After the beehive-spin induced euphoia wears off and the hangover sets in, middle New Zealand will reach for the Berocca and try to work out what the Budget really means for them.
Not to add to the inevitable headache, but here are a few of the facts of life for the morning after.
- For at least 3/4, and maybe 90% of the country, by the time they eat a whopping 5.9% inflation next year (Treasury Budget forecasts, not NZLP numbers!) they will be worse off until at lesst 2012/13. For a family with 2 kids on $72k for example, $55 a week worse off.
- That inflation will feed into mortgage costs and rent rises. It will result, quite rightly, in pent up wage demands from workers who have gone without wage rises for the last two years.
- While its ok that the middle income brackets got some income tax relief, and would have likely got more relief from us, the tax cuts are way too skewed to the top. You just can’t get around the fact that someone earning a $million a year gets $1000 a week back. That is going to make the haves/have nots gap wider. And that gap will inevitably worsen over time, undermining the Kiwi dream and taking us further from the “fair go for all” kind of place we want to be.
- That is made worse by the underlying agenda of shrinking the state and the services it can provide. We have already seen home help for the elderly branded “low quality” spend and cut. Health’s new money in the Budget is, we reckon, about $270 m short of standing still given next year’s inflation forecast. That means more cuts to the services and more pain for the vulnerable.
- My personal gripe is early childhood education. What has the Govt got against quality preschool education? Why is it swiping $100m pa from that? Labour will lead in this area and every family with young kids will hear us.
- Rebalancing the econmy is way undercooked. Take away the smoke and mirrors of the tax switch, and we are still left with residual taxt incentives for property and LAQC avoidance mechanisms. Proof: LAQCs sheltered $2.3 billion of taxes in 2008. The tinkering in the Budget trimmed only $70m p.a. of that.
- There is STILL no credible plan for growth in this Budget. The National Govt seems intent in relying on “passive” instruments. I have no problem with dropping the company rate – provided the fiscal balance can support decent public services (personal view – see “About” on the blog site) – but that cannot be enough to get the export sector going on its own. What about the R and D tax credits?
The strucutral problem remains: we don’t export enough, we don’t save enough, and we don’t innovate enough. As an economy we are short on capital, technology, skills and IP. Budget 2010 does not fix that. Time is short and the job is urgent. When NZ wants positive action, Labour will be ready to lead.
As the bubbly wears off in the Beehive and the Berocca gets passed around the country; the poor, the forgotten middle class and the structural problems of the economy have not been moved forward by this Budget.
It remains a suger-coated tax swindle.
It remains a step back, not a step up, and certainly not a step change.
People with needed surgery get it. The ones on waiting lists are the ones who are waiting for elective surgery, ie, surgery that’s not needed. So, the question is, what did those people on the waiting lists for elective surgery die of? Because it sure as hell wasn’t the lack of surgery.
That evidence doesn’t denote a doubling in child abuse. Us staying stationary while others got better could show the same result.
Not really surprising. Higher wages and the higher chance of doing what they actually want to do while here in NZ the wages are going down (just as Jonkey said he wanted) and the only thing to do is be a farmer.
“Elizabeth Warren — The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net”. It’s based upon the US but as we followed the same neo-liberal delusion it applies just as well here.
Actually, the only study that supported that was the one put out by the company that makes the drug. All the other research indicated that the 9 week course was more than enough. It also indicated that the 12 month course significantly increased the risks of heart failure.
Andrew 11:37am.
b——t.
George
“But isn’t that going to be true for anyone who works with children, whether they possess the certificate or not?”
I guess it depends on the criteria included for getting the certificate or for entry to the job.
I am wary of concluding that teachers and student teachers who do not conform to my generations view of what a teacher “looks” like. Children at school today bear almost no resemblance to when I was their age.
Technology is responsivble in large part, stimulation via tv, movies, online and so ofrth… some say they have no concentration spans but it’s different and shorter than ours, not necessarily better or worse.
I know that with my students I have to have at least 3 different swtches during a lecture to keep their attention. It’s harder tot teach, but that’s my problem not theirs.
Jane I am in fact a little young to have experienced the downfalls of both the 4th Labour government and the Bolger then Shipley led government that followed.
That said, I have read & worked enough to have gained a general idea.
Yes Labour did inherit a lot of issues and that is why I was happy with them to do things like introduce a top tax rate of 39c – we badly needed revenue and it had to come from somewhere.
However, the problem I have with Labour as that they never changed their approach or validated the massively changing economic and social climates. This is where they and they alone, failed badly.
Problems like family violence, child abuse got worse as did the health system – many of my closest friends have been health professionals (doctors & nurses) for the last 12-15 years. They have personally seen the health system deteriorate.
Further, Labour were solely responsible for creating the climate that enabled all the baby boomers to buy up our first homes then rent them back to us at a premium.
The house we bought was $180 in 1998. We bought it for $275k in 2006 and are paying a mortgage of $2000 p/m despite putting down a deposit and buying a good house in a slightly cheaper area that was below the average house price ($340).
In terms of the list I gave above. One’s perception is ones reality. This is my perception and that is the perception of most people we know – all in our 30s, all educated, all skilled, all with student loans, all paying a fortune in rent or mortgage & all wondering whether it is actually affordable for the modern graduate to ever have a family.
This is what we consider to be Labour’s legacy.
In terms of moving forward – I would be able to do this and let bygones be bygones if Labour did not continuously attack NACT in a way that to me screams hypocrisy.
However, I am completely open to hearing what they have to say in the coming months.
Draco – many breast cancer patients, including my friend (also in her 30s) who recently passed away leaving behind young children & a husband, went to a lot of effort to protest against this.
People need to lay off Rebecca for having a different view on somke things. Surely it IS important to know that people hold her views. I have read her posts for some time and get the impression she really really wants to vote for Labour but until she trusts them, has faith in a change of direction from them, she is caught voting for some ideologies she doesn’t agree with. Just my opinion/observation.
Keep posting rebecca, your voice needs to be heard (even when I dont agree with you
)
Rebecca – I’m sorry for your friend, but surely the allocation of money to these things must be based on something? If that drug is bought and paid for and given to folks like your friend, regardless of criteria, where do we take it from? Which ailment do we not fund?
Tracey – thank you, that it is really kind of you. And yes well spotted too – I just want Labour and their hard left supporters to recognise that for many of us, life was actually quite difficult – contributed in part by their polices (I believe) and got a lot worse by the time they were voted out in 2008.
Because people seem to so blindingly agree and defend everything they say and do I can help but be a bit of a devils advocate and argue against them. Believe it or not, I am a little more liberal than perhaps my views come across on here!
Re Herceptin – to be honest I haven’t read enough of it to know for myself. My friend who passed away read everything – she was an extremely well educated woman (had a doctorate as well) and genuinely felt that for most patients it was the wonder drug, that it needed to be taken for 12 months to be effective in the long term.
Considering that stomach stapling is now on the cards I don’t think it is too much to ask!
But yes, with anything like that we need to have all the facts on the table and then decide whether it is the best course of action – especially for those who can not afford the health & life insurance to compensate for the impact of things like cancer.
@Draco T Bastard agreed
@Anne – do you want me to beat Andrew up?
“some say they have no concentration spans but it’s different and shorter than ours, not necessarily better or worse.” – I don’t know, even blogging shortens attention spans.
There must be a point where it could be detrimental to some activities.
@Rebecca – you are younger than I assumed you were.
I respect Rebecca’s right to post and have a voice.
Democracy and freedom of speech 
Not convinced that she does actually want to vote for Labour, but that doesn’t bother me.
Errm how old did you think I was Spud? Since we haven’t met I can assume (I think) that it is a compliment since you thought I was more mature than what I am!
Isn’t it interesting how words on a screen can create so many assumptions and in fact, even conjure up an image of what the other people look like, how the live etc.
In terms of voting – since you are so curious I have voted for Labour three times & voted against them twice hence why I have said that as I grew up and took on responsibilities I soon realised that idealism was not always synonymous with what was right for me & my family.
Herceptin costs the country a lot of money by causing a lot of heart muscle damage. so you get sick with cancer, sick with chemo, sick with radiation, then you get sick with the side effects of herceptin. Its a race to see what gets you first.
:Looks around: hardly anyone here who is “hard left”.
Just a bunch of good caring types
GWW, I think you miss my point: we are judging how better off (or not) people are after National’s budget, compared to the current position. CPI is already 3% so that is not a change. The change is 5.9% less 3% which is 2.9% at best (although I believe the better measure is 2% given the fact that GST doesn’t apply to mortgage, student loan, child support and rent etc).
So tax cuts (increase in take home pay) are delivering on average much higher than the 2% of cost rises.
Fixed income earners are in a similar position as they have also been compensated.
Accordingly, Cunliffe and Goff are wrong when they use the 5.9% (absolute) figure, as are you, GWW. Is it just spin or is this a legitimate error from Labour?
Jane says: “This was quite a good blog once- it seems to have become overrun with right wingers now which is a pity.”
I thought that one of the (very laudable) aims of this blog was for Labour MPs to find out what people out there, outside of the small circle of the party faithful, think.
Unfortunately that’s going to mean that at times some of us say things that go against what party members/supporters like.
If you want a ‘rah rah’ club where everyone stands around virtually kicking tyres and agreeing with each other how NACT is so awful and how Labour policies are so wonderful and how the voters were only conned into voting NACT by smile and wave and how they’ll all come crawling back with their tails between their legs begging for forgiveness as soon as they see through what JK’s up to, then fine. But that won’t advance your cause one little bit.
Perhaps by reading what those who have deserted the party are now feeling say you might learn something. It might not change your mind, but at least you’ll perhaps understand your enemy a bit better rather than just thinking of him as some sort of horned demon…
Re 4th Lab and the 90’s under Nat. No defending either of them. BUT !!! people forget what was the situation at that time and what we who. Rob M did not leave the country in geat shape as his legacy. Something dramatic had to be done the stars all were in alignment, what could have been done differently given what was known at the time and we were in a situation theat Greece is currently in. The same in 90, the foundations were set in concrete that 4th Lab govt built. Yet we where still in huge operating deficit. The agendas by both and their reasoning has come into question but back then want was then unknown what else could have been done. NZ financially was on its knees. Unfortunately the legacy that these 2 regimes have left has been on reflection socially has been harmful, but at the time who knew we all went with the flow. The only agruements against were by the opposition at the time, abut that is just politics of the opposition. There was no alternative case projected just “they” are wrong.
I think the last time history portrayed a governement mildly well was Holyoake, but I am open to being corrected by more learnered people out there. I hope we do not have to go back as far as Savage before we get a thumbs up.
George yes and then they may find that the face of these ‘enemies’ are in fact the faces of “ordinary hardworking New Zealanders”……
George- I frequently criticize Labour myself- I am not part of the cheerleading squad here unless I think Labour are making progress on something I think they need to make progress on.
However- after a while the criticism from the right on this blog becomes pointless and it doesn’t feel like genuine and constructive criticism. Labour is a left wing party and is never going to please everybody- they simply cannot cover the whole political spectrum and they would be crazy to try.
I think the point has been made and taken on board- Labour let down supporters last time. They took for granted the top PAYE earners and took too much from them. They didn’t stop the rorts, and the property market bubbled in response and we will pay for years to come for that failure.
But the last Labour government weren’t the antichrist either and people here posing as supporters while trying to blame them for all of societies ills just sets off my bull**** detector.
In truth- people post with anonymity here and you haven’t a clue who the posters really are and what their motivation is. Tricky for Labour when they are trying to communicate with the public.
Jane with the requirement to supply email addresses I imagine the controllers of this site and others would have a pretty good idea who we are under our masks. I am also sure that our posts are able to be correrlated and the likes of Trev could find trends on our postings and what is from valid support and critism by what has gone before us, as to who is a troll and has marginal contribution to discussions.
Jane I think that is why those of us who are disgruntled ex-Labour supporters continue to be cross is that we are not convinced Labour has really got the point/taken it on board.
Labour did do many good things – including making much needed & well overdue changes to the Student Loan Scheme and although they were not as evil as some would lead us to believe, they did ignore terrible social ills that they promised they would address – child abuse being one, something that matters to me far more than tax cuts.
Interesting section here from a speech by Russel Norman MP:
“A capital gains tax is sharply progressive because income derived from capital gains is concentrated amongst the most wealthy. The US uses a capital gains tax and shows us that those earning more than one million dollars get about 40% of their income from capital gains. Meanwhile those earning under $75,000 get less than 2% of their incomes from capital gains. So capital gains taxes are highly progressive because the tax falls on those who can afford it most, whereas GST is regressive because the tax falls on those who can afford it least.”
You’ve put it in a nutshell Jane. Thank-you.
Anyone who can’t see that much of the criticism that is couched in “I only want to help Labour” language is not genuine, must have their eyes closed. There have been some valid points made from time to time, but there has also been a lot of hyprocisy and questionable motivations.
Six months ago spud was moderated for committing ‘offenses’ that were minor compared to a few current commenters here.
I have noted that a number of quality commenters have disappeared in the past month or so and there will be more joining them if the situation doesn’t improve.
How come we are now suddenly allowed to use inflation to work out real income received after tax cuts? If we look at labours record of fiscal drag people were losing more money every year and they never did anything about it?
“In terms of voting – since you are so curious I have voted for Labour three times & voted against them twice” – So you’re purple
I’m dreading the cuts to the health system, inflation, and mining
@Anne – Thanks
Spud – 40s???…..hmmmm…thanks…I think!
I love purple!
Oliver I think you raise a good point.
That’s me for now. Will check in in a few months to see the direction Labour wants to take us in.
@Rebecca.
I was only 11 when they were in but I remember how much that affected me and my family.
Idealism never is. In general, it’s costs far more than we can afford and the only reason why we’ve got away with as much as we have is because of the cheap supply of oil which is running out. As I’ve said, here and over at The Standard, you can’t have anything for less than it costs but I’m not talking money here, money is far too abstract to get the point across. I’m talking hard physical resources. The problem is that the “capitalist free-market” keeps telling us that we can. Is it really cheaper to buy something from China? Nope. Take a factory, put it anywhere in the world and it will use exactly the same amount of resources right down to the same number of people and the food they need to produce the same output.
@A Mother – poor you.
Mr Cunliffe, it seems a bit rich (no pun intended) for you to complain about a predicted increase in inflation when Labour has abandoned the consensus on monetary policy.
Until you can tell us the details of Labour’s monetary policy and the effect it will have on inflation, your criticism rings somewhat hollow.
Hi David, One genuine question. Is it standard practice for large sums of money (oh, let’s say $4.8 mil) to be handed straight over to a private company to cover Auckland’s economic development for Pacific,a company that noone seems to have heard of.Pacific Economic Development Agency Ltd with two directors, one share holder.Two of who are Inga Tuigamala and Michael Jones.Does one just get this offered or does one need to tender?
I forgot to mention it was in the Budget.
Oliver – fair comment about using inflation. Is it correct that inflation will be a one quarter wonder and so banks want raise interests rates, in your opinion?
HOwever, I would like to see the real figures of take home pay after tax cuts and increased costs (including GST, EFT, ACC levies Petrol etc?) this would be more “real” for me anyway.
As for anyone who blames Labour for ETS costs, these costs were largely on polluters under Labour’s scheme (from memory)…
It’s absurd under both labour and National that farming and agriculture get immunity, but foresty pays from the get go.
Sofie, Jones and Tuigamala are NOT directors of this company, a quick and free search of the companies office register online reveals this. I cannot find them listed as shareholders or directors of associated companies. Its scurrilous to pick up on gossip and regurgitate it, unless you can provide a verifiable source for the statement you made?
I’m not syaing the granting of the money ought not be examined, it ought to, but not because of baseless claims of cronyism by National to two individuals.
a: I never said they were Directors, they are associated with it.and
b: sorry, who are you again? I didn’t realise I needed your permission to comment.I’ll check with you next time.;)
I would like to know if it is standard practice to deliver funds to private companies in the Budget. that is all.
Public Address.net , (I trust) Radio New Zealand’s Pacific correspondent Richard Pamatatau was very blunt about the agency on Checkpoint last night, describing it as “hardly known by anybody in the Pacific Island population” and having “no real clear focus” and “no connections and no ability to engage with the population.”
Pacific Eyewitness has expressed similar concerns:
Post what you like sofie, my reading of your post is it’s defamatory… you still havent posted your source?
“a company that noone seems to have heard of.Pacific Economic Development Agency Ltd with two directors, one share holder.Two of who are Inga Tuigamala and Michael Jones.”
You might want to rephrase that paragraph because a normal english reading of it, in my opinion, states clearly that you say Jones and Tuigamala are either a director or a shareholder…
Yes I agree, on rereading, it does look like that ,my bad. Public address.net was where I read about it, which is the last bit I posted but I will accept that my wording could be better.I still would like to know if it’s standard to fund private companies in a Budget. I don’t know, and I’m not apologising for the query.call me what you like. I asked David the question, not you.Feel free to ignore me.I have no problem.
To cut income tax or not, that is the question?
To be blunt who cares. Every country can play around with income tax, it is not a device for leveraging strategic economic advantage. Taken to its logical conclusion income tax could be reduced to zero and every other country could follow suit, and what advantage would we have gained?
None.
We would then have to look at something else to give us a economic strategic advantage.
If we want to improve our standard of living, instead of copying other countries we need to develop our own economic devices and tools that work for us. Every successful developed economiy does it.
We are not going to make any economic progress as long as we are myopically obsessed about trying to copy what has worked for other countries.
We need to have something that is original, that works for us as a country and will give us a competitive advantage, and is extremely difficult for other countries to copy over the longer term.
to ddddd
+1 mate
David, I might agree with you on 4,6, and 7. But not on your point 5.
Why perpetuate the obsession with childcare coming via “professional” teachers? Has Labour really not learned any lessons? If you really cared about children or their parents you’d take on board the latest research about child development and the importance of attachment during the first three years of life. Nope it sounds like Labour is still on that old broken record of “unless its a (unionised) “professional” teacher it doesn’t count as ECE”. Playcentre suffered along with Kohanga Reo under this myopic policy over the last nine years. We’ll accept the 80% funding and appreciate the cut in income tax. Oh, and don’t use out of context figures to back up a wobbly case on inflation. The inflation you cite is for one year only as GST comes in. The Reserve bank doesn’t expect it to impact in the long run and it shouldn’t raise interest rates. You do yourself a disservice using such tactics.
jfk – didnt Labour bring in parental leave (NACT voted against)… alowing people some compensation for staying home with their children? That is ahrdly an anti early attachment policy.
So we know what National wont fundin ECE, can you clarify what they have granted extra funding for?