“A boring budget? Responsible, but unimaginative…..misses vital element?” The variety of responses to Michael Cullen’s
first balancing of the books were often more interesting than the actual budget itself. A Week of it's Chris Holm writes
on the budget reaction.
However much they were due to get, none of the groups affected by the Government’s spending plans seemed overly pleased
at the pressies they were getting. Groups from the right to the left played spot the negative, qualifying every “good”
with a “but…”. Faint praise, considering the popular verdict - that the budget was the most generous we’ve had for a
number of years.
Businesses, at the height of their campaign to rid the country of the Employment Relations Act and ACC rules, gave the
centre-left budget their coldest shoulder.
“Responsible” was the most positive adjective the Employers and Manufacturers Federation could muster about the fact
that Cullen had left the budget 780 million in surplus. Even then, they qualified this with “unimaginative”.
Though they were the recipients the first R handouts for at least the last ten years, the Manufacturers Federation grumped about the fact that their breaks were
not tax breaks. It was all and good to help low income New Zealanders, as long as you helped businesses first.
“This is another Budget that has focussed on delivering social, cultural and other outcomes without any apparent
recognition that you first need sustained economic growth to pay for them”, intoned David Moloney, the Chief Executive
of the New Zealand Manufacturers Federation, in his release.
And while the Employers Federation grudgingly thanked the government for a revamp of apprenticeship programmes –
something they have been pushing for years – their general outlook on economic growth also remained negative.
“No doubt the Government has the intention of facilitating economic growth, but it is unlikely that this Budget's
numerous widely-spread projects will achieve that objective," said the Federation policy manager John Pask.
Just in case you didn’t know why they were angry, it continued.
"It is clear that the costs of other policies such as re-unionising the workplace and re-nationalising ACC have not been
taken into account…"
Asked about the glum response from businesses, Michael Cullen took it on the chin by suggesting the Government had
“oversold” the budget to businesses.
But judging from the above quote it seems highly unlikely that anything - bar a complete policy turnaround - would make
Should he worry? Yes and No.
National quickly gave up on trying to pacify their bugbears - the unemployed and other health, welfare and green groups,
and it ended up costing them the last election. The public thought, they were heartless and aloof and National ended up
paying for it.
On the other hand, it is important to note that however unpopular they were National did hold on to power for ten years
before that…. Of course, business advocates, unlike their leftwing counterparts are not so easy to kick around.
Right now Labour seems intent on pleasing everyone, while everyone seems intent on not seeming too pleased. “Seeming” is the essential word here.
How angry are businesses really? And how worried, really, is the Government? With politics and all its ritualised
fighting it’s hard to know.
One thing is relatively sure - the intense negative business reaction to the Government’s proposed legislation did seem
to take Clark and company by surprise. To give Labour credit, it’s been a long while since businesses has something to
complain about. Coupled with the fact that the opposition don’t often seem to be firing on all cylinders (anyone who
heard Wyatt Creech’s post-budget rebbuttal speech will know what I mean), it is understandable that Labour did seem a
But the main reason that the business lobby has been so effective is its stealth. Rather than picketing, madly waving
protest signs, and throwing themselves under cars, businesses have protested more subtly – opinion polls, overseas
experts, and growth figures - have all been used to show the current economic medicine is not working.
“Facts”, like the ANZ survey’s of business confidence, have become political sticks with which to beat the centre left.
With only the occasional military coup to divert their attention the media has also got in on the act. Meanwhile, ACT
and National have had to do very little.
In response to this orchestrated campaign of grumpiness the Government has “seemed” recently to eschew it’s earlier -
firm stand - the “it’s the people’s mandate!” cry, for a more softly-softly approach involving much smiling and nodding
and then not doing very much.
Its about all they can do - to give in to business demands would be suicide. Apart from causing a split within the
coalition, they would alienate the large number of ordinary New Zealanders who support them.
Of course, it would probably help the Government if their supporters were more forthcoming in their praise – especially
when it’s budget time.
But many groups inside Labour’s traditional support base – the unemployed, students and health care professionals to
name a few - played hard-to-get when the package was announced on Thursday.
“Vital point missed” trumpeted the UNITE, the unemployed workers collective – the point was benefits could have
increased. Throughout left allied groups, most welcoming notes were “cautious”, with some like state house tenant
organisations, have been conspicuously absent in making any comment at all.
It’s all enough to leave the average kiwi wondering whether the Government has done anything right?