Budget previews: the good, the bad, and the ugly

Written By: - Date published: 2:47 pm, May 27th, 2009 - 26 comments
Categories: budget 2009 - Tags:

As well as the usual pre-Budget announcements there have been a number of leaks. A quick review:

Good
Home insulation package: this is the Greens’ baby and could well be a highlight of the Budget in a sea of negatives. It would have been better if they had put in something about forcing landlords to insulate their rental properties. The risk is that the people in the worst quality homes, the poor renting from private landlords will miss out while the well-off get subsidies they don’t need (remember, this is the National Party that wailed endlessly about a few families on $100,000 plus getting small Working For Families payments).

$50 million for the ‘great rides’: Does anyone else think it’s weird that the $50 million figure Key told us would build a national cycleway happens to be exactly the amount they’ve decided they need for these great rides. Makes you wonder where the numbers came from, other than off the top of Key’s head. Not the recession-buster National made it out to be. Still, cycleways, sweet.

Tax cuts gone: good. Are you feeling richer for your tax cuts? Me neither. They haven’t made a blind bit of difference to the economy and if we hadn’t had them we wouldn’t be facing rising debt. This stupid barking for tax cuts has dominated our politics for five years. Hopefully we can move on to real issues now.

Bad
SPARC budget slashed: Part of a worrying trend for the government to cut primary health funding just so they can pay for a few more elective operation.

No 40 Hour Free for playcentres: National promised this in the election in return for the Playcentre Association campaigning for them. No money for it this year. Next year, maybe, or maybe not.

Ugly
Community and volunteer sector bait and switch: Paula Bennett has announced $40 million over funding for these groups but it looks like she’s quietly deleted the $320 million Labour had budgeted for them over the next three years.

Modern apprenticeships gone and polytech trade funding cut: This is just crazy. Why the hell would we be cutting investment in training during a recession? It speaks to a small-minded government that doesn’t plan for the future.

26 comments on “Budget previews: the good, the bad, and the ugly”

  1. Jasper 1

    Bad: Slashing funding for NGO. Womens refuge have been told to close down centres in Westport and Blenheim due to no more funding.
    It is likely they will also be closing: Kaitaia, Whangarei, Whakatane, Timaru, Dunedin and Invercargill.

    Yeah, smart move. Lets close all the Refuges in areas that are prone to excessive violence against women and children.
    Great stuff Nactzis!

  2. Mr Magoo 2

    “Why the hell would we be cutting investment in training during a recession?”

    Oh let me answer that one for you….

    …because people are now FORCED to go on training because they have no job. Why would you incentivise something that is going to naturally happen anyway?

    Apprenticeships are not something National have ever cared about.

    The cycle funding will come from cuts elsewhere. If National are extremely cynical and out of touch is will come from the “walkways and cycle tracks” budget or public transport in general. Budget moneygoround.

    Then they will hold that and the 9 day fortnight up as evidence that the big-wig conference wasn’t just a bunch of old white men giving each other a mutual.

    And it will STILL fool most of NZ.

    (PS: Just wait for the REAL goodies. You think all that security and hush hush is because this budget is going to be their shining triumph??? Mark my words. )

    GGGGGGOOOOOOOAAAAAAALLLLLL!!!!

  3. vto 3

    “…quietly deleted the $320 million Labour had budgeted for them over the next three years.”

    Who the hell cares what Labour budgeted for a period they knew they wouldnt be in power? They may as well have budgeted 320billion for the credibility it had.

    • vidiot 3.1

      Budgeted, but not funded, so many promises never fulfilled – remember the chewing gum tax cuts, the 20 hours ‘free’ childcare, the only the top 5% of tax payers shall pay the top tax rate, I could go on, and on, and on.

      • aj 3.1.1

        add to this national’s retreat on it’s ‘north of $50 tax cuts for the average worker’

  4. toad 4

    Eddie said: Modern apprenticeships gone and polytech trade funding cut: This is just crazy. Why the hell would we be cutting investment in training during a recession?

    They did this in the last recession too, and its likely the cause of much of the crime today that they keep blathering on about.

    Don’t these Nats ever learn? Even having to deal with the antisocial and criminal behaviour today of the unskilled and alienated Children of the Mother of All Budgets doesn’t seem to have taught them anything.

    • IrishBill 4.1

      And on a macro-economic level let’s not forget the massive skills shortage that helped limit our productive growth during the boom.

      Meanwhile the Aussies are spending $$$ on infrastructure projects that will pull more skilled workers across the Tasman just as happened in the 90’s.

      Hey, what ever happened to the great exodus? Did the tax cuts stop it?

  5. John Dalley 5

    What do you expect from Bill & Ben, they can’t even get their stories on the same page.
    Ben’s frightened of Standard & Poors and Bill tells use this budget is about whats best for NZ.
    Message guys, get on the same page if you want use to believe you know what your doing as a government.

  6. Mark M 6

    “This stupid barking for tax cuts has dominated our politics for five years. Hopefully we can move on to real issues now.”

    If we had tax cuts early in the Labour Governments term , maybe Cullen may not have had the money to saddle the tax payers of this country ( and our Children) with huge generational over spending committments .

    Those early tax cuts may also have caused a mind shift on the members of that Government.

    Phil Goff complaining about spending “up to $40000 for an expert advisor ” who has probably saved taxpayers several hundred million dollars , demonstrates how out of touch ,he and probably other members of his party.

    Its very easy to be blase about spending tax moneys , but if you dont pay any or your tax payments have come from tax payers money (i.e MPs salaries , Benefit payments etc)

    A lot of people in this country work very hard to pay their tacx and I for one am happy if the Government of my country spend a dollar as if its there last

  7. lprent 7

    I should do some artwork on the banner for black budget day 😈

  8. toad 8

    Ever wondered why most MPs (apart from the Green ones) resist a capital gains tax that would deter investment in property speculation and promote investment in productive enterprise?

    Well, just ask Chris Tremain, National Party MP.

    • Kevin Welsh 8.1

      Shit Toad, don’t get me started on that little weasel Tremain. Classic case of riding on the coattails of his old man’s fame.

      Having spent the last three years sitting behind the “chosen one” in parliament, all hunched forward trying to project the image of an attack dog, he must be suffering in his jocks after coming away with pretty much nothing when the baubles were handed out after the election.

      He made great political capital and far too many front page stories in what passes for the local rag, here in Hawke’s Bay, when he “went in to bat” (resplendent in cricket kit) for the local orchardists who were getting shafted by Aussie by not letting NZ apples into their market.

      When it came to local workers at the port getting shafted he was nowhere to be seen. Twat.

      Rant over. Back to the budget 🙂

  9. SPC 9

    I will only vote for a party which has CGT on any second property (I would allow no CGT on a first home being rented out to others and possibly a secondary holiday home if it was not being rented out). Fortunately I also support the Greens on most of their other policy.

    The S and P credit ratings agency says one of the reasons why we must have better government accounts than they ask of other nations is the high foreign debt financing our homes (it increased from $80 to $160 billion in 5 years).

    If the government had a CGT policy they would have more leeway in their budget without a ratings downgrade.

    Quite simply the National-Labour duoloply pandering to the landlord class (of which they are a part) is ruining this country.

  10. toad 10

    SPC, Green policy would exempt a “family home” from a CGT -as long as you are actually living in it.

    The rest of your comment really hits the button as far as I am concerned.

    • SPC 10.1

      I realise that toad, I was just adding that I would also exempt someones first home if they were renting it out (while they were living with their parents or OE etc) and also holiday homes where they are not rented out.

      • RedLogix 10.1.1

        CGT’s don’t work. Plenty of countries have them, and yet the property bubble was just the same if not worse in those places too.

        Besides if you are a property trader, you should be paying 30% Company Tax on any profits anyhow.

        The Greens really haven’t any real insight with this knee-jerk policy.

  11. Bill 11

    So a home insulation grant of $1500 for home owners is in the budget.

    Meanwhile…a $1250 or 33% home owners insulation grant already exists.

    http://www.pinkbatts.co.nz/besnug.asp

    “ENERGYWISEâ„¢ is a government initiative aimed at improving the energy efficiency of New Zealand homes. It provides funding to help middle income homeowners and landlords upgrade the insulation in older homes….”

    So the insulation grant in the budget = $250 over what already exists. And applies to currently ineligible rich peeps. Well done the Greens and Nact.

  12. Bill 12

    Oops! $1125, not $1250.

    So the $1500 = $1500 if you are already wealthy

    And $375 if you and your partner earn less than $100 000 (you’d have qualified for the 1/3 or $1125 grant)

    • SPC 12.1

      I find the National Party’s belated devotion to universal entitlements somewhat touching.

      But one would have to factor in the fact that most of those on over $100,000 in pre 2000 homes would have upgraded any house they purchased by insulating it. Many of those on this salary buying houses now, would be looking at post 2000 homes or looking for homes already upgraded (selling point).

      The good thing about the budget is that it will help publicise entitlements to the ($1150 to 1500) subsidy. Also will it now include heat pumps and not just insulation?

      • Bill 12.1.1

        So the honest thing would have been to better promote the existing grants and upped the max. available to $1500. Maybe even tinkered with the details of the scheme along the way.

        But to announce the $1500 as part of a budget as though the existing grants of $1250 did not exist…..as though the proposal in the budget was something entirely new?

        Nah. That’s just dishonest.

      • Bill 12.1.2

        Grants are already available for installing heat pump water heating, solar water heating and clean heating.

        http://www.energywise.govt.nz/funding-available

        Then there is this for landlords http://www.energywise.govt.nz/funding-available/insulation-and-clean-heating/funding-for-landlords

        Funding for landlords and their rental properties

        In New Zealand, 33% of our homes are rental properties. New Zealand has over 300,000 rental properties, and over a quarter of these are occupied by people on a low income. Many of these homes have substandard insulation, and often have inadaquate or inefficient heating (such as an open fire).

        If you are landlord with low-income tenants, funding is available to you for insulation for your house, and a range of other energy efficiency improvements. You can get funding for at least 60% towards costs of insulation for your rental property. Funding from other organisations is also available in some areas. Landlords need to contribute a minimum of $500 dollars to house improvements. The tenant does not contribute any money to the retrofit.

        • RedLogix 12.1.2.1

          Yes I’ve one older property I’ve been trying to get done fully for ages, but the local agency in the area keeps on running out grant money. I’ve been put off about 4 times in 18 months now.

          It’s all rather an inflexible process to have to go through, and trust me I’m highly motivated to get it done.

  13. jarbury 13

    So as a tenant in a very cold home what can I do? Call the landlord and beg?

  14. John Dalley 14

    jarbury.
    That’s about the size of it. I know a fairly compassionate landlord and he will not subscribe the the insulation scheme because of the $500.00. It would have to be made mandatory before most landlords will take any action.

    • RedLogix 14.1

      Again you miss the real problem. A full upgrade, ceiling, walls, windows, floor, new heating and done properly is around $15-25k.

      Yet the valuation of the property will likely either not change, or maybe increase $2-5k. The bank is not interested in funding it. The cash has to come directly out of the business’s cash flow.

      The tenant pays for all the energy costs, so the landlord sees no return on the investment, and in reality the rent is not likely to increase much either. (Rents are very peculiar thing, influenced mostly by number of bedrooms, parking, and location… ). The ROI period for the landlord is likely to be in the order of decades.

      With most properties barely cash flow positive these days, even the most motivated landlord finds this a major hurdle to leap over.

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