It matters how budgets are funded . In this year’s Budget, more than half of the savings used to fund new spending have come from the prospective pay equity claims of low-paid workers. Most of them are women. The changes to the pay equity legislation were retrospective, so they threw out claims that were already being considered. They caught everyone by surprise. And they were passed under urgency. It was unseemly. It was unfair. And it was bad economics.  Once you’ve crashed the economy, it’s foolish to make it worse by cutting government spending to the bone.

The pay equity changes are  a cheap trick. They’ve enabled the Government to once again kick the can down the road and avoid any change to taxation to broaden the tax base. In New Zealand, too much of the tax burden rests on the shoulders of workers.  Unlike most rich countries, we don’t tax unearned capital gains on residential property. But we should. The newly announced Investment Boost is therefore a half measure. . Encouraging firms to invest in their business and the country is an excellent idea. Accelerated depreciation is a simple way to encourage it, although targeting higher productivity activities would have been sensible. 

But until we fix the imbalanced treatment of capital gains, the housing market is going to keep sucking the life out of the rest of the economy.

The Budget was a mixed bag in terms of increasing housing supply. Extra debt and equity funding for Community Housing Providers is exactly what’s needed - but it’s a drop in the bucket. And it’s been accompanied by cuts to funding for iwi housing. We need everyone building as fast as they can. Similarly, letting people more build granny flats on their quarter acre sections is nice -  but why aren’t we letting them loose to build townhouses, terraces, or apartments?

The rest of the Government’s vision for growth seems to amount to increasing the subsidies for big overseas movie studios to make films here and getting the New Zealand people embroiled in the gas exploration business. Neither of these will deliver long-term, sustainable growth. Shane Jones’ $200 million apology letter to the oil and gas industry is especially pernicious, given the long term environmental harms it promises.

The Government announced some feeble changes to Kiwisaver. Increased contribution rates and extension to 16 and 17 year olds are great, but we need more. Why not give advance warning that even higher employer and employee contributions will be phased in? And what about the increasing numbers of us working past the age of 65? The cuts to government contributions are shortsighted, and will hurt the young and people on low incomes. 

This is a bit of a theme in this Budget.  Further fiddling will reduce Best Start payments to young families and slightly accelerate student loan repayments. Of course, homeowners over 65 get a little tweak to give them enhanced access to the rates rebate scheme. Timid changes and tweaks around the edges. What we need is bold, clear-sighted action – and to protect the vulnerable.

The Opportunities Party's Approach:

Addressing New Zealand’s social, economic, and environmental challenges requires much more than the half measures included in this Budget.  We would do it fairly and equitably, not by taking money from the poor and the young. Most importantly, we know that New Zealand can only meet our fiscal challenges by broadening the tax base to properly cover capital gains on land with a land value tax. 

Restructuring our tax system around a UBI will drastically reduce government administration costs while ensuring no one goes without. 

The Opportunities Party (TOP) also advocates for real solutions to housing market obsession. The land value tax will help on the demand side, but we will also unlock zoning rules to enable our cities to build up, not out. 

The Government has it right on one point. We need  longterm growth. Achieving it will take sustained investment over decades to address our infrastructure deficit and create the conditions for business to thrive. It’s also going to mean finding smarter ways to support highly productive local businesses. 

Because Kiwis deserve better.