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Go nowhere budget

Written By: - Date published: 4:20 pm, May 24th, 2012 - 48 comments
Categories: Economy - Tags:

As expected Bill English has served up a budget with no greater focus than reducing a government deficit that really doesn’t matter much at all.

Of course he’s doing this at the expense of a whole lot of things that do matter – our kids’ education, our families’ health, our retirements.

What they’re offering instead is a series of hollow promises of more jobs and greater wealth. How are they going to get us there? Well there wasn’t a lot of a plan laid out for that and even John Key’s good mate, and fellow traveller, Mark Whelan described the forecasts used as making a lot of optimistic assumptions.

It’s not surprising this go-nowhere budget is what we’re seeing from English and National. It’s the same strategy they applied the last time they were in power – a slow constriction of government spend in the blind hope that the private sector will fill the void. And it’s going to get us the same systemic problems of ongoing recession, income disparity, skills shortages, and increased private debt (the real debt problem).

Admittedly this is no “mother of all budgets” but what people forget is that that infamous budget was surrounded by budgets just like this one. The fact English’s been around the small-government block before and seen the results make me pretty certain this is blind ideology at work rather than naive trust in the invisible hand.

With regard to the response, it was clear Shearer was running on a practised speech with little new information in it. My advice would be that if you’re going to make the (ill-advised) claim that economics goes over the heads of most Kiwis it pays not to follow up with a gazillion numbers related to economic indicators. I’d also have liked to see a bit more of a kick back against the austerity meme.

The fact John Key can use the phrase “zero budget” as a boast is indicative of an opposition that has lost control of the discourse on the economy – the phrase would be used pejoratively in any of (the many) other countries that are creeping out from under the recession. On that point – a note to the media. “Greece” is not New Zealand. Indeed the “Greece” meme from the government is absurd – it’s like your doctor telling you the only cure for your head-cold is to have your foot amputated – but you should feel lucky because Mr Greece in the next ward over had his whole leg amputated after he was crushed by a mercedes benz.

All this aside, there have been no real surprises in this budget. The tories are still taking us to hell in a handbasket, the opposition is still failing to do its job and the media are still failing to provide any analysis past the usual commentary on how it will sell. Frankly, the whole thing is predictable and depressing.

Update: I take back what I said about the media. There’s a particularly good piece by Brian Fallow here

48 comments on “Go nowhere budget ”

  1. joe90 1

    Great visualisation from Keith Ng at the bottom of RB’s post.


  2. redfred 2

    Death by thousand cuts springs to mind.

    I thought Shearer did alright, stayed on message gave the media no room to mess it up.
    Wait for next unemploymet figures, I reckon another percent increase easy.

    NO we aren’t Greece sick of the Public/Private debt ratio discussion, it is simpler than that we have our own currency, slippery money trader John knows that, yet he uses fear to drive thier agenda.

  3. lefty 3

    This is all so sad.

    Eventually voters will get sick of National and vote in a Labour/Green (or a Green/Labour) government who will screw us a bit more gently.

    We will be so happy to have rid of Key and co we won’t even mind for a few years.

    Then it will be back to the tories again.

    As a nation we must break out of this destructive cycle of behaviour.

    • Hetodotus 3.1

      Could not agree more especially listening to bill and David on zb .is everyone in nz financially illiterate ? Given what both said and where is ther a future for nz?
      English has bullsxxt gigures and Parker over talks the initial result of a cgt and both ignore how to actively solve our current account.

    • Dr Terry 3.2

      Oh, my gosh, how right you are lefty! I guess we all can only hope to see righteousness in this country within our life-times. Meanwhile, best hope is the Greens!

    • fatty 3.3

      “Eventually voters will get sick of National and vote in a Labour/Green (or a Green/Labour) government who will screw us a bit more gently.”

      Good call lefty…its the blue dick that’s in now right?…cause its hard to tell these days.
      People have to stop believing Margaret Thatcher’s claim that ‘there is no alternative’?
      Believing Thatcher makes it true

    • Colonial Viper 3.4

      Then it will be back to the tories again.

      History shows that NZ voters prefer Tories more often and longer than they vote Labour.

  4. Carol 4

    I didn’t think Shearer’s speech sounded like someone else wrote it, but Shearer delivered it with some passion – sounded more like he meant it than Norman in his worthy speech.

    Winston performed well in an entertaining way. Hone was pretty good.

    Banks repeated a lot of neoliberal platitudes, as did the Hair.

    • IrishBill 4.1

      I think he would have written it (with the usual suspects of course). But it struck me that it could have been written a few days ago and practised (and probably was). I also though his angry hand on hip stance has been pinched from Goff – which isn’t a bad thing, Phil always did a good version of outraged dad.

      • Carol 4.1.1

        I think Shearer probably drew up the content, but there were some very good rhetorical flourishes that I thought didn’t really sound like him. Shearer did sound sincere about the content.

        The bit about paperboys etc, having their tax credits being cut probably was written in direct response to the budget today.

        • Dr Terry

          Please do not give me “sincerity”! Oh, John Key is about the most sincere man you will ever meet (along with most damn politicians). As the fabulous Oscar Wilde said, “A little sincerity is a dangerous thing, and a great deal of it is absolutely fatal”.

          • Carol

            Key rarely sounds sincere to me. He mostly sounds like a salesman trying to sell people a bridge to Antarctica.

            • Jackal

              I noticed his pitch rose quite considerably today while delivering his usual rhetoric showing that he was stressed. The snake oil salesman also stubbled a number of times making me think he’s starting to not believe his own bullshit… or maybe he just forgot to apply the Teflon deodorant this morning and the stench of his own corruption stung his delicate little senses.

        • insider

          Given much of the budget is pre announced it would be easy to pre write the speech, plus the opposition get the final budget early so more time to put in detailed commentary. I doubt shearer is doing this donkey work (not a slight on him, just realities of delegation). He’ll be part of the process but it will be a team effort.

  5. seeker 5

    Why is English looking so jovial in this photo, as well as grinning like the cat that’s got the cream, when appearing on the news over the last couple of nights.
    Has he no shame about delivering yet another failure of a budget, one that is a direct outcome of his government’s shoddy, self serving ‘economic policy’.
    His motto could read ‘ do not give to others what you can give to yourself instead, especially those who need it’.

    • mike e 5.1

      Bungling bills English the double dipping dipstick from Dipton.
      Zero ideas borrow and hope again another $20 billion by 2014 .
      Their is absolutely no way in hell he will balance the budget by then just the interest bill will put an end to that big lie.

    • Dr Terry 5.2

      English and “shame”? Can one imagine?
      Consider Kipling,
      “Valour and Innocence
      Have latterly gone hence
      To certain death by certain shame attended.”

      • Kotahi Tane Huna 5.2.1

        English’s shame one just cannot imagine,
        Consider Kipling, prepare to be sad John,
        ‘cos the fact of the matter
        Is the economy’s flatter,
        Than the failure of Banksie’s best patter.

  6. Deano 6

    See the Herald is leading with “‘zero hope’ budget”?

    That was in both Shearer and Norman’s speeches.

    So, I think the opposition is getting their line through.

  7. Dr Terry 7

    “All hope abandon, ye who enter here” (Dante)

  8. Poission 8

    What seems to have slipped under the radar is the merchandise balance of trade statistics for april,

    The April figure is 3,887 (million nz) This compares to 4,686 in 2011 a drop of 17%.

  9. captain hook 9

    has loki been kicked out of valhalla yet?
    where is thor when you need him?

  10. Steve 10

    Nobody got a prize? So sad, there were quite a few expecting something in their dreams.
    Budget is not a lottery, it is stating the facts and how to deal with them. The left are not happy, but all thet would do is tax and spend.
    Try in 2017

    • Carol 10.1

      *yawn*…. the right need to come up with better spin lines. Next you’ll be saying that the trouble with socialism is that you run out of other people’s money to spend.

      One day rightie followers and misguided believers are going to wake up from their bubble of diversion and misdirections and find themselves in the deserts of the real. It’ll be a big shock for many.

      • mike e 10.1.1

        carol who,s money is borrowing bill the bean brained bean counter spending.
        Michael Cullen saved nearly $30 billion between kiwisaver and the Cullen fund and the ACC fund. He left office with Zero Deficit.
        Your yawn is only matched by your lack of Knowledge.
        Double dipper we are subsidizing his dairy farm expansion and property investment with your money .
        Our deficit will have reached $77 billion under your right wing idiots by 2014 and the way they under estimate I would bet it will be closer to $ 100 billion.
        With idiots like you supporting bean brained bean counters you can see why the country is going down the tubes.

        • Carol

          Huh! mike e…. why are you leveling this criticism at me? Where did I support the NAct government or right wing propaganda. I pretty much agree with you summation of the situation. I think your criticism is more appropriate to Steve’s comment above, not my rejection of Steve’s right wing spin lines.

          Look again.

    • Dv 10.2

      Didn’t the Budget put a tax on kids wages?

    • fatty 10.3

      “The left are not happy, but all thet would do is tax and spend.”

      Labour’s idea of taxing and spending is slightly more logical idea than National’s idea of spending and spending.
      Have you read a newspaper lately?…within the past 4 years?

      • Dv 10.3.1

        Spend and spend and borrow!

        • mike e

          Its amazing the number of right wing supporters that have changed their tune on this site the t***ls are few and far between these days.

          • fatty

            “Its amazing the number of right wing supporters”

            Beyond pete george, is there any regular nat supporters on this blog?

    • Murray Olsen 10.4

      @ Steve. All NAct does is cut taxes for the very rich, borrow overseas and spend, then sell what we’ve taken years to build up. Their mates don’t have to expect anything in their dreams, it’s like a KFC drive through for them. Now try another slogan. If you don’t have the mental capacity to remember more than one at a time, try Google for Tea Party wit and wisdom, but try to not cut and paste stuff about the Fed or the Constitution by mistake, hard as it would be for you.

  11. UpandComer 11

    I thought the most telling part of everything was the litany of things that labour opposes that would promote jobs, and the fact they think it is just completely easy to ‘create’ jobs. What on earth do they think jobs come from? Just borrow and expand the public sector again with no corresponding increase in services? They say no to any kind of foreign investment, no to any kind of mineral expansion, which is the sole engine of australia and brazil and other top performing economies at this time, no to any kind of policy that would make it more enticing for employers to employ people… I mean what on earth?

    Of course the government has had to borrow. It has had to borrow to maintain unsustainable middle class welfare like interest free student loans, Working for families, and to rebuild Christchurch. It is hilarious the list of things that Labour pretends don’t exist. Labour don’t want to mitigate borrowing at all, in any way. No asset sales = 7 billion dollars of more borrowing, for what exactly? they don’t want broadband, and they don’t even want to build roads, they don’t want to build a convention centre, or new farms, what the hell do they want to actually do? And what rot from David Shearer about a ‘delivered surplus’ from the previous government.

    How about a delivered decade of deficits, a tin can railway the govt has to invest 4.5 billion in over the 4 years just to get it to work, a billion dollar hole in ACC, a deposit guarantee scheme that cost us billions and billions of dollars, a bloated public service that had not delivered any measurable increase in service since the massive increases had been made, a shambles of a public housing scheme, an utterly stifled and entitled public service, social redistribution schemes poorly written so that they inflate the incomes of the ‘wealthy’ that labour despises, a massive untouched and un examined welfare dependent swathe of society, blatantly stupid tax policies, and spending that had just had no end in sight. You don’t fix that all of that in a few short years. For goodness sakes, the deposit guarantee scheme has cost twice as much and more as the costs of the ‘tax cuts’ that mean two thirds of kiwis only pay 17 cents in the dollar.

    Shearer mumbles and waves around his graph, but so what, as if context does not exist, and people are stupid and have no idea about anything that has been going on in the world. What utter rubbish about National being a borrowing government, all Labour can and does do is borrow money and engage it in unsustainable spending. Thank god national has been in power for the last few years, because things would be utterly frightening if they had not been. You would have had all the same external events, but with a party that has no idea how to not-spend and not borrow or grow an economy, that would have chased off all foreign investment and put future generations under the hammer for 30 years or more.

    • ropata 11.1

      Got any links to back up your rhetorical outrage? Or is it just spin and abuse? Also, what is your problem with government taking a role in helping “middle class” (actually “working class”) families? I guess you’d rather watch National bleed the middle class dry so that their corporate buddies can buy flasher yachts?

      Cutting housing and education and attacking ACC is not something to be proud of. And the FACT is that National have presided over record deficits and unemployment and emigration to Aus. Shame on them and shame on you for being suckered by Teflon John.

    • Colonial Viper 11.2

      Both National and Labour are servants of free market neoliberalism.

      Labour’s actions over the last 30 years has made the country a lot poorer; National’s actions make both the country and the people poorer, faster.

      But now you’re making excuses for Key and English’s lack of vision and lack of faith in NZ. Buying them time to sell off the rest of our family silver.

      Shame on you.

      One word – I want a big public service. I want an entire sector of the economy which is not dedicated to serving money making capitalists, but dedicated to serving NZ society and communities instead.

      Since you don’t share that vision, I’ll be intent on making your kind fuck off.

    • Draco T Bastard 11.3

      which is the sole engine of australia and brazil and other top performing economies at this time,

      The top performing economy at this time is China and they make stuff – not dig it up. In fact, they have to import raw materials to make stuff and they import from us. So what NACT want to do is have us dig up stuff, export it to China and then re-import it as useful stuff costing far more than what we got exporting it. This is, of course, really fucken stupid – we could have made the useful stuff here from our resources and it would have been cheaper (we know we could afford to do so because we already own the resources).

      Of course the government has had to borrow.

      Nope, governments never have to borrow. They do so that the banksters can have a government guaranteed income. And this government could easily have avoided deficits by putting taxes up on the rich rather than giving them a tax cut then they could have used that extra income to invest in NZ.

      How about a delivered decade of deficits

      At the rate this governments going it’s going to be hell of a lot more than a decade…oh, wait, you were putting forward the lie that the last government left a decade of deficits.

      Fuck, you’re an idiot.

      • Colonial Viper 11.3.1

        In fact, they have to import raw materials to make stuff and they import from us.

        Not quite. China covers almost 10 million square kilometres of the Earth’s surface. They have plenty of everything that they need.

        The key is: they prefer to buy, use and run down the resources of the rest of the world first. Once they are tapped out, they can access the resources within their own borders, at their own leisure and security.

        • Draco T Bastard

          I was actually expecting to pulled up on the fact that China does export the raw materials 🙂 Although they are starting to clamp down on that now.

          The fact is that each country has enough resources to keep themselves quite well so long as they’re not over populated and aren’t producing excessive amounts of waste (which means recycling everything).

    • fatty 11.4

      Look what UpandComer wrote:

      “What utter rubbish about National being a borrowing government”

  12. hoom 12

    National: Taxing your kids’ paper round so we can build motorways.

  13. Bill English is feeding National’s monsters with the poor and vulnerable yet again.

    • Draco T Bastard 13.1

      This is a miserly, mean little budget that continues to reward the rich and supports their growing affluence by sucking what little is left out of the poor and vulnerable.


      Pure NACT, reward the rich for being rich by taking from the poor.

  14. Dv 14

    How many children will need to be taxed to pay keys tax break?

  15. geoff 15

    I hope Brian Fallow was wearing that bow-tie ironically.

  16. Carol 16


    The NZH online is foregrounding an “average” Auckland family, who see the budget as ‘sensible’.


    They live in an area where the median income is close to the median income for individuals in Auckland is around $26,000 per annum.

    The father/husband of this average family is an urban designer and the mother/wife has a doctorate in cancer research.

    ‘Average’? Say what?

    • tc 16.1

      How predictable that granny had a piece ready to go on an ‘average’ family spinning about what a sensible budget.

  17. fender 17

    As expected Bill English has served up a budget that reflects his personality, ZERO.

    He has even been wearing a guilty grin illustrating he knows he has done wrong.

    I’m in the mood for a revolution.

  18. UpandComer 18

    Draco, if you know the answer to overcoming China’s comparative advantage in manufacturing in anything aside from America weapons and SUVs, Japanese and German cars, and Luxury goods, then please, approach the hundreds of think tanks worldwide across every single country dealing with that question and explain your ingenious answer.

    Presumably you would have NZ be an autarky, buying and selling within our own country from our own resources? i.e. make our own clothes? You understand that China can make anything pretty much, aside from farm goods, wet weather gear, and a few niche items, much cheaper then here, and this is why countries cannot compete with in manufacturing? That is just a total ignorance of comparative advantage, and will lead to predictable outcomes.

    And hey, even planet Labour’s largest estimate of the so called ‘cost’ of the tax cuts has been 1 billion dollars. Those tax cuts, by the way, mean 2 thirds of NZers only pay 17 cents in the dollar. That seems pretty weighted to the plurality to me, and most people with any education would agree with me. But hey, the stupid tax policies Labour had in place were based around about 7 individuals who happened to run Westpac or Telecom etc, and hey if that’s how you want to devise policy, then sure… why not have a decoupled company and personal tax rate,

    Mate, just buying kiwirail has cost three times as much so far and will cost 5 times as much over next 5 years. So why don’t you talk about that?

    So you think the government didn’t actually need to borrow at all, and just made a choice to do so? You are a caring individual, so presumably even without just supplementing Labour’s tax cuts, the government could continue to have run the status quo, without borrowing. They could have helped the thousands of people wiped out by South Canterbury finance and the earthquakes, without borrowing. They could have paid out hundreds of dollars of weeks, to thousands of families in working for families without borrowing? Continued to pay lots of students thousands of obligation free monies each year to complete their incredibly useful BA’s? supply your own examples as I am sure you know many others of government largesse.

    A decade of deficits was the horrifyingly revealed figure within the documents that must be released by law under the Public Finance Act by the outgoing government. I can certainly provide a link to them if you like. I’m grateful at least that Labour revealed this, given they knowingly kept a 1 billion dollar hole in ACC secret. It is a fact. If National had continued on Labour’s spending, we would never, ever be in surplus ever, period. The line of deficit was going up and up and up without ever peaking, had National held the line on spending, and ACC would have fizzled out of existence.

    As it is, they have frozen spending everywhere, reduced the bloated public service,and services have got better, or stayed the same, which puts the lie to everything people on planet Labour say.

    As I said, anything that National has put forward to create jobs, even the Hobbit movie! has been opposed by Labour. Everything. And they have not one substantive policy of their own! Aside from, raise taxes, and increase the public service!

    The strength of the NZ dollar right now relative to all world currencies, low inflation, and the increase of low price goods from China thru the free trade deal NZ first and the Greens and most members of Labour opposed , means the dollar of low income people has never bought more then it has now. Ever. That is a damn fact. I see stories of single mums with the temerity to have 4 kids complaining about a living wage, and then Labour people bleating about the need for a living wage, and I just shake my head, like most normal people in NZ at the obvious question that is begged by the situation.

    I mean it us just utterly nuts. You have to junxtapose aspirations with reality, and when you don’t, you get all these batty views from a bunch of political science majors.

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    BeehiveBy beehive.govt.nz
    5 days ago
  • Agreement advanced to purchase up to 5 million COVID-19 vaccines
    The Government has confirmed an in-principle agreement to purchase up to 5 million COVID-19 vaccines – enough for 5 million people – from Janssen Pharmaceutica, subject to the vaccine successfully completing clinical trials and passing regulatory approvals in New Zealand, says Research, Science and Innovation Minister Megan Woods. “This agreement ...
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    5 days ago
  • Jobs for Nature funding will leave a conservation legacy for Waikanae awa
    Ninety-two jobs will be created to help environmental restoration in the Waikanae River catchment through $8.5 million of Jobs for Nature funding, Conservation Minister Kiritapu Allan announced today. “The new funding will give a four-year boost to the restoration of the Waikanae awa, and is specifically focussed on restoration through ...
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    5 days ago
  • New Dunedin Hospital project progresses to next stage
    As the new Dunedin Hospital project progresses, the Government is changing the oversight group to provide more technical input, ensure continued local representation, and to make sure lessons learnt from Dunedin benefit other health infrastructure projects around the country. Concept design approval and the release of a tender for early ...
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    5 days ago
  • Jump in apprentice and trainee numbers
    The number of New Zealanders taking up apprenticeships has increased nearly 50 percent, and the number of female apprentices has more than doubled. This comes as a Government campaign to raise the profile of vocational education and training (VET) begins. Prime Minister Jacinda Ardern and Education Minister Chris Hipkins announced ...
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    6 days ago
  • ReBuilding Nations Symposium 2020 (Infrastructure NZ Conference opening session)
    Tena koutou katoa and thank you for the opportunity to be with you today. Can I acknowledge Ngarimu Blair, Ngati Whatua, and Mayor Phil Goff for the welcome. Before I start with my substantive comments, I do want to acknowledge the hard work it has taken by everyone to ensure ...
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    6 days ago
  • New Zealand's biosecurity champions honoured
    Biosecurity Minister Damien O’Connor has paid tribute to the winners of the 2020 New Zealand Biosecurity Awards. “These are the people and organisations who go above and beyond to protect Aotearoa from pests and disease to ensure our unique way of life is sustained for future generations,” Damien O’Connor says. ...
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    1 week ago
  • Tourism Industry Aotearoa Conference
    speech to Tourism Industry Aotearoa annual summit Te Papa,  Wellington Introduction Nau mai, haere mai Tēnā koutou, tēnā koutou, Ka nui te mihi, ki a koutou. Thank you Tourism Industry Aotearoa for hosting today’s Summit. In particular, my acknowledgements to TIA Chair Gráinne Troute and Chief Executive Chris Roberts. You ...
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    1 week ago
  • Supermarkets announced as Government’s second market study
    The Government has today launched a market study to ensure New Zealanders are paying a fair price for groceries.   “Supermarkets are an integral part of our communities and economy, so it’s important to ensure that Kiwis are getting a fair deal at the checkout,” Minister of Commerce and Consumer ...
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    1 week ago
  • Masks to be worn on Auckland public transport and all domestic flights
    Masks will need to be worn on all public transport in Auckland and in and out of Auckland and on domestic flights throughout the country from this Thursday, Minister for COVID-19 Response Chris Hipkins said today. “I will be issuing an Order under the COVID-19 Response Act requiring the wearing ...
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    1 week ago
  • New Zealand signs Regional Comprehensive Economic Partnership
    Increase to New Zealand’s GDP by around $2 billion each year Increase opportunities for NZ exporters to access regional markets Cuts red tape and offers one set of trade rules across the Asia Pacific region New government procurement, competition policy and electronic commerce offers NZ exporters increased business opportunities Prime ...
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    1 week ago
  • Minister acknowledges students as exams begin
    Education Minister Chris Hipkins has recognised the extraordinary challenges students have faced this year, ahead of NCEA and New Zealand Scholarship exams which begin on Monday. “I want to congratulate students for their hard work during a year of unprecedented disruption, and I wish students all the best as ...
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    1 week ago
  • Prime Minister meets with key ASEAN and East Asia Summit partners
    Prime Minister Jacinda Ardern today attended the ASEAN-New Zealand Commemorative Summit and discussed with Leaders a range of shared challenges facing the Indo-Pacific region, including: The ongoing management of the COVID-19 pandemic; The importance of working collectively to accelerate economic recovery; and Exploring further opportunities for partners to work more ...
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    1 week ago
  • Veterans Affairs Summit held in Korea
    A Ministerial Summit on Veterans’ Affairs was held in the Republic of Korea this week. Ministers with veteran responsibilities were invited from all 22 countries that had been part of the United Nations Forces during the Korean War (1950 – 1953). The Summit marked the 70th anniversary of the outbreak ...
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    2 weeks ago
  • Clear direction set for the education system, skills prioritised
    The Government has released a set of priorities for early learning through to tertiary education and lifelong learning to build a stronger, fairer education system that delivers for all New Zealanders. “The election delivered a clear mandate from New Zealanders to accelerate our plan to reduce inequalities and make more ...
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    2 weeks ago
  • A Progressive Agenda
    Speech to the Climate Change + Business Conference, November 12, 2020 Tena koutou katoa Thank you for inviting me to speak here today. It is great to see us all come together for a common cause: to redefine our future in the face of unprecedented times.  Covid-19 and climate change are ...
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    2 weeks ago
  • Wellington Pasifika Business Awards
    Thank you for having me join with you as we celebrate the success of Pacific businesses tonight, and recognise the resilient and innovative entrepreneurs who lead them. Equally important to me is, that we are also able tonight to offer up our gratitude to those leaders who have organised and ...
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    2 weeks ago
  • Commemorative address at Act of Remembrance for Armistice Day
    Tuatahi māku  Ka mihi tu ki a koe Pita E pīkauria ana i te mana o Ngā tūpuna o te whenua nei. Thank you Bernadette for your warm introduction. I would also like to reflect on your acknowledgments and welcome Peter Jackson, Taranaki Whānui; Members of the National War Memorial ...
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    2 weeks ago