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.
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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
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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.
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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
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