2019 New Zealand Fiscal Budget run down

Yesterday Treasurer Grant Robertson announced the 2019 Fiscal Budget, which is delivered in late May. It sets down the spending priorities for New Zealand.The Government made a promise that the 2019 Budget would be a budget about “well being”. Many people on the centre-right thought that the whole idea was all just fluffy feel good spending with little practical value.

At a first glance there appears to be little unexpected expenditure. Defence, education and a number of portfolio’s that have had recent major announcements knew not to seriously expect much more than what had already been allocated. As noted in other articles, the Defence Force is getting P8 Maritime Patrol Aircraft that can watch our waters, but also perform search and rescue. At some point in the next couple of years a solid decision will be taken on what shall replace the C130 Hercules as our major transport plane.

Not surprisingly the major beneficiaries of Budget 2019 have been those who need social welfare assistance from the Government. One of the several measures introduced is to index benefits to wages, which stands to affect about 339,000 individuals and families.

Schools were a surprise winner. Despite the teachers being on strike and Minister for Education Chris Hipkins being adamant there is no more available, $1.2 billion has been set aside for maintenance and upgrading of school property. This will help fund new class rooms for expanding schools, new/replacement buildings.

Perhaps the biggest loser was health. Few significant announcements appear to have been made. I was wondering if there might be money for upgrading hospitals and a modest top up of the District Health Boards following issues in recent years around funding calculations.

There was a very welcome investment of N.Z.$1 billion for railways, as an acknowledgement of the significant but under appreciated role that they play in our economy. Hopefully it will lead to Kiwi Rail better utilizing the South Island track network, which could easily allow more freight to go on rails instead of via road.

National and A.C.T. invariably cried foul on the apparent lack of regard paid by the budget to the economy. This demonstrates to me that they clearly have not latched in any way onto the fact that from Day 1 this Government has said that it will have a stronger focus on the well being of people. It is an attempt to provide redress for the socio-economic consequences of National’s market driven  philosophy. From those with family in mental health institutions, to those struggling to get their children through school and retirees concerned about being left behind in the digital era, this Budget appears to try to address their needs.

On a cautionary note though, the budget, whilst nice for those in income poverty and having issues with mental health, does raise – again – questions about the wisdom of removing the Capital Gains Tax from the table. Going into election year with National and A.C.T. nipping on Labour’s heals, the money taken from a C.G.T. would have gone some distance ensuring New Zealand’s debt does not get too big.


What I hope for from New Zealand Fiscal Budget 2019

Whilst the Government struggles to contain the effects of National’s claimed leakage of figures from today’s Fiscal Budget, I give my take on what should be in Budget 2019. This is not a complete list, but a priority one based on what I believe has been a significant and sustained under funding of programmes and support for the very young and the very old, the mentally unwell and those in the education system who are not in a position to fund their own expenses.

I am not expecting much, if anything new, for education today. I believe Minister of Education Chris Hipkins when he says that he cannot offer teachers all that they are asking for. A lot of the demands are things that are built up with time and need refining as they go – it is not a simple case of saying “here’s the money, it is all ready to go”.

The same goes for Defence. Earlier announcements might get a top up such as the P8 Poseidon patrol aircraft acquisition. However I am not expecting Minister of Defence Ron Mark to announce much if anything new.

Where I am expecting to see some additional support are:

  • Non monetary: Moves by Treasury to implement some of the recommendations made by the Tax Working Group in their review, which came out earlier this year. For the Government to improve its revenue, changes need to be implemented fairly rapidly
  • Non monetary: Investigation into Pigouvian tax being used to dissuade persistent polluters by taxing them if more than x is discharged per business year
  • Non monetary: Lower the range of housing prices for Kiwi Build houses – the current range is unrealistic
  • Mental health: the Government has announced it will accept nearly all of the recommendations that were made in the mental health inquiry, except – notably – the one for a suicide reduction target and one other; given the problems being had with mental health patients in hospitals, the explosion of problems among youth ranging from effects of bullying, societal pressure and domestic situations; support for mens mental health
  • Health: a top up for D.H.B.’s to help maintain services
  • Disability sector: frankly an abomination in terms of how it is being treated, where lip service is everything and solid accountable actions are nothing, a top up across the board for all such
  • Social Development: particularly those with school age children who might be struggling to afford the basics and may need assistance purchasing school materials, uniform parts or funding school trips; assistance for superrannuitants including perhaps further discounts on essentials
  • Tertiary Education: Introduction of a postgraduate allowance for all Honours, Masters and PhD students recognizing that it is impossible to expect such students to hold down full time work and complete qualifications that are time and energy intensive

Secondary priorities that I think need be provided for include:

  • investment in railways particularly in the South Island, Hawkes Bay and Gisborne.
  • reinvestment in science with some emphasis on explaining theory to students.  waste reduction, reducing crime, and simplification of the research grant application process for researchers
  • encouraging reduction in harmful carbon emissions by recycling aluminium; introducing hempcrete; investigating the feasibility of waste to energy

There could be more, but when the Government walked away from the C.G.T. it walked away from a significant opportunity to check the unsustainable growth of the wealth and income of the 1% who have 50% of all of the known wealth. In doing so it deprived New Zealand of a substantial source of tax revenue that will now probably not happen for another generation – if ever.

Budget leaks or National Party hot air?

The National Party has claimed that the Government has been misleading about the nature of the Fiscal Budget it is due to release on Thursday afternoon. The claims, which come from leader Simon Bridges who says that he has received 22 pages which which show that Defence and Forestry are in line for big expenditure, instead of social welfare, health and education initiatives central to Labour’s promise of “well being”.

To some extent it is a bit of both. Treasurer Grant Robertson has admitted that some of the figures being bandied about are true, but not all of them. Some of the claims are also potentially misleading, such as National claiming that it is not about the well being budget that Labour has promoted. Mr Robertson also pointed out that many of the figures alluded to a four year spending plan that was already known about and therefore the figures were a) not new and b) possible not accurate any longer.

Inevitably there was going to be money set aside this year or next year anyway in the defence budget due to the announcement of the P8 Poseidon patrol aircraft being purchased. On top of that there are other equipment upgrades and replacements being announced in the near future or which are being undertaken right now.

Another alleged leak that was mentioned today regards the budget  is an alleged increase in the budget for forestry initiatives. Minister for Regional Development Shane Jones was not saying much today about the claims other than it not being his job at this point in time to point fingers as to where the leak came from.

As I am not sure how much money is in the coffers, I cannot judge and nor can anyone else just how much of the claims are fakery. Where Mr Robertson should be concerned is about finding out how any figures at all came to be leaked. Was the leak intentional and if so, where did it come from? The annual Fiscal Budget is something that is usually embargoed until 1400 hours on Budget day, which is in this case Thursday 30 May 2019. Normally only Treasury, Cabinet, the printing firm and the Parliamentary services would have access to it prior to the release.

Still, this will not be a great look for the Government on the eve of its second budget, and Prime Minister Jacinda Ardern and Mr Robertson will no doubt be at pains to make sure this does not happen again.



The looming teacher mega strike

So, it is finally here. On Wednesday teachers and principals across the primary and secondary education sectors will come together for a mega strike. This will be a strike on a size not seen before in New Zealand and which points to grave issues across the broader pre-tertiary education system.

I will not comment on the reasons for the strike as I have addressed these in prior articles, and I have little more to add. What I will say however is that it might be fortuitous for the Government that both the primary and the secondary education sectors are striking simultaneously. It could be seen through opportunistic eyes as an opportunity to talk about the expectations that the two sectors have of each other when dealing with Year 8 students that are about to make the transition from intermediate to high school. Is this even something that they discuss?

It is about time though that the community gets real as to what we realistically expect of teachers, and what teachers can realistically expect of students and their parents. At times I wonder whether some sort of contract between the parents of the student and the school about common expectations other than having a willingness to learn and behave properly. Except it really should not have to be coming to this.

In low socio-economic areas, I can understand that parents/caregivers might struggle to provide things such as breakfast to ensure the child starts that school day on a full stomach. I can understand it if sometimes stationery or uniforms are hard to afford – when I was at school it was pens, pencils, exercise books, rulers and rubbers, and most other stuff was extra. Now it is electronic devices. Across the course of the school year we had to pay up for the annual class camp, and a couple of school trips such as to see a production of The Nutcracker (which I did in Primary School), or go to Science Alive (an interactive place where children and adults could learn about science), the Antarctic Centre or Orana Park Wildlife Refuge.

Given the relative lack of change in incomes in the last two decades it makes me wonder how much a parent on a 1995 income could afford now in terms of kitting out their son/daughter for school – a time when a pie and Coke from the tuck shop cost not more than $3.50. It also makes me wonder how much of what we require for our children’s education is really necessary, whether there is not some better way of teaching with less material.

But how much can the school realistically provide? How much SHOULD the school realistically provide? There comes a point where the school knows its budget simply will not stretch any further and that if it does somehow manage to find a few more dollars, they will be in high demand for other uses.

The looming mega strike will be largely about pay and conditions, but I am sure that on Wednesday when the strike happens we will see that the teachers have other issues in tow as well.



Legacy of the Maybot – and what it means for New Zealand

British Prime Minister Theresa May quit on Friday night New Zealand time. After two tumultuous years at No. 10 Downing Street, during which time in equal measure she earned ridicule and contempt but little praise. Mrs May announced she was standing down on 07 June 2019. As New Zealand and the world watch to see who will replace her, it is useful to have a look at the legacy of Mrs May – otherwise derisively known as the “Maybot”.

It will be defined in part by a burning tower on a beautiful summer evening in London in 2017. The Grenfell tower fire was a man made tragedy that in large part could have been avoided, and will be better remembered in four parts:

  • the robotically cold officialdom that utterly failed to show any humanity;
  • the fire fighters who had to fight the fire and will be forever haunted by what they saw (watching a Youtube clip of them remembering the dead was hard on the eyes);
  • very obviously from across the broad spectrum of backgrounds they came, the victims themselves and their families who are no closer to finding out how this happened;
  • the many people who saw it and wondered how this could be happening in 21st Century Britain

This was Mrs May’s first big test and a spectacular failing of her leadership, her compassion and her ability to make anything politically useful out of the fire. Disasters are not meant to be political capital making exercises, but a public figure who pulls all the right levers in the appropriate time – high visibility, seen to be caring about the victims, offering what relief might be possible – and it can become a significant unintentional exercise in exactly that.

In New Zealand the Grenfell fire caused a brief ripple of concern about high rises in New Zealand that might have the same or similarly flammable cladding on them. And then, just as quickly, perhaps overtaken by our looming election, it dropped out of sight and I am sure many New Zealanders will have completely forgotten about it. In London that is not so easy.

As an Amnesty International member and activist, the willingness of the British Government to sell armaments to Saudi Arabia as the latter comes under renewed fire for its alleged war crimes in Yemen, this is like a cheese grater on my conscience. I can’t ignore it and the idea that a western nation admired and respected by New Zealand thinks arming war criminals to commit more war crimes really does not sit comfortably. I have tried to start, as well as sign numerous acts of activism against this in the hope that Saudi Arabia will put the cluster bombs and the American and British combat jets that were used to drop them on Yemeni schools, hospitals and houses, away.

But it will be that awful mess on the common table shared with the European Union that will define Mrs May. Call Brexit what you will, but can anyone honestly say nearly 3 years after the referendum and over two years since the exit process was triggered, that they absolutely know what needs to happen and how? I certainly cannot. From a New Zealand stand point it is as clear as mud, just like it was on the day the two year Brexit process began.

Because of its muddy clear clarity, I can offer you the following assessment: I have no idea what is going on, except that Boris Johnson wants Mrs May’s job and has said Britain will be – deal or no deal – gone by the end of October 2019. But with possibly up to 20 people challenging or considering challenging for Mrs May’s job, Mr Johnson must first get the job.

So, when Mrs May departs, she will – despite being warm to Prime Minister Jacinda Ardern and showing respect for the Christchurch mosque attack victims – largely be remembered for being a Prime Minister who operated in a fog as impenetrable as the Brexit mess she was handed, and will hand on to her successor.