OPPOSITION parties are mocking New Zealand’s budget and accusing the government of doing nothing to stem the exodus of skilled workers to Australia.
On Thursday Finance Minister Bill English announced a second consecutive zero budget, which has been described as cautious and fiscally neutral.
It balances $NZ4.4 billion of new spending by saving $3b and raising $1.4b in new revenue.
It has a deficit of $8.4 billion next year, lower than had been expected.
English says the books will balance in 2014/15 with a small $197 million surplus.
Tax loopholes are being closed that allowed people to deduct costs for holiday homes, boats and planes.
Farmers are going to be denied “unintended tax breaks” by changes to livestock valuation rules.
Nearly all the new spending has been previously announced, with one new item being $385m for research, science and innovation.
“This truly is a zero budget – zero growth, zero hope and zero aspiration,” Labour leader David Shearer told parliament.
“They promised a brighter future. What we’ve got is a departure lounge budget – the worst growth in 50 years, more than 50,000 Kiwis fleeing to Australia and a 50 per cent increase in unemployment.”
Greens co-leader Russel Norman says the budget does not deliver any of the fundamental economic changes the country needs.
“The government is more focused on political management than economic management,” he says.
“The budget is a failure for the economy and a failure for our people.”
NZ First leader Winston Peters is describing it as a back-to-the-future budget.
“It’s mean-spirited, nasty, and the government is caught in a time warp,” he says.
“This is the work of a fiscal fiend. It will see New Zealand slide backwards at an alarming rate as jobs disappear along with our manufacturing and exporting base.”
Mana Party leader Hone Harawira sees the budget as a redistribution of wealth to the rich.
“It zeros in on the poor and the dispossessed. There are 500,000 people in this country living on the minimum wage,” he says.
The Council of Trade Unions (CTU) says the government is following the same failed logic that is being rejected in Europe.
“This budget poses a real risk of sending us back into recession,” says CTU economist Bill Rosenberg.
“The forecasts include falling export income … you just can’t have austerity and growth at the same time.”
The business sector considers the budget responsible and positive.
“New Zealand business increasingly finds competitiveness is dependent on innovation, and funding announced for science and innovation initiatives will be well received,” said Business NZ chief executive Phil O’Reilly.
“Despite being presented as a zero budget, this year’s spending has been well focused on areas helpful for future growth.”