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Deputy Prime Minister Bill English - Source: ONE News -
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At the core of centre-right politics is the belief that a small government is better for the economy than a large one.
So it should be no surprise that for the last two years the National government has been quietly focused on cutting and trimming back the public sector in New Zealand.
There have been mergers of departments, caps on spending, and a general mantra to officials of: 'You must do more for less money'.
Most of the cutback programme has been pretty dull stuff so far and has largely flown under the radar of the public.
However this week National's cutback push entered a new phase, one which has far more potential to upset some voters.
Scissors out
Essentially the Finance Minister Bill English acknowledged in a speech this week that the 'low hanging fruit' or easy cuts to the public service were now done.
From here it gets harder. Apparently as a country we need to start choosing between so-called quote "nice to have" spending and spending "that is a necessity".
And we are not talking small cuts either.
The government has now signalled it wants to find $800 million worth of savings by May when the next Budget is announced.
In fact in the space of about a year, the amount of new money allocated for spending in the Budget has gone from around $1 billion to effectively zero.
Deciding what spending is 'nice to have' and what is necessity is language many householders will be able to relate to in this time of austerity.
But it is of course a very subjective thing. I think for instance that Sky Sport is a necessity; my wife however might see it as a 'nice to have'.
So is government spending on the Film Commission necessary or nice? What about the orchestra? Sports funding or for that matter how about 34 brand new BMWs to cart ministers around the country?
English won't be drawn on what will or won't be cut in the Budget. He cites Budget secrecy.
However it's hard not to imagine that at least some frontline jobs and government services are going to have to get the chop or either be severely cut back.
Tinkering around the edges will not get you $800 million in savings.
Some sections of the community could be in for quite a shock come May.
Spending is, however, only one part of the equation when it comes to balancing the government's books.
The other is revenue and right now it's not looking great for the government either.
The New Zealand economy has not grown for the best part of a year and thanks to the devastating Christchurch quake, 2011 is also shaping up badly.
Business confidence has slumped hard in the first quarter; housing consents remain suppressed while tourism numbers are expected to slide.
All this is going to further dampen consumer confidence and put pressure on the government's tax take.
Added pressures
On top of this are the threats of further rising petrol prices and inflation.
Now voters understand that the quakes have had huge negative impact on confidence and our economy.
However not all of the poor performance of the economy can be blamed on those events.
National must bear some responsibility and theoretically it should be vulnerable to political attack.
The fact that it is not could be put down to a lack of bite coming from the opposition.
Right when it should be turning up the heat and riding a wave of unease about the health of the economy, Labour has hit the self destruct button and got the leadership wobbles.
As a result it will be all smiles in the Beehive this week,
although the wiser heads will realise that, even with a wounded
opposition, things could still get a lot tougher from here.
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Read more Corin Dann commentary here.
Add a Comment:
Post new commentAlmer said on 2011-08-06 @ 10:42 NZDT: Report abusive post
Not Helen Clarks anti-smacking bill. Try Sue Bradford
getsmart 99 said on 2011-04-02 @ 18:01 NZDT: Report abusive post
Hello , All this talk about cutting the budget . The National Government has sadi they will not touch Super but I wonder if they might means test it . Some people really depend on this when they get older . Continueing to work passed 65 is fine for those able . Maybe their earning could be taxed at a higher rate , while they collect their Super. Just a thought . I wonder if this might be something Bill has up his sleave > There are many way s to skin a cat.
hayleywhitz said on 2011-04-01 @ 19:12 NZDT: Report abusive post
This government is just so short sighted. They are only looking at quick fixes. They have no big picture thinking at all. It does not take a rocket scientist to figure out that investing in high quality early childhood education is an investment in the future of Aotearoa New Zealand. It should be seen as exactly what it is, an investment, rather than a cost! It is clear that this government is focused on helping the rich get richer and bugger collaboration and collective responsibility.
exporter said on 2011-04-01 @ 17:30 NZDT: Report abusive post
What's this doing in the business section? More lightweight coverage of business matters like the rest of New Zealand's media we really don't need. When are your reports going to address the issues facing the New Zealand economy?
nztifosi said on 2011-04-01 @ 16:37 NZDT: Report abusive post
As a teacher aide at a decile 3 school in Auckland, the future of New Zealand with another National Gov' budget is easy to imagine - more children coming to school with no shoes and no breakfast, while their teachers are told to get them up to the 'national standard' with no support. One idea though - perhaps the truancy officers can use the new BMW's to ferry children to school - great use of resources on the 'front line'!