Budget rhetoric begins: Should we expect anything new?


So, the annual burst of pre-budget rhetoric from the Government and the Opposition has begun.

And as both mainstream parties fire up the megaphones, and the smaller parties try to find any media outlet that will listen, the man on the street can be forgiven for wondering if there is any point in listening. Of course there is, but when two mainstream parties in an-M.M.P. environment that have very little that is obviously different about them on the surface, are trying to drown everybody else out, it is easy to get despondent.

After eight years, I have no great hopes. There are so many agencies that have been cut down to the bone that New Zealand bureaucracy in some respects is a person reaching a crisis point – overworked, with more and more stop gap measures being implemented. What the person needs is a change of direction, a change of philosophy.

The Police, Health, Social Welfare, Tertiary Education, Defence Force among others are all in need of a long term funding increase. The Defence Force should ideally be receiving between 1.5-2% of G.D.P., but the funding at the moment means a large portion of the Royal New Zealand Navy is tied up in Devonport Naval Base, unable to put to sea or carry out exercises. And as mentioned a few days ago, the Police are in crisis, due to a lack of funding which may explain why the public think revenue gathering is becoming a higher priority for the Police – they are underfunded, so they have to do their own fundraising.

Where is the Government going to find money for this?

One source of income that is not being tapped, and which would provide a substantial increase in revenue, would be to close remaining corporate tax loopholes. An estimated N.Z.$7 billion in tax is apparently owed by large corporations such as Facebook. With that kind of money, paying off some of our debt, wiping the waiting list  and setting the rest aside for emergency spending would be quite feasible. But is anyone quite that forward thinking?

Another option would be to increase the slice of royalties that New Zealand gets from mining, existing deep sea drilling and exploration projects. Since many of the companies involved in this would have lobbied for the current easing of restrictions, I cannot see how they would approve their slice of the profits being reduced and it the Government would be unlikely to do something that might undermine mining sector support.

Of course there is also increases in income tax, though ideologically this is totally improbable with a National-led Government.

Finally, but equally unlikely, is that the Government reprioritize spending. It is well known that $1 billion a year every year is getting spent on roading projects. Whilst there is definitely a case for road expenditure, the transport budget is heavily weighted in favour of roads, at the expense of railways, the merchant marine and public transport.

It is also possible that with election year being next year, the Government may crimp spending so that it has a bit of a war chest of money ready for putting into things that the public want. As all Governments do this, one cannot blame National any more than they can Labour should they adopt this approach.

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