Thu, 28 May 2009 10:01a.m.
Bill English is the gristle to John Key’s fillet steak in this budget. He has had a tough road in politics; leading a grossly unpopular National party to their worst ever defeat in the 2002 election and taking the role of Finance Minister during the worst global recession since the Great Depression.
Not for Mr English the opportunity to read children’s books to schoolkids – his job is to remain staunch; a taciturn symbol to Standard and Poors that we are worth our credit rating – honest.
But there is a sense that New Zealand’s economy may ride out this economic rodeo without incurring the financial disasters occurring in larger economies such as the UK's. This morning a National Bank survey showed a net 2 per cent of respondents were optimistic about the state of the economy – last month a net 15 per cent were despondent.
It’s funny how quickly things can change when it comes to economic confidence – perhaps our entrepreneurs rather vacuous attempt at reviving the economy with the slogan “Give it a go, bro!” has had an earlier-than-expected effect. ‘Bros’ around the country may be applying themselves to their business with a newfound strut now they know they are backed up by such a meaningful slogan.
So, relatively speaking, Mr English couldn’t have hoped for more on the day he released National’s first budget; the most important budget many people can remember. As he tossed and turned in his bed last night I expect Mr English was having nightmares of mass redundancies and yet more cycle paths appearing in the morning papers.
Or perhaps Mr Key might have said that this budget was all about childrens’ books or haircuts or coffee, anything that would make Mr English have to make an about turn early this morning.
And this budget – dubbed the Road To Recovery – has little, on the surface, to offend.
Mr English is very keen to point out that he has tried to strike a balance between boosting demand through government borrowing and spending, and making savings to reduce National debt in the long-term.
But what effect might stopping Super Fund contributions for a possible 10 years have on future generations – will the retirement age rise? As Mr English says, there is no “free lunch” here and we will have to pay for this later on with greater payments needed to keep the fund afloat.
The language of politics is still the same – we don’t have cuts, we reprioritise into higher priority areas.
And I am not sure how our country's prisoners will be feeling with the news that many of them will have to double-bunk next year.
There are also cuts, or reprioritisations if you prefer, to the education system – including provisions to reduce the adult to child ratio in early childhood education, reductions to adult community education and a hold on university lecturers' wages.
Could these also be a little short-sighted in the long run?
Overall though, Mr English’s budget was not the draconian response to recession many were fearing and allows for economic growth. The National government says it backs its plans to stimulate the economy and thereby pay back our increased borrowing and fund our lack of Super Fund contributions.
Let’s hope they are right, and perhaps more importantly that credit ratings agency Standard and Poors think so too.
On a more amusing note, or perhaps excruciating, Mr English dropped a bit of a clanger at the end of his budget Q and A session today.
In reference to the ACT party ex-candidate who is reportedly being paid $2000 a day to advise on ways the Government can save money, Mr English quipped:
“I don’t understand people’s concern that this man is being paid $40,000 for six months work – I hope everyone here is on those rates.”
Perhaps not the best timing Mr English.