Election 2020: the real budget hole nobody talks about

OPINION: There’s really nothing like an alternate budget season. I will not deny that I speak from the perspective of a tunnel vision of a politico-fiscal tragic, but alternative budgets are really the ones that are put in place when it comes to elections.

It is the clearest and clearest image we have of an alternative vision of the country.

Numbers can be spun, they can even be wrong (as Paul Goldsmith has discovered), but correct numbers rarely lie.

Take, for example, the Labor budget bill from the last election. It is a decent document that outlines what the ruling party would like to do.

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Looking back at the document three years later, it gives a decent picture of the government that Labor wanted to be. It shows us what the party wanted to do. Labor were lucky to win.

There are big increases in spending for things like the family package and health, but the overall size of the state is roughly the same as what New Zealanders were used to.

Labor’s now-forgotten Budgetary Responsibility Rules put a 30 percent cap on how much the government would tax and spend during that first term.

In other words, Labor wanted a budget more focused on transferring wealth to the poor, but nothing radical.

Three years later, that is more or less the government we have had.

In the last week, ACT and National presented alternative budgets. These are meant to give voters a contrast to the government budget, which is what Labor bases its own plan on.

The Greens have adopted a different strategy. They do not present an alternative budget; instead, they are running six major policy announcements, each at an individual cost.

These should be priorities for any post-election negotiation and anyone who wants to can imagine trading them on or off the Labor plan, depending on how the chips fall.

Reading an alternative budget is an art and political observers must be clear about its purpose.

We want alternative budgets to show that the parties are thinking about the long-term impact of their policies; It’s not about pulling out the calculator in 2034 and yelling “I told you so” to future Finance Minister Goldsmith, it’s about making sure “i” s are dotted, “t” s are crossed, and the long-term implications have been thought out. carefully.

National is licking his wounds for failing well and truly in the rigor test.

After repeatedly saying that it would wait until the Treasury’s Pre-Election Fiscal and Economic Update (PREFU) before publishing its alternative budget, the party decided it could not be bothered to use the document to update its final budget figures.

It is a shameful mistake. No one really cares if National has lost $ 4 billion over a decade (predicting that in the far future is a fool’s game anyway), but it does matter that the game was not rigorous about its costs.

In the same way, do we really care that the Labor families package shows up in their alternative budget as a $ 5 billion plan, but revised down to $ 5.5 billion when the party took over the Treasury banks?

But even more important than rigor, alternative budgets give us the most complete picture of what kind of government the parties would like to run.

A long list of interesting partisan politics is one thing, but what you really want is a bird’s-eye view of what kind of government our political parties want to run. Separate reality from rhetoric.

The real question National must answer is whether its budget supports the rhetoric of its leader Judith Collins that the budget will not carry a torch to public services. Collins has promised to increase spending on healthcare every year, for example.

The budget supports this. Each year, National promises to increase daily spending again, but those spending increases aren’t big.

The current government promises to spend between $ 2.4 billion and $ 2.6 billion in new daily spending on services each year. National wants to cut this to $ 1.5 billion a year, a savings of $ 50 billion over the decade.

Technically, National is right: There will be spending increases every year, but those increases are unlikely to come close to what is needed to cover lingering funding pressures in areas like healthcare. Only our DHBs needed a recharge of almost $ 1 billion this year, the costs started to increase.

That means that while spending may not go down, services could, as new spending can’t keep up with rising costs.

It is an important point.

In the same way that Labor’s 2017 alternative budget fell far short of the transformative rhetoric of its leader, Jacinda Ardern, National’s alternative budget does not calm fears about austerity.

The funding increases are there, but unlikely to be enough to meet the demands of an aging and growing population.

What the budget is really about is an impressive investment in capital infrastructure. New roads, schools and possibly hospitals.

All of this is laudable and is usefully financed by loans, spreading the cost over many years. Where the savings have been found is on the day-to-day side: operating expense.

That opens up the fear that a national government may build buildings that it cannot staff. It is a question that the party must answer as the campaign progresses.