Tuesday, May 17, 2011

Labour's alternative

I was unfair to Labour in my previous post. While I was writing it, David Cunliffe was giving a speech on Labour's budget priorities. Its a high-level framing exercise, but well worth a read.

Like the Greens, Cunliffe lays the blame for the government's current dire straits squarely at National's door. They've mismanaged the economy, standing by and waiting for the market to sort itself out while things got worse. And they've blown out the government's books with tax cuts to their rich mates, pushing us into a revenue crunch. Cunliffe is making a play for the title of "good economic managers" here, and based on Bill English's performance, it shouldn't be hard to get.

Cunliffe also lays out some high level ideas of what to expect from a Budget:

  • A good Budget would have to rebuild and reorient our economy towards exports and sustainable high-value production and employment;
  • A good Budget would rebuild savings and redirect investment to its most productive uses, not see it drain offshore or be wasted on property speculation;
  • A good Budget would lift living standards for all New Zealanders and not just a few, and would provide some urgent relief to the acute of living pressures being felt by many;
  • And a good Budget must reduce debt over the medium term to ensure that we are living within our fiscal means, which means being real about priorities and the need for everyone to pay their fair share...

He then goes through each of these points, expands on it so its clear what he's talking about, and gives some ideas on how Labour will achieve this. There's some concrete policy ideas in there, for example about monetary policy, but most of it is vague, high-level stuff. So for example there will be a "fair tax package", but there's no details on what that will involve, or what difference it may make to the government's books. This is unsatisfying to someone like me who likes policy specifics, but the signals are at least in the right direction.

Overall, its a strong critique of National's performance, which lays out what they should be doing. National, of course, is going to do the exact opposite, slashing living standards and reducing investment in our economy to protect the rich's tax cuts. And if it hurts badly enough, then Labour may just be in with a chance in November.