What was I expecting from the budget? Not much - this being a boring year where the money had already been spent - but perhaps a modest increase in official development assistance, and maybe some action on carbon payments to forest owners or tighter regulation of vehicle imports as part of the rework of climate change policy. What I got was no real increase in ODA (it will move from 0.27% of GDP to 0.28%. Big deal), and $100 million in contingency funding for biofuels and climate change policy. The latter sounds good (though I'm still scrabbling for details on how it is to be spent), but the former is very disappointing. The UN benchmark for foreign aid is 0.7% of GDP. Not only is the government not even coming close - its not even coming close to its own self-determined (and incredibly lax) benchmark of 0.35%. So much for keeping their promises.
I expected the government to spend on roads - but I didn't expect quite so much. The extra money can only be described as a major investment, though unfortunately its almost all going on roads rather than giving Auckland the rail network it deserves. There's an interesting graph in the Treasury documents which is quite revealing about the trends in spending in this area over the past decade:
So, National funded roads at about 0.8% of GDP during the 90's, whereas Labour has already seen it rise to 1.0% of GDP, and is planning to increase it to 1.3%. In nominal terms, the increase is even more impressive. And yet, National continues to bang the drum about roading and imply that Labour has not spent enough. I think their past performance in this area gives the lie to their argument and shows which party really invests in rather than running down our infrastructure.
For those still banging on about surpluses without tax cuts, Cullen had some interesting titbits in his preamble about where that money came from. $2.5 billion of it was due to windfall returns from Crown Financial Institutions - the Cullen Fund, EQC and the Government Superannuation Fund. They're part of the crown, and so their profits naturally go on the government books and improve its net financial position - but it can't (or rather, shouldn't) be spent on anything other than the purpose it was invested for. Once, the National Party understood this - but now they seem to be in the same camp as people who react to an unrealised increase in the value of their super scheme (and one which could disappear, to boot) by splurging on a sports car. There's only one word to describe such people: fools. And I'm very glad they're not running the country at the moment.