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New Zealand Herald

Cullen’s Pension Fund - Quiet Budget - Tight Spending - Tertiary Funding - Waiting Times - Maori Spending - Housing Gains - Embassy In Brazil - Alliance & Greens - Wyatt Takes Over - Labour Legislation - Regional Initiatives

CULLEN’S PENSION FUND: Michael Cullen's giant state pension fund may be ready to come off the drawing-board despite hardly featuring in yesterday's Budget. After producing the first centre-left Budget in a decade, Labour and the Alliance may soon resolve the stalemate over how the $50 billion-plus super scheme will be funded to meet the retirement incomes of baby-boomers. A working paper is ready to go before ministers.

QUIET BUDGET: So, he wasn't bluffing after all. Michael Cullen's first Budget limbo-danced as low as its advance low-key billing. So much so that Labour faithful, waiting a quarter of a century for a real Labour Budget, won't be singing the Red Flag in celebration of this one. The no-surprises document was swiftly pigeonholed as responsible - but dull. This is a marked departure from tradition. Normally, new Finance Ministers begin their careers with a bang and end with a whimper.

TIGHT SPENDING: Finance Minister Michael Cullen may be picking an election-year schoolyard brawl, with a tight cap on future spending leaving few lollies to scramble for in two years. Heavy expenditure in the first year - $1.23 billion, including big-ticket items already announced - has left little room to play within his $5.9 billion overall spending limit.

TERTIARY FUNDING: Tertiary institutions will probably lose money by taking up the Government's offer of a 2.3 per cent funding increase in exchange for freezing fees. The deal has been presented in the Budget as an option, though institutions may have little choice but to accept it. If they reject it and make up the shortfall by raising fees, they could risk putting the Government offside and losing students to cheaper institutions.

WAITING TIMES: The Government has fulfilled its major pre-election promise to attack surgical waiting times, announcing in the Budget an extra $74 million a year for non-urgent operations. The money comes on top of $21.5 million pledged in a pre-Budget announcement in April, bringing the total spending on all elective surgery in the coming year to about $390 million.

MAORI SPENDING: The Government has unveiled a comprehensive package for Maori in an attempt to close the wide gaps between rich and poor New Zealanders. Labour's powerful Maori caucus is being applauded for the biggest Budget gains ever for Maori, with an extra $175 million on Maori-related initiatives over the next 12 months.

HOUSING GAINS: If you can get into a state house, this is the Budget you've been waiting for. But for other low-income people, the gains are slim. The Budget caps last month's announcement of cheaper state house rents with a modest expansion of new state house building.

EMBASSY IN BRAZIL: Beneath the crushing grey weight of estimates, appropriations and outputs yesterday there was a tiny samba beat. It came with the Budget announcement that New Zealand will open its first embassy in Brasilia, the capital of the land of soccer, an awful lot of coffee and the Girl from Ipanema.

ALLIANCE & GREENS: Fighting broke out on Labour's left flank yesterday, with the Alliance accusing the Green Party of grandstanding over its unique Budget package. Deputy Prime Minister Jim Anderton lashed out during his Budget speech in the first public display of Alliance bitterness over the $15 million of initiatives ring-fenced for the Greens.

WYATT TAKES OVER: Get well, Jenny. Please get well. Heart trouble has laid Opposition leader Jenny Shipley low for a few weeks. But her relative strength was never more apparent than by its absence yesterday as her dutiful deputy, Wyatt Creech, struggled to respond to Michael Cullen's seeming effortless delivery of his first Budget.

LABOUR LEGISLATION: The Government has put aside an extra $10 million to handle industrial strife in anticipation of its new labour law legislation. A spokesman for Labour Minister Margaret Wilson denied the money was an admission by the Government that there would be more strikes when power shifts back to unions under the Employment Relations Bill.

REGIONAL INITIATIVES: Dollops of money for regional initiatives and a rejigged work-for-the-dole scheme emerged yesterday as the main planks in the Government's employment drive. Deputy Prime Minister Jim Anderton trumpeted his economic development package as the cure for job ills, setting aside $219.4 million for industry and regional development over the next three years.

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