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No Right Turn: Budget 2004 - What's Next?

Budget 2004 - What's Next?

One of the hallmarks of the Labour government is that they have been mean - or as they like to say, ''prudent'' - with government spending. They've run large nominal surpluses every year, and funnelled excess cash primarily into debt repayment and the superannuation scheme. While this hasn't given them many big policy announcements (the "working for families" package is the biggest single project so far), they have delivered significant affordable progress in many areas. But a side-effect of this is that, having put so much into the social dividend this budget, the government's hands are effectively tied for the next few years (at least if they want to continue being prudent; a future government could always stop those extra debt repayments or even borrow more - and interestingly enough, National is talking about doing exactly that while promising tax cuts. Party of fiscal responsibility indeed...)

In his budget speech, Michael Cullen talked about limiting new spending to about $1.6 billion a year for each of the next three years. After which, if things go well, we'll again be in a position to throw some more cash around. Which raises an interesting question: what's next?

There are lots of options here - lots of government departments which need serious re-investment after being starved of cash during the 80's and 90's, and lots of other things we'd like to do. Properly funding the police so they can investigate burglaries again would be a start. Or ensuring that schools are adequately funded so they don't have to choose between teachers and maintenance. And reducing or removing the crippling burden of student debt is obviously high on my agenda. But there's something which trumps all of that: health.

If there's one thing for which New Zealanders can be said to be happy to pay their taxes, it's health. We want a decent, functioning health system. We want to be able to see a doctor when we need to, without having to take out a loan to do it, and we want to be able to get treatment for common conditions sometime before we die of old age. And at the moment, thanks to a decade of cost-cutting, restructuring, and attempted privatisation, we're not getting it. In the papers every day we're seeing the same stories: inadequate facilities, cuts to services, growing waiting lists, people suffering for years because they lack the points to get a simple operation. It is long past time to fix this.

The government should start looking ahead, now on how best to fix the health system. It should establish a task force to review the entire structure, with an eye to seeing what else is needed. It should avoid restructuring - excessive restructuring is one of the reasons we're in this mess - and should instead focus on the question of resources. What do we need to spend and where do we need to spend it in order to get the health care we need?

It should deliver a few of the highest priority changes as new spending over the next few years. But the ultimate aim should be a massive injection of funds when it becomes affordable in three years time - to do for health what they've just done for working families.

And the bonus for the government? It would send a strong message to voters that they are looking at the serious problems and are planning more than just tinkering around the edges and incremental progress. It would allow them to establish a vital point of difference between them and National: a commitment to well-funded, effective government services. And it would give them the perfect slogan for next year's election: "re-elect Labour to fix health".

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