However, with a strong economy, a surplus of $1.5billion, and a general election mere months away, it is not surprising the cash has been well and truly splashed.
As expected, the main thrust of yesterday’s Budget was significant social investment. The Family Incomes Package alone provides an extra $2billion per year.
The package makes significant changes to Working for Families and increases the accommodation supplement, the accommodation benefit for students and the family tax credit rates for young children. It raises the lowest two tax thresholds, giving most earning households an extra $1000 to $2000 a year (and without the "tax cuts bribe" label).
There are a range of other social investments aimed at supporting needy New Zealanders. The Ministry for Vulnerable Children Oranga Tamariki gets $424million.
This week there were calls for billions to be spent on health and education, but the Government said that sort of spending was not on the cards.
Miraculously, health has been given the biggest boost in spending in years — $3.9billion across the sector — including an extra $1.76billion for district health boards, $1.54billion for care and support workers (the newly agreed pay equity settlement), plus investments in key areas under pressure (and in the headlines) including disability support services, ambulance services, mental health services ($224million over four years), elective surgery and primary healthcare.
Education gets a $1.1billion boost. There is a $2billion investment in law and order and $81.8million for corrections. The Defence Force gets $982million.
Under pressure to invest in infrastructure for the growing population, more than $9billion will be pumped into the state highway network over four years and $548 million to maintain and upgrade New Zealand’s rail network. Auckland’s Central Rail Link receives $4.6billion.
After much criticism about its starvation of public broadcasting, Radio New Zealand gets an extra $11.4million.
While the Government is trying to bill it as a something-for-everyone Budget, there are definite losers.
The $205 million boost for social housing and $100million extra for housing on Crown Land seem woefully inadequate to address the issue. But the Government has steadfastly refused to acknowledge there is a housing crisis. It is hoping the accommodation supplement sweeteners will disguise any meaningful attempts to get to the heart of the issue.
Its conservation investment ($107.8million) has also been criticised as inadequate.
And it is certainly banking on the average New Zealander not caring about our climate-change obligations, giving a paltry $4million extra — over four years — to progress New Zealand’s climate-change work.
Ironically, for a National Government, the complaints have been mainly about the lack of benefits for businesses.
The Government has clearly gambled on its traditional supporters sticking with it however, and has splashed out on social investment to steal Labour’s thunder — and, it hopes, its voters.
It has been forced into some of that investment, though. Its focus on growth has come at the expense of many lower and middle-income New Zealanders, especially in our bigger cities, who are locked out of the housing market and struggling to make ends meet. Homelessness and hopelessness are not winning strategies.
The Government holds the trump card in election year.
Whether voters buy into its Budget, whether it is seen as bribery or brilliance, will become apparent in September.
