On budget, Oram and weekend reading

by Jake Quinn

In a Queen’s birthday weekend marked by horrific weather and an even worse road toll there was plenty of light reading on offer.

Rod Oram slammed Bill English’s 09 Budget because he failed to transform the New Zealand economy. Oram said English blew his only chance to radically reshape government finances. Govt minus a point.

From weekend paper reading and discussion three conclusions have been drawn:

1) That the average Joe is ambivalent about this year’s budget and sees cancellation of tax cuts and general tightening of departmental belts as prudent and necessary. Govt gets a point.

2) That stopping contributions to the Superfund seemed like a plausible idea for about two minutes, that is – until someone did the numbers pointing out how much money it will actually COST (not save) us. Govt minus a point.

3) That the budget seemingly froze time in a economic recovery sense. That is, there was no plan (beside avoiding a credit downgrade) to get us out of trouble, nothing at all.

Unless you count the national cycleway that has since been downgraded to a series of regional cycleways that might be linked, but not by the Auckland Harbour Bridge. Note: anyone who counts the cycleway should see a doctor.

The theory (for not doing anything in the budget to assist NZ’s recovery) must be that it was the international economy that got us into this mess and if we are to get out of it, it will be the international economy that saves us. Gosh don’t we all feel safe in that knowledge. Govt minus 2 more points. 

What would have been a good idea to introduce, paid for – perhaps – by not lowering the top rate of tax from 39 to 38%, was a significant Research and Development tax credit.

This would have attracted international talent and investment to New Zealand companies and products, ahead of our rivals, fast tracking us back towards growth and having us come out of the recession ahead of the pack. Pity no one thought of it.