Budget 2012: Squeezing Every Drop Out Of A Zero Budget

Thursday, 17 May 2012, 11:19 am
Article: The Scoop Team

The Government is trying to squeeze every drop of publicity out of its ``Zero Budget’’ ahead of its delivery next Thursday.

Relatively small announcements – in terms of spending - around welfare, education and health have managed to grab the headlines and fuel debate, and there is continuing speculation about what Finance Minister Bill English may have up his sleeve.

Top of the list of possible initiatives is yet another hike in the excise on tobacco and alcohol and a further tightening of rules on property investment along with other tax loopholes.

English also has to find a credible path to his pledge to return the books to a surplus by 2015.

Treasury forecasts have been predicting recurring deficits thanks largely to a declining tax take, a drop in investment returns, and weak economic growth.

Money shuffling to fund priority projects and axe others will also be a feature as will as an array of less ``sexy’’ decisions about how capital spending will be funded and accounted for.

Many parts of the state sector are thirsty for capital expenditure such as IRD’s desire for a $1 billion computer upgrade and the need for new infrastructure in Christchurch through to the multi-billions of dollars that the Transport Agency has been urging the Government to let it borrow.

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