It struck me, this last week of budget headlines, how joyless our current coalition government is.
I flew to Wellington on Budget Day after the death of a friend whose first job – at 14 and much to the relief of his high school headmaster – was high country sheep droving, and whose life thereafter filled the Port Nicholson Yacht Club with friends and family to celebrate his cheerful and highly successful patchwork life as a country pilot, Southern Ocean cruising man, deep-water racing crew and businessman.
Greens co-leader Marama Davidson was on the same flight to the capital, and I didn’t envy her the day.
‘Winners and losers’ was the dominant budget headline the next morning; ‘Winners and strugglers’ seemed the most sapient, and even the apologists could find little substance. The budget had been a thin copy of the state-shrinking, ‘trickle-down economics’ of the 1990s.
As a nation we were once far ahead in terms of social equity, individual self-confidence, opportunity, clean-green ethics and high up in the happiness index. Now The Guardian quotes Shane Jones, to our shame.
While conservatists leaned in on the tenuous rise in the state’s overall core spending, author and research fellow at the school of government at Victoria University Max Rashbrooke said that a truer measure is state spending as a proportion of GDP, which tells us how much of our collective revenue we are devoting – through government – to solving our collective problems.
“On this measure, government spending will shrink from 33 percent in 2024 to 30.9 percent in 2029, closer to the conservatives ‘holy grail’ of 30 percent of GDP.
“This leaves less money, relatively speaking, for tackling collective challenges like poverty and climate change; our collective support for each other will diminish.
“It has never been explained why this 30 percent figure is so magical. And indeed it is hard to justify,” said Rashbrooke, who has long pointed out that the governments that deliver the best public services in the world often spend 35-40 percent of GDP.
“If we had their capital gains, inheritance and wealth taxes, we would have another $20-30billion to spend repairing our frayed public services.”
Borrowing should be reserved for long-lasting future capital expenses that will benefit future generations, while current spending should be balanced against increased revenue, he said.
“According to the Inland Revenue, the richest New Zealanders pay half the tax rate of we ordinary folk, so there is plenty of room for that.”
We have, he said, “seen that movie before”, in the era when trickle-down economics was the dominant mantra and, between 1984 and 1999, incomes for the poorest half of the country fell.”
This time, the government has, notoriously, turned its back on pay equity, banking over $12b in ‘savings’ by gutting women’s pay claims and spending the money on military helicopters, said Rashbrooke.
The ideological whipping continued and specious justifications to journalists prove ever more revealing, while the gap between winners and losers is ever more unequal.
And unfair, leaving commentators to become less circumspect.
Janet Wilson in The Post pointed out that teenagers had effectively been cut loose from the country’s welfare safety net. “Making mums and dads responsible for their unemployed 18 and 19-year-olds will no doubt win nods of approval in the conservative heartland, but how effective this move will prove to be is debatable.
“Means-testing parents to gauge their ability to support their adolescent kids will no doubt reveal that most of them are in no position to do that – which is why they applied for Jobseeker in the first place.” Wilson said.
Is that going to get them ‘off the couch playing PlayStation all day,’ as Willis told the parliamentary media lock-up questioning the purported savings of the $1.7 billion the government estimates it will save from the policy? It doesn’t even come into effect until 2027.
Halving the government’s annual $1.1b contribution to KiwiSaver epitomises the sea of red ink sloshing around the government’s books and it’s going to be around for the next four years, said Wilson.
“Willis’s contention in the media lockup that this budget would benefit working families is the kind of bald-faced poppycock that all politicians indulge in when trying to get their policies over the line. Nothing could be further from the truth.”
The finance minister’s extra $14 a fortnight for households that earn less than $100,000 is hardly going to build that robust next generation that we want to be remembered for, having shrugged off Covid and its massive impositions on their educational opportunities to become the tough, resourceful, enquiring, healthy and energetic young New Zealanders that we need and want them to be.
Whole, talented and, yes, cheerful.
The economy needs them, far more than it needs cheeseparing politicians and marauding overseas capital.
• Liz Waters
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