Budget 2014: Same-Same and the Overton Boogaloo

Budget 2014 has dropped and it has delivered few surprises. Writes the imminently sensible Keith Ng at PublicAddress

Ultimately, I think this budget is fine, and National really is doing a reasonable job of managing the finances. I expressed doubts a few budgets ago them pushing the cuts to future governments, but here we are, they’ve actually worn the worst of the cuts.

While the sobriquet “rock star” must surely be beginning to piss-off the chaps on the Treasury benches, there is no doubt that our country is in a relatively stable position. The structural problems left over from Clark are still unsolved (superannuation, balance of payments, housing inflation), but in large part we’re looking pretty fit compared to much of the moribund OECD.

Sure, it still sucks to be poor, and rich people accumulating wealth via capital gains are still untaxed. Our rivers are still toxic, and climate change has the potential to claim us all. Sure. But we could be a fair bit worse off.

If anything the performance of NZ post-GFC is testament to the sobriety Micheal Cullen exhibited to repeatedly bank mammoth surpluses to reduce debt. Our current health also reinforces how reckless the position was of Brash-era National – crying for big tax cuts in a red-hot inflationary economy, while calling for Government to increase debt to fund infrastructure. Had New Zealand followed Brash post-2005, it’s easy to see that we would be a lot poorer off right now.

What is most interesting for me however, are the two key social policies rolled out by the Government. Free healthcare for under children under 13 and a four week extension to paid parental leave. This is the type of shameless and overt social interventionism that would surely have been opposed by prior National caucuses. I can only imagine the howls of anguished rage coming from Jamie Whyte when he discovered that sick children would be further insulated from the fiscal consequences of their choice to fall ill.

This type of expensive social policy is exactly the sort of thing that used to be called “communism by stealth” (John Key 2005), moderated slightly to a “dead rat” that had to be swallowed (Bill English 2009), and now in 2014 the same men in charge of the National Government are proudly announcing headline policies to the left of those that Clark achieved.

So while much may be same-same in Budget 2014 it is clear that the New Zealand version of the Overton window has shifted – resolutely.


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