Budget 2014: The Labour-lite budget
National loves outsourcing, and this year they outsourced their vision to Labour.
There – I christened it. Late last evening, Vernon Small posted a story about National’s new programs in the Budget:
New moves to lift the supply of affordable houses and a boost to paid parental leave are expected to be key features of Finance Minister Bill English’s election year Budget on Thursday.
Health and education are set to take the biggest slices of what Prime Minister John Key yesterday said would be slightly less than $1 billion earmarked for new spending.
In addition, RNZ reports:
The Inland Revenue Department will get an extra $132 million in this week’s Budget to chase those who don’t pay their fair share of tax.
Prime Minister John Key said a small number of New Zealanders did not meet their tax obligations, and the extra money would help the department crack down on them over the next five years.
This represents three really big wins for Labour, and for the left more broadly.
Nobody seriously believes these initiatives would be in a National Budget if it were not for:
Labour’s KiwiBuild policy,
Sue Moroney’s Paid Parental Leave Bill, and
the left’s damning exposure of National’s massive effort to catch benefit fraudsters, compared to its tiny efforts to catch the tax fraudsters who cost the country as least 25 times as much.
All these campaigns have put significant pressure on the government, forcing them to dance to the left’s tune in a critical election year. It is another sign of a government that is out of ideas.
But will National’s new programmes be big enough to make a difference? On tax fraud, maybe it really will. Good.
On PPL, any extension to the current regime is welcome. Key had talked earlier in the year about 18 weeks as a possibility. That’s a good start, but I think our new parents and our youngest citizens deserve more time to bond than that.
On housing, I think the program will be big in name but not in impact. That’s because there isn’t much room in the Budget’s new spending allowance for a really substantial new programme:
The operating allowance for the Budget is “a little under $1 billion” according to Key.
Take out the $300-350 million you need just to keep Vote: Health treading water.
Do the same with the$100-150 million you need to keep Vote: Education treading water, and you’re down to around $500 million still available.
Yesterday Brian Fallow cataloged around $200 million of pre-commitments, including $100 million extra for defence. That leaves $300 million in the allowance.
Then take out the $132 million for the tax fraud snoopers. That leaves maybe $170 million, maybe less.
A modest extension to PPL would cost $50-100 million, leaving (generously) $100 million available for housing and other initiatives.
So what kind of housing policy might you get for $100 million a year? It more or less has to be some kind of building programme, because National has already run out its regulatory playbook in trying to make this issue go away (RMA reform, making land available on the edges of Auckland).
But $100 million buys nothing nearly enough to address the falling home ownership and chronic lack of affordable supply. KiwiBuild, Labour’s flagship policy to address this issue, takes an initial kick-start investment of $1.5 billion. National won’t match that.