Tracy Watkins says ‘yeah, nah’ to so-called transformational budget

Finance minister Grant Robertson. Photo / Mark Mitchell

Tracy Watkins isn’t impressed with the budget, and is certain it didn’t live up to the hype of Jacinda Ardern’s government: Quote:

Beneficiaries are protesting?outside the prime minister’s office, teachers are threatening to walk off the job, there is a cautious thumbs up from business.

So far so normal the day after the Budget. If it wasn’t for Labour cancelling National’s tax cuts you?might be forgiven for thinking?this was National’s 10th Budget ??not the first?to pick up where Helen Clark and Michael Cullen left off for Labour a?decade ago.

Prime Minister Jacinda Ardern is calling Thursday’s Budget transformational but it feels more like business as usual. End quote.

That isn’t really a vote of confidence. The left wing have been very muted on the budget. They will be fuming. Their team delivered a blue budget.?Quote:

[M]ost of the plaudits have been for Robertson’s focus on banking a surplus ??$3.1 billion this year ??and for sticking to the Labour-Greens Budget Responsibility Rules, which require net debt to be below 20 per cent of GDP by 2022and to keep operating expenses below 30 per cent of GDP.?

Operational spending is actually?below 30 per cent of GDP during the forecast period, at 28.5 per cent. That’s?less than National was spending as a percentage of GDP. If there was any criticism of Robertson, it was that he?had some leeway?to do so much more than he did.?It was?a solid Budget, but hardly transformational.??End quote.

Not transformational at all. Imagine how transformational it would have been if, instead of spending money on rich kids at university, they spent the money on actually doing something about child poverty.?Quote:

?Even National seemed?flummoxed,?lurching?from attacking it?as a tax and spend budget, to accusing Labour of breaking its?promises, because it hadn’t?spent?more.

National can legitimately?run both arguments, and in the end it seems to have?settled on both. Labour is?spending more but on the wrong stuff, according to National leader Simon Bridges.

Proving the old saying about?lies, damned lies and statistics, it all depends on which numbers you use, of course. ?Figures released by Victoria University and NZIER show spending per capita?is $16,400 in Robertson’s Budget, up from $15,600 under National.

But Labour voters will likely still?be feeling deflated by the Budget’s lack of follow-through on some of the more hyped-up expectations.

Thursday’s Budget was never about those voters, however.

Like the last National Government, which lived by the mantra of incrementalism, Labour’s promised for “transformation” will have to be delivered by instalment, if it wants to carry the voters along with it.

After nine years in the wilderness, Ardern and Robertson’s?biggest?challenge?is wooing those voters in the ?political middle who couldn’t bring themselves to vote Labour last time, because they trusted John Key and Bill English with the economy more.

They’ve stuck to National like barnacles over the last 10?years. There is?no better time to dislodge them than now, while the jury is still out on National’s new leader. But those voters are hyper-sensitive to criticism?that a Labour government will squander the gains of National’s so-called “rock star” economy.

Calming a jittery business community is crucial to that. The?elephant in the room ??business confidence ??has well and truly come out of the corner.? Ardern and Robertson have been on a business charm offensive to reassure them it’s steady as she goes. The Budget shores up that message.???End quote

It was a blue budget, delivered by the red team. All those years railing against neo-liberalism and what do they do… more of the same.?Quote:

Labour’s true believers might not like it but a boring Budget?that cops criticism for spending too little, rather than too much, is??probably a political win?for Robertson.

And the believers?can’t complain too much.

Most of the gains from Labour’s pre-Christmas mini-budget are yet to roll out? ?? the $60-a-week baby bonus, a?big families package, a boost to?Working for Families payments and the accommodation allowance to name a few.

Low and middle-income families will be feeling better off once those programmes are delivered.

And having kept his powder dry in this Budget, Robertson has given himself a lot more room to move in his?next two???including?election year.

He will be awash with even more cash by then, but the balancing exercise will get harder, not easier. He is going to have to exercise fiscal restraint while demonstrating change is under way.

Because it wasn’t the promise of business as usual that carried Ardern into power, but the promise of change.???End quote

I’m not sure the government will be awash with more cash by then. There are some hard bites coming as a result of some of the more inane decisions of this government. It is coming up to winter, and there will be two more winters before the next election, and I will bet you a dollar to a knob of goat poo that National will find people living in cars then sheet that home to Phil Twyford.