what to do next. They are going to look at this Government and say: “You let this happen. It didn’t have to be like this. You had the opportunity. You had the good times. You could have prepared better.”

And they will say and we will say that you blew it. Bill English and John Key, you blew it. You have turned up today with a Budget that just continues the same sleepwalking, somnambulant management that we have got used to for the last 7 years. It is not good enough—it is not good enough.

New Zealanders deserve better, and we need better. We are facing some difficult times ahead. The Government knows it; we all know it. New Zealanders know it, and they were looking for an expression, for a statement of vision and leadership such as we have never seen before with this Government. And we have not got it.

It has been more of the same—fiddle around the edges, faff around the sides, and carry on as if no one is noticing. Well, they are noticing.

What we now need is a Government that is genuinely focused on the future. It is not just about dealing with the issue of making the books give the appearance of a surplus that is not going to happen.

It is about a Government that is focused on building a nation, and on giving people opportunities.

It is fine to lift the benefits, fine to help those people, even though you are making it harder for sole parents with kids at the age of 3 and over. That is going to be the real hardship. How are those folks going to cope?

It is fine to make some of those gestures, but what those people who are out of a job want is a job. What those people who are desperately in need want is more work—not the 1-hour jobs that Steven Joyce promotes and encourages; they are only half jobs, the sort of minuscule jobs.

They want real jobs that mean they can earn a living income and get ahead. That is what New Zealanders want.

The Government cannot even keep its promise to add the 150,000 jobs by next year. The Government has had to abandon that one.

The Government cannot even meet the promise to lift incomes by $7,000 a year extra by next year either. It has had to push that out too.

The Government knows how bad things are, and it serves us up this sort of mess of potage today and pretends that it is all sweet and rosy. Well, it is not, and New Zealanders know it.

New Zealanders are hanging out for a Government that is serious about lifting all New Zealanders, serious about what is happening in the regions, serious about what is happening down on the farm, and serious about what is happening in small to medium sized enterprises.

There is nothing in this Budget for them, except continuing to hold on to the ACC levies that the Government does not need to. The Government has whacked on a few extra taxes—a departure tax and an arrival tax—and it is going to tax every user of the telecommunication services with a new levy on the operators; $150 million a year.

Do you know who is going to pay for that? Ordinary New Zealanders. Do you know why the Government thinks that that measure is an OK thing to do? It is because it does not care about ordinary New Zealanders.

That is why for 7 years the Government has shut New Zealanders out of their own homes.

That is why for 7 years the Government has not cared about those living in dire poverty. The Government just does not care. We have seen more of that in this Budget today.

New Zealanders need a Government that is focused on a number of core things—diversifying our economy; making sure that the State plays its role in investing, and encouraging private investment in other sectors in the economy to boost and diversify it; making sure that our people, our education system, is prepared for the future; preparing young people for the jobs of tomorrow, not repeating the jobs of today; and really, genuinely fixing our housing crisis. It is nice to have the building plan, but it will not be fast enough, and there will still be people without a home in years to come. I think of people like Gene Simmons—not Gene Simmons; Gene Harris. [Interruption]

Mr SPEAKER: Order! Andrew Little. [Interruption]

[Continuation line: LITTLE: There is Gerry Brownlee. Gerry Brownlee says he was asleep.]


There is Gerry Brownlee. Gerry Brownlee says he was asleep. Well, he has woken up after 7 years now. He has woken up after 7 years and come to life.

I think of people like Gene Harris, who is in his 30s and is a marketing manager. He rents a two-bedroom flat in Hillcrest on the North Shore with his partner and his baby. He contacted us, because he is sick and tired of this Government, its arrogance, and its contempt, and of this Government laughing at people like him.

He told us this: “The opportunities are few and far between. Even if you’re on a good wage, you can’t get ahead, and there’s something just not right about that.”

Like so many thousands of other New Zealanders, a good man is struggling. He is working hard to get ahead and he cannot because of the failures of this Government. That is what this Government represents; that is what this Government has achieved. It has let down far too many others.

So Gene Harris is looking forward to a Government that is serious about building the nation, building our economy, strengthening it, giving him and his family an opportunity, and letting them realise their dreams of homeownership and a secure future.

Then there is Simon Paterson, who has also been in touch with us. He is an IT manager from Mosgiel, who has a family and, like many other Kiwis who live in the regions, he is sick and tired of seeing the regions neglected. He told us this: “Middle New Zealanders like me are feeling increasingly left out in terms of stuff like health care and education.”

We know that those figures on education today are not enough to fill the gap that has been slowly developing in funding for that sector.

He said: “There’s been tax breaks for the rich, but nothing for anyone else.” That is how he summarises this Government, and it is impossible to disagree with him.

[It’s easy to disagree with that claim – any well informed politician would know that.]

We need a Government that is focused on the future; that is focused on all of New Zealand; that wants to fix the real problems; that is thinking far ahead; that is not tinkering at the edges; that is not sleepwalking around letting more and more New Zealanders down; that is creating those real opportunities; that when it says it is going to generate more housing seriously does so; and that when it says it is going to lift incomes by $7.000 a year actually is serious, genuine, and honest about it and does so.

Not like this one—not like this Government that loosely makes promises it has no intention of keeping. That is what characterises this Government time and time again.

It is time to have a Government that can write a Budget that is good for New Zealand; that is good for all New Zealanders; that makes a difference; that will support the wealth generators and the wealth creators; that sustains the entrepreneurs, the innovators, the dreamers, and the doers; not a Government that faffs around the edges supporting the extremely rich who contribute to the National Party coffers but that does nothing for the vast majority of the rest of New Zealand.

Metiria Turei’s unkeepable promise

Green co-leader Metiria Turei has attacked Nationals budget.

Today John Key could have chosen kids.

He could have backed all the young New Zealanders out there doing it tough.

But instead the Prime Minister chose to give the bare minimum of help to our poorest kids and abandon the hopes of our younger generations.

Sneering at the most significant benefit increase for decades.

This stingy Budget is not for our kids and it’s not for those under 40 – the abandoned generations.

If the economy is not working for everyone, it isn’t working at all.

And how would the Greens get the economy “working for everyone’?

New Zealanders needed something different, something more, from the Budget today and didn’t get it.

There is an alternative. The Green Party has a plan to retool the economy for a better, cleaner future which provides opportunity and prosperity for everyone.

What plan, apart from tax more and hand out more? “Prosperity for everyone” is not a plan, it’s an impossible dream.

The Green Party is the only party prepared to stand up for younger New Zealanders – and that’s a promise we’ll be keeping.

If standing up for younger New Zealanders means speaking up like this then it’s a promise Turei can keep. But it promises false hope.

But if it means achieving anything significant then I think it’s an unkeepable Green promise.

Budget headlines

I’ve only seen headlines and summaries on the budget. Two stand out to me from those that the Herald has highlighted in Budget 2015: 10 things you need to know.

  • Budget deficit of $684 million this financial year.

That was signalled so is no surprise, and was expected to be a major criticism of Bill English, John Key and National,

  • A $790 million child hardship package, includes an increase in $25 of core benefit for beneficiaries with children.

In contrast that’s a major surprise.

And it isn’t hard to see that if the increase in benefits wasn’t included the deficit could have been avoided.

This is a very significant choice and signal from National, putting welfare of some of the poorest ahead of a long standing target.

Budget 2015

The budget will be presented in Parliament today at 2 pm.

I’ll be otherwise occupied so will miss all the excitement – but it usually takes the pundits a day or so to properly dissect it and give in depth analysis.

If you want to discuss it go for it here.

The budget phony war

The process used for the release of the budget is bizarre.

Details have been drip fed and hinted on over the past month or so.

And this week a phony war spins out. Parliament is debating something the opposition doesn’t know many specifics about. The budget will be delivered at 2 pm on Thursday. Question times on Tuesday and today are wasted.

The first question yesterday was a meaningless patsy from National MP Chris Bishop.

CHRIS BISHOP to the Minister of Finance: How will Budget 2015 progress the Government’s commitment to manage the Government’s finances, while delivering better public services?

Labour’s finance spokesperson Grant Robertson tried a bit of a hit in advance of an expected deficit projection.

GRANT ROBERTSON to the Minister of Finance: Does he stand by his statement that “we believe the strong underlying economy and responsible fiscal management can deliver a surplus when the final Government accounts are published next October”?

It would make more sense to deliver the budget on Tuesday and use the rest of the week of Parliament to debate it rather than extending a phony war.

Broken promise budget promises little

It’s been well signalled that the soon to be announced budget will break one of National’s long standing ‘promises’ – that they will balance the books by now after years of deficits.

National have to cop some flak for that because it’s been a major campaign plank. But attention will soon turn to what they are actually offering this year. A bugger all change budget could be as damaging to their re-election chances as an old broken promise.

A Dominion Post editorial is scathing – Budgets and broken promises.

Nothing can disguise the fact that this Budget also brings a big broken promise. It won’t supply the Budget surplus that National has promised for so long.

Prime Minister John Key and Finance Minister Bill English have been busy downgrading the pledge that they boasted about for so long; now it’s an “artificial target” and apparently doesn’t mean much at all. Yes, it was an artificial target. But it was National’s artificial target.

And they are also pessimistic.

Right now the fiscal cupboard is bare and it might stay that way for some time. The danger then is that more National promises, both large and small, will have to be broken. And that might end up really damaging the John Key brand.

The pre-budget announcements have been, inevitably, embarrassingly thin.

Are they under-promising while planning to over-deliver?

That’s an old political PR tactic, but if the delivery is still paltry then ‘steady as she goes’ might become ‘steadfastly going nowhere’.

Is there nothing available to deliver?

As English says, the big problem is that low inflation is putting a huge brake on the Government’s tax revenues. The effective cut is billions of dollars and it is forecast to last for years.

This and the collapse of dairy prices mean the Budget surplus might not even arrive next year.

National may be fenced in by their prudence – something voters have rewarded them for so far but there’s a risk they will swing away from it, especially if targets aren’t met.

Presumably, the Budget measures on child poverty will be small and disappointing. This might not damage Key much by itself. After all, his supporters are probably not personally much affected by the problem.

But, if more and more promises are broken and there is a slowdown in growth, the Key formula will begin to fray.

The Key formula is already fraying around the edges, something that’s inevitable by the third term.

But if a broken promise budget promises little for the future then the National Government may start to unravel.

English signals missed surplus target

Bill English has clearly signalled he will announce another deficit budget this month.It’s likely to be a small deficit relative to the size of the budget, but red ink is red ink.

On The Nation yesterday:

Well, okay, it would be nice if the number got there this year; it’ll just take a bit longer.

We’ll soon be in a position to start paying off debt. Our expenditure’s under control; the revenue’s a bit harder.

We think that it’s really important we get to surplus…it’s going to take a bit longer.

In the whole scheme of financial management over seven budgets this won’t be a big deal.

Except that English and National have promoted and campaigned on reaching surplus by now so conceding this target is a bit of an embarrassment to them. English will take this on the chin, outwardly at least, but he will be frustrated. At least he should be.

The financial crisis followed by the Christchurch earthquake made it a very challenging two terms for National and despite clocking up some huge loans they have managed things fairly well, and compared to many other countries (notably Australia) it’s been well managed.

Minister, you used the analogy of weight loss, but let me use another one, the All Blacks. They set a goal to win the World Cup; they don’t. That’s a failure, and they call it that. You set a target for a surplus, and you haven’t met it. That’s a failure, isn’t it?
Well, for a lot of people, the surplus is less important than the World Cup. But the thing about the World Cup is—
But it’s your target, Minister. Minister, you set the target. It’s your target, and you didn’t get there. Isn’t that a failure?
With the World Cup, there is a final, and you’re absolutely judged on the final. With a surplus, it can take a bit longer and you still get there. You don’t get another go at the World Cup.

It is a failure to achieve what English has promoted and what National campaigned on last year. It’s not a broken promise. It’s pragmatic. But it’s a failure to achieve a target.

You’ve set yourself a time limit, and we were supposed to be in surplus and you’re not going to get there. Can you not concede that that is a failure?
No, I don’t call it a failure. It is what it is, and that is for the 14/15 year, we budgeted $370 million surplus. It looks like it will be a $500 or $600 million deficit, and the surplus will be the next year. So we’re on track.

But if English and National can’t get to surplus by next year’s budget the pressure will pile on them. They could be judged at the 2017 election by extended failure to achieve a surplus.

Carrots versus cost of carrots

As Labour release more policies they are differentiating themselves more from National.

Finance spokesperson David Parker recently released Labour’s alternate budget. This was seen as well thought through and prudent, although there was some criticism from the left for it being too miserly.

Over the last week Labour have switched to education. This has the appearance of loosening the purse strings as carrots to entice voters have been prominent. These include:

  • Reduce class sizes by 2018,  in primary schools from 29 students to 26, in secondary schools from 26 students to 23
  • 2000 new teachers
  • Computers for all students age nine and up
  • Affordable payment plan for parents to pay for new technology
  • Modernise school buildings
  • End voluntary donations by providing annual $100 grant per student.

All of those policies will cost more. Labour say they will re-allocate National’s funds to better utilise (and better pay) the best teachers, but that may not cover all these policies.

Details aren’t available yet online, they only have very brief summaries and a link to a factsheet doesn’t work. Labour will need to cost their carrots or they will get hammered by National.

Labour are differentiating themselves from National on education policies along the lines of more versus better.

Additional teachers will cost more but on top of the cost of salaries is the cost of training and administrative overheads and extra classrooms will be required.

An updated alternate budget may be required.

But Labour are clearly differentiating themselves from National.Labour will be promoting the extras they are offering, while National will be questioning the cost of handouts.

The election could be fought on carrots versus cost of carrots.

Budget winners and whiners

There’s no way of knowing if the budget is an election winner for National (it won’t harm their chances and will probably enhance them) but as a smart, sensible, pragmatic budget that appears to care for families it has to be a winner for National for the moment.

Peter Dunne is claiming it’s a good budget for UnitedFuture with some justification. It nudges Paid Parental Leave in their policy direction and with Dunne having an involvement in health and families the extension of free doctors visits and prescriptions for children have to be a personal win.

There is little specifically for the Maori Party but it won’t do them any harm.

The budget was never going to slash public spending so ACT don’t win anything from it.

The opposition parties made it look like they were losers with very negative attacks, but this may clash with general public perceptions.

In reality Labour mustn’t be disappointed with aspects of this budget at least. David Parker has acknowledged this. If this was a Labour budget they would be applauded, and it won’t cause them any difficulties if they take over Government and economic management later this year.

But David Cunliffe has chosen a very negative reaction, which portrays it as a loss despite claiming National have stolen some of their policies. And National have cunningly sold it as both prudent and caring, and Labour are left claiming they would do more – which means spend more, so their claims that the surplus is fudged looks sticky.

Russel Norman tried to portray it as a ‘cabinet club’ budget, benefiting a select few rich people at the expense of the poor. It don’t think he’ll get much credit for this approach, it’s hardly a way to build support.

Winston Peters grumped about it as if the country has lost something but it’s his mojo that’s hard to find.

Hone Harawira complained there was nothing in it for Maori and “we didn’t even get crumbs for kids” but both those groups will benefit from more free health care and an improving financial position for the country. What Harawira means is he didn’t win handouts for his constituency.

The handout mentality didn’t win anything from the election. Many will applaud that.

National have crafted a crafty budget and are the big winners, with Dunne picking up some of the glory.

It won’t win the election but it will make it harder for Labour and Greens to win. They were practising losing speeches yesterday.

They can still win the election, but they have to start looking like potential winners.

Yesterday John Key and Bill English looked like they were on the podium already. People like voting for winners, not whiners.


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