What to watch for

Written By: - Date published: 2:44 pm, May 19th, 2010 - 4 comments
Categories: budget 2010, education, health, public services - Tags:

We already know that National’s big economic plan this budget is a tax swap from working Kiwis to the rich that will not affect growth but will increase inequality. There’s some money for science and Kiwirail, which is good but only partially reverses the cuts that National imposed last year. The two big items in the budget that the Nats have control over (assuming no cuts to benefits or super) are education and health. The increases in these two sectors are the things to watch.

We know that both sectors are already under stress. People are being turned away from university when they try to upskill themselves, the teachers are facing a protracted negiotation and strike to get small pay rises, and early childhood education is for the chop. In health, preventative healthcare services are being cut left, right, and centre to free up funds for more elective surgeries. As writers here warned in the past, Tony Ryall’s cutting effective and cost-effective services to deliver more ‘countable’ services – a triumph of statistics and PR over good health practice.

The budgets for education and health are so massive that even staying still, providing the same level of service next year as this, requires a large amount of money to counteract inflation, population growth, and, for health, the aging population.

The CTU’s economist, Bill Rosenberg, has calculated that to tread water health needs $555 million more. I can’t attempt an analysis as sophisticated as his for education but roughly: last year’s budget was $11.3 billion. Add 2% to undo last year’s inflation, and 1.8% for expected roll increase. That’s 3.8%. I can’t find out easily how much of the education sector’s expenses incur GST but let’s take a low estimate of a quarter. That’s a further 0.5%. Meaning that education needs another 4.3% or $485 million to just supply the same services it did last year.

Will education and health get the money they need to maintain their services (or, ideally, improve them) or will we see cuts to these core public services?

4 comments on “What to watch for”

  1. J. Andals 1

    (assuming no cuts to benefits or super)

    Big assumption.

  2. This Government is more subtle than previous National Governments.

    The Ruth Richardson “Mother of all Budgets” in 1991 was a no holds barred new right kick the beneficiaries in the goolies budget that attracted huge opposition. They nearly lost the next election because of it.

    The Nats learned from that and understand now that you have to kick the weakest in society in such a way that they may not notice or there is a plausible reason for doing so.

    A tax increase for the poor is now an exercise in “aspiration”.

    Will Education and Health get the necessary increases? No chance.

    For the last budget Treasury recommended a $17.5m increase for funding of private schools. This Government’s response? To double the increase to $35m at the cost of after school classes.

    • Bored 2.1

      “A tax increase for the poor is now an exercise in “aspiration’…..how right you are. Poor people now have to “aspire” to being rich so as to be able to pay less tax…….whoever came up with the term aspiration sure has got an evil sense of humour.

  3. Akldnut 3

    Saw TV3 tonite saying look out for early childcare budget cuts. 🙁
    With last years Adult education cuts and now early childcare budget cuts – they’re dumbing us up faster and earlier. But not enough to vote National.

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