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Mike's Minute: The BS Budget - this Govt's blown it already

Author
Mike Hosking,
Section
Video,
Publish Date
Monday, 27 May 2019, 7:27AM

COMMENT:

Welcome to Budget week - a week already upended, to a degree, by the abject failure of this Government to stick to its word on fiscal discipline.

If they had one overarching issue facing their possible ascendancy to the halls of power 18 months ago, it was the broad-based fear that left-leaning governments don't know how to run an economy, and they love to spend other people's money.

To their credit, since of course abandoned, they outlined their intention to reduce debt to 20 per cent of GDP. It was a general intention set out by the previous government.

The whole point of an economy is fiscal success. The whole idea is to run the thing at a surplus, and retire debt. The whole point is after you do that consistently, you can look at giving back some of the money you took from the punter in the first place.

Twenty per cent is a very good, internationally recognised and respectably conservative figure. And even though they cancelled the scheduled tax cuts of National, they insisted that there would still be surpluses, and they would still look to reduce debt.

Well, that dream's over post 2021. And once again I ask myself, was it because they knew they were going to do this all along? Or did they simply find themselves out of their depth and have been forced into it?

And when I say "forced into it", it won't be as though they've dragged themselves kicking and screaming to the decision. This lot are taxers and spenders. The fuel tax, the GST on roaming, the capital gains tax attempt, are all the proof you need to know what their overarching intentions are. And do not rule out before next year another attempt to re-rig the tax structure to capture yet more money from high income earners.

Meanwhile they are trying their best to pretend that abandoning the 20 per cent target, and replacing it for a range, is anything other than a spend up and a launch in to the world of debt and borrowing.

The range at 15 to 25 per cent is nothing of the sort. In reality, it's an increase from 20 to 25 per cent. It will never be 15 per cent, or anything close to it. Can they afford it? Yes. Do other have much higher debt levels? Of course.

But that's not the point. If all you ever aspire to is to not be as bad as the worst example you can find, you're not aspiring to much, are you?

They're calling this Thursday a "Wellbeing Budget," as though that actually means anything.

What this Government does do well is spin BS. All budgets are 'wellbeing budgets', given they involve handing out money to people, and when you get money your wellbeing proportionately rises.

In the noise and hype and headlines of this week, never forget the simple truth that they've spent all the money, the economy is slowing, and so they've broken their promise to be responsible.

They've reverted to type . They don't know how, and even if they do, they now refuse to run an economy within its means.

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