I'm trying to get lots done at work today, so we'll see how this goes. Chances are you'll get better live-blogging at The Standard, but I can't see that from here, so I'm listening to the Budget Speech on Radio NZ National and will list the bits that occur to me as possibly important. Feel free to add your thoughts in comments as we go!
2.06pm Mentions that they will maintain Working For Families, does this mean the current levels are safe?
2.10pm Lots of waffling about the Bad Times we are going through. Setting the stage for a Grey Budget.
2.14pm "We will continue to support public services and help NZers through the downturn..." Bill English setting out the aims of the Budget.
2.15pm Going over past measures they have brought in eg bank guarantees, JobStart, small business relief package, state housing upgrades, roading projects, 9 day working fortnight, increasing education options for young people, national cycleway (big cheer for the last).
2.17pm Thorough review of Govt regulation, incl RMA, Overseas Investment Act, review of Electricity industry, telco review, water management and environmental review, building act reviews. Acknowledges Rodney Hide's role as Minister for Regulatory Reform.
2.19pm National infrastructure plan to be delivered by end of 2009.
2.20pm Commentary (sorry missed who) says they will be spending $3B more this year, however still quite constrained.
2.22pm Anne Tolley has a release out about ECE, basically saying they will extend the 20 Hours scheme to playcentres, kohanga reo and 5 yos, and removing the 6 hour daily limit.
2.24pm $1.45B new spending apparently. English states: "Considerably less than in recent years... it would have been imprudent to continue spending [at the same rate as recent years]" Reviews have saved money, which has been redirected.
2.28pm $70M to increase health staffing for electives. Also increase training places in health. Money for increased maternity needs. Increase elective operating theatre capacity.
2.29pm Started talking about education. He's not talking much detail, v frustrating. Schools operating grant goes up, but the release says it's just the level of inflation?
2.32pm Health reporter notes extra money for medicines but no extra money announced for increasing number of midwives in training. Gayle Woods notes education part of Budget more about what's not there. Smallest increases in many years for schools' operations grants, little for tertiary institutions. Community education given least. Reduction in money for university salaries, also getting rid of a lot of student scholarships and training programmes.
2.33pm Primary Sector Innovation programme to be launched for agriculture.
2.34pm Law and order a priority. 600 more police by 2011. Half in Counties Manukau, rest spread nationally. Also focusing on crime proceeds and laundering. Money for community probation, improve quality of parole management. Increased prison capacity and planning for further potential expansion (that means more prisons).
2.36pm Public sector will face smaller or non-existent increases in the future. "considered decisions now will avoid harsher decisions later"
2.37pm Increased investment in roading. Big claps. Surely this is not news? $115M for new trains (!) and $90M additional support for Kiwirail (no claps for this). Internet broadband roll-out funding (lots of boring numbers).
2.38pm Sounds like that is it in terms of the lollies? Now talking about debt management. "There will be ongoing restraint on future spending increases". $1.1B in 2010, +2% per year in future budgets, for extra spending in coming years.
2.39pm Govt's commitment to future Super contributions is absolute. Big claps, biggest to date, some heckling too?
2.40pm Suspending contributions to Superannuation Fund. Here's the Govt's Fact Sheet about the Super Fund.
2.43pm 2010 and 2011 tax cuts deferred. Lots of heckling. No clapping. Talks about the total value of over $1B of tax cuts delivered since being elected. Here's the Fact Sheet. So that's a broken promise. RNZN's political editor points out it was as late as February that English guaranteed them.
2.45pm I note Richard Worth has a release up about $2.4M more to fight child pornography.
2.47pm "This Budget ensures NZ maintains one of the lowest debt levels and one of the strongest balance sheets in the OECD."
2.49pm Commends the Budget to the House.
19 comments:
no extra money announced for increasing number of midwives in training
Damn and blast it!
Nevertheless, I'm glad that so far it's all nowhere near as bad as I feared.
I have to admit, I'm incredibly relieved - I really was bracing for the Apocalypse.
Suspending contributions to the Cullen fund seems sensible to me - borrowing to save looks pretty daft from wherever you are on the political spectrum.
No doubt I've missed heaps of the detail, it'll be interesting to see what comes out of the detail.
brilliant job julie!
anna, now is the best time to be buying when prices are so low. buying those same assets in a few years time might cost twice as much.
Yes, if you accept the logic behind the Cullen fund. It doesn't sit well with my Keynesian leanings. I'm not a huge fan of relying on investments to produce future income for the state - it's far from certain, and it takes the $ out of circulation when it could be providing economic stimulus and/or going into under-funded public services.
Increased access to 20 hrs free ECE is fantastic - especially for kohanga reo which is expensive stuff for a lot of families. But not til July 2010? :-/
Not thrilled about proportion of law enforcement spending to proportion of tertiary education spending.
I'm not impressed they're cutting the mortgage diversion part of Kiwisaver. That was going to come due for us within the next few months, and was going to be a help at cutting the length of our mortgage.
Cutting back debt - ur doin it wrong.
Also, saying "only 600 people took it up" is disingenuous - you could only partake in it after 18 months (I think) of being on KS. Therefore, for those people who would WANT to partake it's only just becoming available now. Durh.
Oh dear - the mortgage diversion thing escaped me, and I'm very sorry for those who are struggling to get into their own homes. I can remember only too well the struggle my partner and I had to get into our very modest, cheap first home.
The ECE thing is intriguing - I've long felt that not all kids are ready to go to school on their fifth birthday, but the lack of alternative arrangements means parents tend to have to send them regardless. More flexibility around that is good, I think.
Making it harder for people to own their own home and/or pay it off sooner is a direct inhibition to retirement savings.
I am not upset about the tax cuts going, just upset at a broken promise. Can't judge how good the extra investment in health/education etc will be just yet - will talk to a family member working in the health care system (upper mid level) this weekend about it.
Looking at some of the detail in my area of work what seems to have happened is that basically they have cut lots of small but important programmes, which of course they didn't put in the Budget speech and they seem to have largely left out of the press release for that area too. I didn't want them to cut these things, but at least they could be a bit more upfront about the cuts, imho.
Of course the free hours for Playcentre kicks in five days after my youngest's fifth birthday so, seeing as he already thinks he should be at school, we won't get the benefit of that.
My oldest was a six-year-old school starter and, for him it was far-and-away the best possible choice.
The rest of the budget loos so dull that I am well convinced there are all sorts of hidden horrors.
Something else that's been passed around in tertiary circles: Bonded Merit and Step Up scholarships (the gvt scholarships given on NCEA achievement levels) have both been cut.
Not as harsh a budget as it really needed to be. We're still living way beyond our means as a country and the lack of cuts means that we just have to borrow more, and our kids will have to pay it back with interest. I'd rather live a harder present now, and leave my kids and grandkids a less burdened future, but that's just me...
IMESS, that's a perfectly valid decision if you can afford it. for those 70,000 who are going to lose their jobs and live on a benefit, they'll be living pretty hard already. and for those who have health issues, they need to get those resolved. and canning the modern apprenticeship scheme & tertiary scholarships will actually mean that we pay and the next generation pay for the lack of investment in this area - lack of training now means locking them into low paid wages in years to come.
so it isn't that simple. and that's why dr cullen was so busy paying off debt in the good years rather than giving out tax cuts - so that we'd have the ability to borrow extra to tide over the bad years.
and as for superannuation, our kids and grandkids are going to have to pay even more if we don't build up a fund now.
Stargazer - I agree that building up the Superannuation fund (ie - saving for our collective retirement) was absolutely the right thing to to do in the surplus years, but now that we're running a deficit it makes no sense to borrow money at interest to buy shares in assets which are decreasing in value and only giving a 1.5% return. As far as increased health, education spending etc, the point is that we as a community CAN'T afford it. If we choose to borrow money for those things now, we're basically dumping the cost of our current living on to our kids. If we borrow too much now, our kids are going to look back at these 'pretty hard' times as the golden age.
IMESS, again, i'd say you're shrotchanging the next generation by dooming them to low-wage jobs by not spending on education now. they'll be able to pay off that debt because they'll be earning more.
also, re superannuation spending, see this excellent post by keith ng. especially comments where he makes the case for borrowing to invest. as he says, it's called leveraging and private sector businesses do it all the time.
Stargazer - private sector businesses do borrow all of the time. They also go bankrupt from overborrowing all the time. I didn't say we can't borrow, just that we are now borrowing more than we'll be able to pay back in the future, which is why the bottom of the blue swish in the third graph of your link is going DOWN in the long term. It shows that we are still living above our means with our current spending, and our kids will not be able to afford the standard of living, including education, which we currently enjoy. This is terrible. If one of your accounting clients came to you with ever-increasing debt, what would be your advice? Increasing general education does not guarantee increased future income, as any low paid degree holder can tell you. NZ needs to invest in productive, export focused technology and education, which HAS received a boost in yesterday's budget.
we're not anywhere near the position of iceland or ireland, nor even remotely close to the position of UK & US, so going bankrupt is so not an issue for us. and we're in that position cos we paid off debt. in fact the government books are quite healthy and it's private sector borrowing (particularly for housing) that's has been and continues to be the problem. this budget does nothing to deal with that - no capital gains tax nor any other measure to curb private sector borrowing.
given that bankruptcy is not an issue, given that we have scope for borrowing, given that we totally should not have brought in the 1 april tax cuts, it would be almost criminal to squeeze spending on vital areas - particularly training and R&D - and foolish not to continue to save for super which our kids won't be able to afford if we don't.
if you can get hold of a copy, jim anderton's budget speech was really good in this area.
You should be pretty happy with this budget, it delivered nothing scary - which frankly surprises me you thought it would as Key's National Party simply wouldn't do that.
The tax cuts being removed is a broken promise but again that shouldn't concern you or your readers as most of you want higher taxes anyway.
Other than that its fine, safe and boring.
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