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Campbell on the budget

Written By: - Date published: 7:05 am, May 27th, 2017 - 31 comments
Categories: budget 2017, class war - Tags: ,

Gordon Campbell at Werewolf:

Gordon Campbell on yesterday’s Budget

It may seem like Oliver to be so bold as to ask the Finance Minister for more gruel – but what the Dickens, Steven Joyce… is this Budget really as good as it gets? Supposedly, the public was going to receive significant rewards – an election year lolly scramble no less – for the eight years of belt tightening that they’ve endured, and for the rundown of essential public services.

Well, what Budget 2017 delivered instead in Education and in Health (see below) were allocations barely sufficient to maintain the current levels of service delivery, given the costs associated with population changes, inflation (forecast at between 1.6% and 2% per annum over the next four years) rising costs and the provision of a limited number of new services. Not to mention the looming health needs of a rapidly ageing population.

A lot of yesterday’s Budget was smoke and mirrors. To take a small example: a $27 million fund formerly existed for elective surgery, reduced to $12 million last year, now boosted by this Budget’s extra $6 million input. Do the math. Ultimately, it still amounts to a roughly $9.7 million cut in the prior level of funding for elective surgery. Despite all the media headlines about the shortfalls in mental health, this Budget (also see below) delivers funding for mental health barely sufficient to maintain the current level of services.

Before getting into the details of what it did contain, keep in mind what the government has chosen not to do. Much spin has been devoted to the alleged fostering of economic “resilience” in this Budget. But while using the surpluses to further reduce our already low levels of government debt, Joyce has hardly used the remainder to future proof New Zealand against the challenges that it faces. The problems of income inequality and climate change for example, have been virtually but ignored in this Budget

On social housing, yesterday’s Budget documents again provided only a paltry injection to that sector. Come 2018, the Budget also predicted, housing prices will resume their upwards climb, before being forecast to fall back to more modest levels in 2019 – 2021 as significant numbers of new houses get built. That trajectory seems rather optimistic, given (a) the capacity constraints on house building already evident in the construction sector in Auckland, and (b) the upwards pressure on prices that continue to be generated by immigration and low interest rates. There is nothing very substantial in the Budget to dampen the house price spiral and to make housing more affordable – such as say, action on capital gains, or against negative gearing.

Cumulatively, these changes will deliver only small relief to the living costs of vulnerable families. On that subject. the $20 boost to the accommodation supplement that the Budget offers to students who are eligible for the student allowance – while welcome in itself – has been all too typical of the tokenism on show yesterday.

As I asked Joyce at the Budget lockup: “ What is to stop landlords from treating this increase as a green light to hike up rents?” (Especially since the allowance rise kicks in on April 1st next year. Now, then and subsequently, it will be open season for landlords, on tenants.) In reply, Joyce said that the government would be “keeping an eye” on landlords, to ensure they did not abuse the situation. Golly, that’s sure to stop this measure from becoming a subsidy for landlords. …

An excellent “long read” for plenty more.

Other reaction:
Average family: ‘You get quite despondent even reading Budgets’
First home buyers question how the Budget helps them
‘Too little, too late’ – community groups say Budget fails to turn the tide for the most vulnerable
Budget 2017: NZ working hard to stand still
Max Rashbrooke: A Government trying to make up for past neglect
‘Anything extra is a bonus’ but some others say tax relief in Budget is a drop in the bucket

31 comments on “Campbell on the budget”

  1. Keith 1

    I commented elsewhere but Robertson on RNZ yesterday left me cold.

    He agrees tax cuts are fine. Because he certainly didn’t say if we want social services and 100 other improvements, we need tax rises or in the least no tax cuts at all!

    He agrees the rental supplement increase is fine also, no thinking on rents rising as a result, no, he couldn’t see that as a direct result or even a possibility.

    In fact he agreed largely with the whole charade but differed on semantics of how the tax cuts should be spent.

    I know exactly the way National operate, I know they will cut funding here and there to more social and base government services, will borrow more and claw back the cuts via GST rises and in ways unseen, bankrupting Solid Energy via unaffordable dividends ring any bells? But at least I know.

    But Labour, “we’re just the same but a teency weency bit different”. Sorry team, Nationals warped view on the world does not inspire me and nor does yours Grant!

    • tc 1.1

      Robertson is part of the problem not the solution, greens aren’t much chop either but a lot better than labour which isn’t hard.

      National would be delighted at the true lack of choice voters have in sept.

    • Karen 1.2

      Labour has committed to a major tax review in their first term. This has been explained many, many times on the Standard.

      I suggest you start comparing the policies of the parties instead of misrepresenting radio interviews in order to reinforce your own prejudices.

      • Keith 1.2.1

        It’s exactly the way he came across, no misrepresentation.

      • Nick 1.2.2

        The thing with a tax review is it can end up being not much change. Robertson does not yet come across like a Finance Minister. I find it difficult to follow what he is talking about because he just starts waffling or talking vaguely, then just sounds like a BS politician, not a human. BTW I want a Labour /Green / NZF Govt.

        • Karen 1.2.2.1

          This will be a major review and I expect Deborah Russell will be take a pivotal role. She and Terry Baucher have just published a book “Tax and Fairness” that I haven’t had a chance to read yet but I expect it will provide an idea of her thinking.

          I am not a big Grant Robertson fan either but Keith’s interpretation of that interview was just more of the same old rhetoric you get so much of on the Standard (there is no difference between Labour and National, there is nobody worth my vote etc).

          This is election year. If people want a change of government they need to party vote Green or Labour because voting for NZF or the Māori Party increases the chances of another National led government.

          I have issues with some of the policies of both the Greens, but this is election year so there is little chance of influencing policy. The policies they do have are much better than the other options so I will do what I can to support them both. If the Nats get in again the already high level of suffering amongst the poor and vulnerable communities will increase and the environmental costs to NZ will be severe.

          • Keith 1.2.2.1.1

            Karen, I badly want Robertson to be on top of his portfolio and he has a lot of material to work with. It is excruciating waiting for him to nail the National Party but time and again he is missing in action, golden opportunities wasted.

            There is so much to be made of Nationals ineptness and their transference of money from the poor to the wealthy as they did with this budget.

            It was so obvious that this so called surplus has been bought off the back of budget cuts and freezes to public services. He should have been hammering National on this well before the budget AND offering the viable alternatives. But there has been a deafening silence. In fact I have heard him saying how well the economy is going in the past as well, when for the few it is but the many it is not.

            There is NO room for tax cuts, not unless you subscribe to the every man for himself theory that National is slowly but surely heading us towards. I did not hear and have not heard Robertson arguing against tax cuts.

            In short he sounds like a man who is out of his depth in his portfolio and or is frankly disinterested in it.

            National are the benefactors of an indifferent line up of opposition spokesmen, but most especially Labours shadow finance spokesman.

            • Karen 1.2.2.1.1.1

              As I said, I’m not a big fan of Robertson either, but I disagree that he suggested support for National’s tax cut (if you are referring to the Morning Report interview). Labour have consistently rejected tax cuts, including Robertson.

              http://www.labour.org.nz/the_real_costs_of_national_s_election_bribe

              Do I wish Labour were more radical in their policies? Always. Do I wish both Little and Robertson were a bit more inspiring in their rhetoric? Absolutely.

      • The Chairman 1.2.3

        “Labour has committed to a major tax review in their first term.”

        The thing is, Labour need policy now to win over voters to ensure they get a first term in Government.

        • Craig H 1.2.3.1

          And their housing and education policies are not enough? Their promise to properly fund the health system, particularly mental health?

          • The Chairman 1.2.3.1.1

            It may be enough it one was happy with lowering the bar, but if one wants to win the election, hence going by the polls, clearly not.

            In this case we have the Government offering to throw money around, yet all Labour can offer is we’ll have a review. Which do you think voters will find more appealing?

            • Craig H 1.2.3.1.1.1

              Labour have promised to spend money:
              – 100,000 houses over 10 years
              – Housing NZ spending all surpluses on new houses rather than returning a dividend
              – three years free tertiary education
              – paying employers the dole to take on apprentices
              – all <25 NEET given 6 months full time employment
              – a nurse in every secondary school
              – reversing the $1.7 billion underfunding of health
              – resuming contributions to the Cullen Fund

              There are other policies still on the table like the new parent package that will involve spending money if they are retained (as seems likely), but they've definitely put spending plans out there.

              • The Chairman

                I was referring to their tax stance.

                But yes, overall Labour have committed to Government expenditure. However, I believe their lack of policy coupled with a number of policy lackings is contributing to their failure to gain traction in the polls.

                Of course, they believe they know better.

  2. Foreign waka 2

    Landlords not raising rent with an increase in supplements? Yeah right, I can see a Tui board coming up.
    Of cause they will, some months down the track when no one has any interest on the issue anymore. This is why social housing was build in the first place.

  3. Carolyn_nth 3

    On the diminishing health budget. I am due for a fairly routine ENT operation very soon. My GP had thought the hospital would keep me overnight, as that had been the practice in the past for such ops.

    At my pre-op appointment this week, I was given strict instructions because of the potential after effects of the anesthetic and pain killers. Someone must collect me after the op, the same day, and after a bit of time in recovery at the hospital. ie they do not have the resources to provide me with a bed for the night.

    The instructions are also that I must be taken home by car or taxi, and not public transport. Also someone must stay with me overnight to keep a watch in case of any adverse reactions to the op or anaesthetic (all operations involve risk). I shouldn’t do any cooking, or sign anything in the 24 hours after the op.

    Just how practical or realistic are those instructions for some of the least well off sections of the population, elderly people, etc?

    This is part of the diminishing health care system.

    • tc 3.1

      It’s vanished in some parts and the folk within it who care are cracking under the strain.

      Top surgeons I’ve spoken to are very concerned at the slave driver mentality national have installed atop the DHB’s, screw wellbeing just tick the box as another procedure done.

      • SpaceMonkey 3.1.1

        I think I am on record having said this before but from my experience on the inside on the egde and around the health care system… mainly primary, secondary & aged care… looking in, it’s clear to me that the whole system is getting by on goodwill alone.

        • Psych nurse 3.1.1.1

          Goodwill! after another afternoon of chaos in what now passes for acute mental health I would love some goodwill. Picture this 16 bed unit, 15 patients, 5 staff, 1 short of establishment because none are available. 2 patients on a 1-1 nurse special because of suicidal behaviour = 3 staff for 13 patients, halfway through the evening an admission requiring 2-1 care because of the risk of violence = 1 nurse for 13 patients. Guess who gets pilloried in the press and coroners court when something goes wrong, not the system, not the Minister of health, it will be the recent graduate Nurse struggling to cope.

        • greywarshark 3.1.1.2

          Space m
          From what I hear, this is the case. Thank you to all those good people doing the work. And no thank you to all the people providing themselves with the type of lifestyle that provides comfort and the option of enjoying it.

          When it comes to thinking as a nation about all of the people, it is SEP. The young ones don’t even know what national thinking is, except perhaps when they are gathering behind the All Blacks or such.

      • Keith 3.1.2

        This is astounding that any government would put tax cuts over preventable disesase treatment. What scum.

        We inch ever so subtly and carefully so no one notices, to that neo liberal nirvana of small to non existent government.

        • greywarshark 3.1.2.1

          “small to non existent government.”…
          and outsourced to Manila.
          So what are we going to do about it?? What levers do we have?

    • Karen 3.2

      This has been happening for a couple of years now – that’s what happens when you cut health spending as the Nats have done.

      In theory, someone who is alone and had nobody to stay overnight with them would be allowed to stay in hospital, but there is a lot of pressure applied. I suspect some patients just say they can get someone to stay even if they will be alone. It is hard to say you have nobody willing to stay overnight with you, and often people don’t like to ask family and friends if they know it will be difficult.

      • Karen 3.2.1

        Just saw this – the Nats have halved the funding for the Rheumatic Fever prevention programme. This is a poverty related disease that is now virtually unknown in developed countries but here in NZ ….
        It is prevalent in areas where there are high Pasifika and Māori populations, like South Auckland and where there is overcrowding and cold, damp homes.

        Rheumatic Fever can mean a lifetime of disability and a lot of time in hospital – so it is a typical shortsighted budget cut from the Nats.

        http://beta.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11864132

        • indiana 3.2.1.1

          If as you say, there is a smaller range of the population that needs this funding, then it makes sense that the total budget can be reduced. Why would you keep the previous years funding levels if you don’t need all the money? If you downsized your car, would you still keep buying petrol as you did for your larger car?

      • Carolyn_nth 3.2.2

        Yep. Had my sinus op yesterday. The doctors and nursing staff were great. Nurses very busy when I was recovering in a ward, but they were great. I needed food to settle my stomach which was queazy from the anaesthetic. I’m glad they told me it was roast chicken, otherwise I wouldn’t have known.

        I’m lucky to have supportive family. My nephew was great, patient, kind, waiting for me to be ready to bring home (so much for selfish millennials) . I’m sure there will be many others not so fortunate.

        I had a lot of waiting around for the surgery, because they were behind schedule. They are doing some Saturday surgeries in Auckland, to clear a backlog. Probably only been able to do urgent surgery for a while, so the less urgent ones get put on a back burner.

  4. Craig H 4

    http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11863646

    John Roughan hits out at the budget while giving the last Labour government massive props.

  5. greywarshark 5

    But while using the surpluses to further reduce our already low levels of government debt, Joyce has hardly used the remainder to future proof New Zealand against the challenges that it faces.

    What the hell is that all about. On the one hand the country is being run as if it was a company bought with leveraged funds. All of a sudden it becomes a country where it is expected to balance its budgets, yet the management of the country encourages personal consumer debt and at the same time being run down towards austerity.

    This actually is what the takeover business does to the purchased, it squeezes it of any assets it can sell, it reduces the costs by cutting staff and services, it reduces quality gradually, it trades on a previously well-known brand but delivers with minimum attention to quality, it doesn’t carry out regular maintenance and renewal of equipment, it becomes inefficient, it fudges or ignores complaints and advice of failures. Destination – plughole, but preferably by selling to some other entity that can run it as a shell company or cover for something nefarious.

    Actually it is a wee bit like how Ansett was when NZ bought it. We probably got the idea from Oz and that is what Key talked about when he was supposed to be sticking it to them for arresting NZs they decided they didn’t like, like Nazis coming knocking on the door to take the ‘undesirables’ away.

    Cry the beloved Country was the name of a book about a country that was being oppressed. And that is what we need to gather together over if we want a country; to keep it in the hands of all the people not just those who want to take away the icing, and then the cake too.

    The book was a story about South Africa after a long period of oppression by the boorish Boers. (And they have now set up a bantustan for only approved white Dutch and German gened citizens, with their own currency.)
    http://www.dailymail.co.uk/news/article-2321236/Orania-Whites-town-South-Africa-Afrikaners-dream-building-state.html

  6. Craig H 6

    Increase in take home pay courtesy of the threshold movements and IETC removal:

    Income up to $14,000: none
    Income $15,000 – $22,000: $1.35 per week, per thousand
    Income $22,001 – $23,999: $10.77 per week
    Income $24,000 – $44,000: $0.77 per week
    Income $45,000: $3.27 per week
    Income $46,000: $5.77 per week
    Income $47,000: $8.27 per week
    Income $48,000: $10.77 per week
    Income $49,000: $13.17 per week
    Income $50,000: $15.58 per week
    Income $51,000: $17.98 per week
    Income $52,000 and up: $20.38 per week

    Obviously, with WFF and Accommodation Supplement changes, these will generally be dwarfed, but for people on lower incomes who don’t have children, they’re not getting much, so Labour has some room to court them, probably via minimum wage increases.

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