Budget Day

It's Budget Day, and despite the pressure from the rich and the business community, they won't be getting tax cuts. Instead, the government's reported $9 billion surplus will be spent on schools, hospitals, roads, and the Cullen fund - invested for the benefit of all New Zealanders rather than just the few.

With a slowing economy and rising inflation, tax cuts would be madness now anyway, running the risk of pushing up interest rates while leaving the government severely out of pocket. They're already running cash deficits; the "surplus" is primarily due to investment being greater than depreciation, rather than a pot of cash lying around waiting to be spent. But the right has backed itself into an ideological corner of having to call for tax cuts no matter what, regardless of need, utility, or even whether they're actually able to pay for them. And so they trot out the same misleading arguments that the government is taking more off people (it isn't) and that we are being "overtaxed". But we're not, either by international standards, or by the only one that matters: whether taxation revenue is sufficient to meet the spending demands made by the electorate. And if anything, the latter suggests that we are being undertaxed...

The flip side of this of course is that the government has to actually deliver on those spending demands. And bluntly, we do not elect Labour governments to order that people be dumped off waiting lists and then blame DHBs or tell people to get private cover. While the past few years have done wonders for primary care and done a little to stem the haemorrhage of medical staff to higher paying jobs overseas, there's still the fundamental problem of resourcing. And the dirty secret behind hospital waiting lists is that they exist entirely because of deliberate central government underfunding. Every year the government "purchases" medical services from the DHBs: so many heart transplants, so many hip ops, so much for mental health etc - and the DHB administers how this money is spent. The waiting list is the difference between the amount the government purchases, and public demand (or rather, need - and I defy anyone to say that people with dodgy hips do not need them replaced, or people with kidney stones do not need them removed). Fixing this problem will require substantial long-term spending commitments and a lot of hard work, and this isn't the year for it (the money for this year's budget having already been promised for other things, like extra police, interest-free student loans, and Working For Families)- but if the government really wants to have an "investment budget", perhaps they should start seriously investing in our health system, rather than allowing the decay which began under National to continue.