Here's my take on the Budget... before it comes out.

With a few hours to go before the Budget, it already looks like it's Labour lite all over again; a political repeat of 2014 with National unashamedly doing exactly what opposition parties have been saying they should do and taking credit for it.

Well, not exactly, but close enough so as to blunt the swords of their political foes. It's as if Key and English went through Andrew Little's pre-Budget speech like a pair of pickpockets and said 'we'll have that'... 'and that'... 'and that'.

Little highlighted four missed opportunities -- diversifying the economy with R&D investment, levelling the investment playing field (especially in Auckland housing), revitalising the regions and cracking down on overseas speculators.

National has boosted R&D spending by $80 million, started a foreign buyers register,  and extended the tax on capital gains (that's a TCG not a CGT). Oh, and it's helped itself to the bulk of Labour's KiwiBuild too, with its plans to build new houses on hundreds of hecatres of government land in Auckland.  

The regions are about the only thing un-nicked.

It's shameless but difuses bombs. Labour and the other critics are left to say that National simply hasn't gone far enough, or done too little too late or simply stole its ideas. In doing so they look lame and impotent.

But politically there is a price to pay for National; political capital has been spent. With its base and on the right there must be disquiet that National is Labour lite again. They look like sell-outs.

The new political reality is that what National has done all-but guarantees a proper capital gains tax will be introduced to New Zealand. National has now created the framework around inheritances and the like that it was so critical of in the election campaign. So Labour and the Greens can push ahead on the path its laid.

Also, a full foreign buyers register is now unavoidable. If you can collect this initial data, then someone will go the whole hog at some stage.

But now, let's wait to see what Bill English has to say in person.

 

Comments (7)

by Robert Eddes on May 21, 2015
Robert Eddes

Welfare cuts.

by Wayne Mapp on May 21, 2015
Wayne Mapp

Well Robert, you were certainly caught out there. National not being as evil as you would like

The Budget reaffirms John Key's political skill in the way he has dealt with the concerns of middle New Zealand, who are anxious about child poverty. He has demonstrated to his supporters that he can be trusted to honour his election commitments. He said he would focus on child poverty, and he has.

He has blunted the criticism of Left at very little cost, given that the removal of the $1000 Kiwisaver incentive covers two thirds of the cost of the welfare increases.

by Alan Johnstone on May 21, 2015
Alan Johnstone

Key boasting that Andrew Little had nothing to say because he agreed with the budget says more about the Budget than Andrew Little

by barry on May 21, 2015
barry

But they couldn't stop themselves from further punishing solo parents and their children.

Credit for what looks like a meaningful increase for some families (although it should be $25.00 per child).

How much will you bet that they achieve their surplus next year?

by Charlie on May 22, 2015
Charlie

The National Party knows that right of centre voters have nowhere to go so it's great from realpolitik perspective. 

 

 

by onsos on May 22, 2015
onsos

It's an incredibly boring budget, but with odd and unpredictable outcomes.

National is struggling to deliver what it wants because the Crown is not generating a surplus. This is not a good look for National. 

It has, at least in terms of perception, moved towards the centre. But in the process, it has validated the opposition. Key had a solid strategy of denying problems; now that is not sustainable.

by Brendon Mills on May 23, 2015
Brendon Mills

*only John Key could put the benefits up*

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