Budget 2015: Opposition ready to attack

Metiria Turei
Metiria Turei
Opposition forces are gathering to tear the Government's seventh Budget apart this afternoon, in sharp contrast to previous years when Finance Minister Bill English received a near dream run.

Budgets in the past six years have received muted criticism, even from the normally most vociferous of Government opponents.

However, this time seems different, with Green Party co-leader Metiria Turei instrumental in raising the issue of child poverty and the expectation the Government will be funding very little today to help the country's most vulnerable.

Ms Turei, from Dunedin, said the Government had abandoned New Zealanders aged under 40. Younger New Zealanders had never had it so tough and today's Budget would do nothing to change that.

''People under 40 have never been less likely to own a home, never been burdened with more student debt, never been more likely to be under-employed and, in the case of children, never been more likely to be sick from a disease of poverty or turn up to school hungry.''

Social agencies, such as the Child Poverty Action Group, the Salvation Army, health groups, along with the Council of Trade Unions are focusing on what they say is needed to combat child poverty and a housing shortage for people on low and fixed incomes.

First home buyers have received encouragement from the Government through changes to KiwiSaver withdrawal rules and funding options.

However, Mr English has his hands tied by an economy slowly going off the boil.

Health and education spending likely to receive the most generous portions of money in the Budget.

The Government's personal tax take has been falling, meaning the Government must continue to cut its costs - including Budget spending.

Mr English has effectively ruled out spending to help reduce child poverty, despite Prime Minister John Key having that as a major election pledge last year.

There will be some revamping of the way social services are delivered to New Zealanders. And with the Government continuing on its path of better public services delivered at less cost, merging some of the social welfare polices, agencies and staff cannot be ruled out.

Last Sunday, Mr Key released the new policy on taxing capital gains on residential property sold within two years of purchase.

And overseas investors will be subject to closer scrutiny by having to have an Inland Revenue number and a New Zealand bank account.

Those measures are not expected to bring in much cash but they are an acknowledgement the Government finally believes there is a housing crisis in Auckland which is also hurting regions like Otago.

Today, the Government is likely to bypass the Auckland Council and set up its own housing zones with the aim of building affordable housing.

The Government and the council have been on a collision path since the council refused to fast-track building consents on some of the land banks set aside in Auckland for affordable housing.

Housing Minister Nick Smith warned the Government could take action to solve the issue and apart from installing commissioners in place of the council, an unlikely prospect after the Environment Canterbury move, taking over the running of housing projects itself seems the most likely alternative.

Tax cuts can be ruled out. Instead, the Government is forecasting $500 million in ACC levy savings for New Zealanders - effectively a tax cut without stoking inflation.

While the Budget will not be one of big spending, the Government has been drip-feeding money out this month, including $1.85 million yesterday on two tourism attractions in Blenheim and Rotorua.

Other spending not specifically tied to pre-Budget announcements includes $10.4 million on Ellerslie School, $23.5 million on a South Auckland mental treatment facility and $298 million on four public private partnership schools.

As much as the Government needs to do something about regional development, it does not have the funds to do anything but top up tertiary institutional funding and call it regional funding.

Loud criticism of the Budget will not dissuade the Government from continuing with its plans but continual opposition may start to hurt the image of Messrs Key and English as prudent fiscal managers as the year drags on and the voices get no softer.

dene.mackenzie@odt.co.nz

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