National’s not alternative budget: Budget 2014

By Matt Nolan 16/05/2014


There is excellent commentary on the Budget here (Kiwiblog, Economics NZ) and really cool visualisations by Keith Ng here (his post here).  I suggest looking at those, it is much better than anything I can offer here.

However, I can’t help talking.  And looking through the budget documents I felt that something has been confirmed for me:  The National party has a stronger focus on social justice, equality of opportunity, and outcomes for the ‘worst off’ than either Labour or the Greens.  This came out here:

While the Labour and Greens alternative budgets were focused on industrial subsides (the “Green energy bank” is a form of industrial subsidy) – subsides that will benefit those who have the money to invest in the first place – National has come out with a budget focused on families/parenting, and a sixth budget that boosts real expenditure on education and health (at a time when the government was generally hesitant to spend).

Don’t get me wrong, Labour talk about poverty, but their policy solutions are … running a surplus, giving money to “winning” firms, and “magically” having lower unemployment for no given reason.  I had assumed that after they canned the tax-free threshold policy they were going to announce something – seems not.  Labour, the Greens, and National have all focused on the fact they are “responsible”, they are going to “run surpluses”, and they are going to “pay down debt” – and those statements are popular with the voters.  But I’ve only seen one party target education and vulnerable families with policy suggestions – the two biggest concerns regarding inequality of opportunity – and that has actually been National.

However don’t get me wrong – I think National is involved in some “industrial subsides” of their own here, with their continuing focus on irrigation schemes.  I struggle to see the free-rider problem here, and would also note that the lack of charging for water in many of these schemes is a huge concern.  Furthermore, I’m uncertain why the removal of tariffs on building materials is only temporary – it is a start at least ;)

But with regards to social policy, it is now undeniable that Treasury’s work on the ‘Living Standards Framework‘ (in association with MSD and Stats NZ of course) has had a significant impact on the National party, and the types of policy programmes they are putting through.  Now it isn’t clear whether it is National convincing the policy wonks, or the other way around, but this seems to be the sort of government that is in power.

This is just an interesting point – our centre-right party is currently more focused on social inequities than both of our centre-left parties.  I first realised this when Cunliffe took charge, and I said to Labour party supporters “why doesn’t he take on welfare/education instead of IT as his shadow portfolio, and focus on these outcomes” – they told me there was no votes in that, because people don’t really care and there wasn’t much need to do anything different to National.  If that is the case, I don’t know what the left is offering other than industrial subsides – and I find those abhorrent, and a direct affront to social policy issues.

This is unnatural to me.  I grew up in the 1990s, and had it ingrained in me that National was the party that reduced transfers to the most vulnerable, while Labour was the party who would go the other way.  It is an illustration of how changeable actual political parties are.

To quote NRT:

However, I wouldn’t really call this a Labour budget – this is the way National has been, within a version of the ‘capability framework‘, for some time now.

Of course, if you disagree with this type of redistribution (which is totally legitimate) this would be incredibly frustrating – the three major parties are determined to have a government of the current size.  In that case a strong ACT party would be a good foil to express your preference, if they only discussed policies sensibly …