I hope this newsletter finds you well.
Even a huge $50 million budget has its winners and losers. Here are those of the 2020 Budget:
Workers – The Government has released billions of dollars in spending to keep unemployment lower than it may otherwise be. Having already paid out $10 billion in wage subsides an extension costing another $3.2 billion was approved in the Budget. There’s potential unemployment may rise to 9.6 per cent, equating to 263,000 unemployed people.
Health – Troubled DHB’s have been given $3.9 billion, and have received funding to handle the backlog of surgeries lockdown produced. However, my local DHB tells me there is no detail (sound familiar?) on how much of the funding can be used to pay down debt.
Public housing – The building of 8000 new state homes, 6000 public houses and 2000 transitional houses, was announced in the Budget. Despite this, right now more than 15,000 households are on the waiting list for a state home, and, excluding transitional homes, 12,400 state homes in the five-year pipeline.
Education – A boost for early childhood education was announced by the Government before the Budget was released. The Budget includes a $1.6 billion trades and apprenticeships package, seeing the ability to retrain as a key aspect to getting through the Covid-19 crisis. The package funds more tertiary enrolments and includes funding to make vocational training courses free to all, rather than school leavers exclusively. Of interest to me was 1000 more places in Trades Academies – one of the best programs I introduced as Education Minister so youngsters could start their trades training while still at school.
Politics – The Government is keeping 20 billion pork barrel dollars until the election – watch out for their announcements through the campaign!
Debt – For the Government, saving the economy will come at the cost of borrowing hundreds of billions of dollars. Sitting around $60 billion at the beginning of the crisis, by the end net debt will rise to $200 billion.
Climate change – Although $1.1 billion was designated to so-called “Green jobs” and boosts to rail and home insulation, climate change is not a big winner in this Budget. With the Auckland light rail plan on hold until after the election at least, Government infrastructure has tended mostly toward roads recently. Serious low-carbon infrastructure is still missing, such as solar panels or a better way to move clean energy from down south further north. There’s nothing in the budget that builds New Zealand toward a new sustainable vision with diversified markets.
Beneficiaries – The Government pointed out the $25 weekly boost to benefits announced in March, but critics say an already strained safety net won’t be adequate as thousands of New Zealanders lose jobs. The Children’s Commissioner says the Government need to spend the $20 billion in their back pocket to fend off an increase in child poverty.
I was very disappointed with two small items missing from the budget.
Firstly $2 million to Whakatane District Council to compensate for extra costs due to Edgecumbe floods and the Whakaari tragedy. The previous National Government had promised the Whakatane District Council we would reimburse them for the urgent clean-up costs after the floods, but this current lot have refused that! With all the billions sloshing around they could have been a bit more generous!
The second one is Cochlear Ear implants. This has been raised with me over the years by my favourite cricketer, Lance Cairns, now a Gisborne resident. His life was changed overnight he says, and it’s the same for too many people slowly going deaf. National had put extra money into clearing much of the waiting list - Labour cut this in last year’s budget and it looks like it hasn’t been reinstated. Sorry, Lance.
The National Party now has a new leader, Todd Muller and Deputy Nikki Kaye. As we go to print the new line up is being finalised and some new and old faces will present a strong team to face the 2020 election almost confirmed for September 19th. This is my 5th leadership change, all faced challenges, and all carry their dramas, winners and losers. Our thanks are with the outgoing team for all their hard and largely thankless work, as our loyalty swings in behind our new Leader, Todd Muller. He’s a good Bay of Plenty man with a good business background, he has a thorough understanding of the primary sector and the massive role a region like ours will play in the post-covid recovery.
I hope you are enjoying reconnecting with friends and family and are settling in to this new ‘normal’. Stay safe and healthy and continue to play it safe.