Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Budget Low-Lights

Budget Low-Lights

Article by Hon Sir Roger Douglas, ACT New Zealand

Thursday, 28 May 2009

Tax cuts:
The tax cuts for 2010 and 2011 have been shelved. This is despite John Key promising in the Budget Speech last year that 'under National, personal tax cuts are a priority. New Zealanders will be able to believe in our tax cuts, they will be able to trust our tax cuts.'

The tax cuts that have been shelved cost under $1 billion. Government spending in the 09/10 year is over $65 billion. In other words, the Government needed to find just 1.5 percent of waste to deliver their tax cuts. This is against a backdrop where Government spending is, in real terms, $18 billion dollars higher than it was nine years ago.

Spending:
Government expenditure is on the rise. Core Crown Expenditure in the 2007/2008 was 31.8 percent of GDP. Under National it will surge to 37.3 percent of GDP in 2010/2011. Even by 2012/2013, it is 36.3 percent.

The cost of spending to the private sector is not just the value that the dollar would have had in the private sector. It is the cost of raising that dollar of revenue – and that is estimated to be $1.20. In other words Government is costing us far more than we even realise.

Health spending in nominal terms is set to increase by over eight percent. Nothing is being done about the incentives in the system, which under Labour saw spending increase by 50 percent, but productivity for doctors and nurses dive 15 and 11 percent respectively.



Moreover, National is emphasising that the annual operating allowance has decreased from $1.75 billion to $1.45 billion. While this is true, the inflationary expectations have dropped significantly from forecasts in previous budgets. In other words, reductions in nominal terms cannot be a test of fiscal prudence.

Deficits:
The current level of Government deficit is one third what it was in 1984. Back in 1984, we managed to get the books back into the black within 3 years. Today, with a deficit one third of the size it was then, it is going to take 11 years to get back to surplus.

Any deficit today has to be repaid with interest by future generations. The deficit is not huge, but its existence shows the unwillingness to make modest cuts to return to surplus quickly.

Productivity:
The budget claims to put productivity first on the Government's agenda. The most important thing that the Government could do to deliver productivity gains is to reduce taxes and reform the public sector. They've given up on the tax cuts, and they've set out no agenda for public sector reform.

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

SCOOP COVERAGE: CHRISTCHURCH MOSQUES TERROR ATTACK


Countries, Tech Companies Sign Up: Christchurch Call To Eliminate Extremist Online Content

French President Emmanuel Macron and New Zealand Prime Minister Jacinda Ardern have led a group of world leaders, tech companies and organisations to adopt a pledge that seeks to eliminate terrorist and violent extremist content online to stop the internet being used as a tool for terrorists. More>>

Research Report: Digital Threats To Democracy
What evidence do we have as to the interventions and solutions that might mitigate against the biggest threats posed to our democracy by digital media, without losing the best of the opportunities that the internet offers? More>>

Gordon Campbell: On The Christchurch Call
The zigzagging nature of Christchurch Call To Action's content (“steps to eliminate terrorist and violent extremist content online” on one hand… and “must be consistent with a free, open and secure Internet, without compromising human rights and fundamental freedoms, including freedom of expression” on the other) reflects the genuine tension that exists on this subject. More>>

 
 

Getting Moving: Wellington Transport To Get $6.4b Overhaul

A new $6.4bn transport project aiming to free up traffic in Wellington CBD will combine a mass transit system with an improved bus network, the government says. More>>

ALSO:

Privacy Commission Report: MSD Systematically Misused Fraud Investigation Powers

An Office of the Privacy Commissioner (OPC) inquiry has found the Ministry of Social Development (MSD) systematically misused its investigatory powers while pursuing benefit fraud, unjustifiably intruding on the privacy of many beneficiaries. More>>

ALSO:

Consultation Doc: Safety Focus In Improved Drug Driver Testing

Improving the safety of all road users is the focus of a new public consultation document on the issue of drug driver testing. More>>

ALSO:

Police: Panel To Debrief Police Response To Terror Attacks

The panel members are former Australian Deputy Police Commissioner Nick Kaldas, former Solicitor General Mike Heron QC, and Director, Professional and Executive Development, Victoria University of Wellington Jeff Ashford. More>>

ALSO:

Gordon Campbell: On The (Lack Of) End Game For The Teachers Strike

Currently, the education sector looks like one of those games of American football where its hard to keep your eye on where the ball is, and where ministerial quarterback Chris Hipkins is trying to throw it... More>>

ALSO:

Other School Strikes:

NCEA Changes:

Musical Chairs: Deputy PM's Post-Cabinet Press Conference

Acting Prime Minister Winston Peters held Monday's post-cabinet press conference, with Prime Minister Jacinda Ardern in Paris to chair the 'Christchurch Call' talks on terrorism and extremism and social media... More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels