By Patrick Gower
So the Budget is pretty damn tight – and the path to that wafer-thin surplus in 2014/15 will be paved by taxing the life out of smokers and stalling plans for enrolling everyone in KiwiSaver.
There’s no money to spend – everyone knew that.
But the options taken for pulling in cash are so limited, one of the main measures trumpeted by the Government is to crack down on a small group of wealthy people with nannies who have been poaching a cheeky tax credit.
The tax on tobacco will force the price up to over $20 a pack – they were $14 a pack not that long ago.
That will raise $528 million over four years.
It's a no-brainer really. Smokers are increasingly becoming pariahs and the Government knows taxing them isn’t going to cause a public outcry.
Tax on cigarettes has already gone up a lot under this Government with no real fuss – the Government knows it is on safe ground.
But alcohol hasn’t been touched at all. This Government knows that’s a Kiwi sin that’s still popular – so taxing booze is a no-go.
Stalling the Government’s plan to auto-enrol everybody in KiwiSaver will save the Government $514 million.
That policy was announced on the hoof in the lead-up to the election to gazump Labour’s plans for compulsory superannuation.
It was always conditional on getting back to surplus – now Bill English says we won’t get back to surplus if we do it, so it has gone on the backburner.
This raises the obvious questions about what we will do about the looming superannuation costs – especially with the retirement age stuck at 65.
And just as the Government is being pretty damn tight on spending, it's not trying to collect much more either.
It will police people using boats and baches a bit harder – that will save just $109 million over four years.
A livestock loophole – that will save $184 million.
And then there’s the outdated tax credits – $117 million over four years.
This is where the nannies come in. Bill English says high-income earners with nannies have been claiming a $300 a year "housekeepers allowance” that dates back to 1928.
Sounds fair enough – not a whole lot of cash to be had though, but it all makes a difference.
And that’s the way you get to a $197 million surplus – bit by bit, and by being pretty damn tight.