Bill English's Budget in four words: "Nobody moves, nobody gets hurt."FEAR. That’s what Bill English’s first Budget is all about. Fear of the electorate to which John Key presented National as a reformed and reliable party of caring conservatives just seven months ago. Fear of what will happen to the Government’s popularity (and electability) if the people who so emphatically voted it into office, begin to suspect that they have been deceived.
That is why so little has been done – why so little could be done – in this Budget. English had to protect his boss, the man who, more than any other person in the National team, secured the Treasury benches for the Right. If John Key is transformed from a figure of lightness and hope, into a symbol of heavy-handed fiscal discipline and despair, the National Government won’t make it past 2011.
So, English has been forced to keep all of the safety-nets in good condition. Nothing off the pension. Nothing off Working for Families. Nothing off the unemployment and welfare entitlements. Good Lord! They didn’t even reactivate the interest payments on student loans! English offered up a believable inflation/population adjustment for health, and a not-quite-so-believable adjustment for education. There was even a feel-good (and, let’s be fair, a real-good) gesture towards home insulation.
As Key almost said, New Zealanders can sleep easy in their beds tonight – because, in the face of the worst economic conditions since 1930, all their entitlements are still in place.
But for how long? And at what cost?
The tax cuts have gone – and good riddance. But a ten-year suspension of payments to the Superannuation Fund? That undermines the expectations of the aging Baby Boom Generation, and sets up a truly vicious social conflict in the decades ahead. Because surely Generation X and Y will balk at supporting their elders with a pension that, in all likelihood, they will not be in a position to pay themselves?
And that's the real problem with Budget 2009, by allowing the voters to lie easy in their beds this year, English and Key have merely pushed out the day when something more than maintaining the status-quo will be demanded of them.
Treasury’s forecasts make it clear that New Zealand’s economic fortunes are not going to improve anytime soon. The number of people out of work is predicted to rise to 8 percent – and that’s the hopeful estimate. The nation’s indebtedness will continue to rise inexorably (the price of maintaining all those entitlements without increasing taxes) and with it the expectation of New Zealand’s creditors that, somehow, this country is going to come up with a plan for paying it back.
Aye, and there’s the rub. Where is the money in this Budget for R&D, for skills training, for apprenticeships? Where’s the "greenprint" for a revived and renovated New Zealand economy? The push for a more creative approach to marrying infrastructure development with export growth? Where’s the incentive for this country’s employers to come up with a better way of securing their profits than simply slashing the real wages of their workers?
The truth is, this Government lacks the imagination to answer any of those questions. Consequently, Bill English’s Budget can be distilled into four words: "Nobody moves, nobody gets hurt."
Still, he’s bought his boss some time – and his boss knows it.
Watching poor Phil Goff perspiring manfully at full volume, and then watching Key, relaxed and informal, cracking jokes, and beaming reassurance to the voters at full wattage: it was painful. When the networks’ news editors are through repackaging this afternoon’s verbal jousting for the 6 O’clock News, New Zealanders will be in no doubt as to which leader remained in the saddle.
Sufficient unto the day is the evil thereof – you might say. But, the question that will be gnawing away at Key and English in the dark watches of the next 365 nights is as inescapable as it is terrifying:
What the hell do we do next?
