Key and English are trying to soften us up for big public service cuts this budget. They tell us it’ll just be ‘nice to haves’ and that the private sector will step in to fill the gap when they cut too close to the bone. The important thing to realise is that every time the public service doesn’t provide us with something either we have to buy it out of our own pockets (usually at greater cost) or we don’t get it at all.
It’s like when National cut ACC. It didn’t stop people with injuries needing treatment and income to live, it just stopped them getting that from the state. Instead, they have to pay out of their own pockets or if they can’t afford it, as is likely, they just end up bankrupted and destitute.
Now, I’m not a ‘not one step back’ kind of guy. If there is wasteful government spending, chop it. Start with the Don Brash retirement fund, oops, I mean the 2025 Taskforce. Cut, too, motorways where the costs outweigh the benefits and subsidies for polluters. But don’t cut funding for early childhood education which delivers $13 of benefit for each dollar spent. The cuts that have already happened there have just pushed the costs on to parents. Some are now paying $60 more a week. Many simply can’t afford it and we as a country lose out on those kids not getting the best start to their education (of, course the right have never really understood the concept of investment – pillaging is more their forte).
But the cuts that are coming are much deeper than that. $3.75 billion in real terms out of existing programems by my estimate. A lot of that will come just from not giving departments more money to match their increased costs to provide the same level of service due to inflation and population growth. Some more will come from ‘re-allocations’ which will see existing services slashed to pay for Christchurch. And some will come from out and out cuts.
It doesn’t have to be like this. The government has choices. It has chosen to create the fiscal mess we are in by cuting government revenue as a percentage of GDP from 33.5% in 2008 to 29% today. You want to know where the hole in our budget came from? There it is. And it was caused by giving $10 billion worth of tax cuts to the wealthiest New Zealanders.