Hard News by Russell Brown

Budget Blog: Short Version

First, the government is now officially planning on a mid-September election. Second, this ought to be clear by now: Michael Cullen does not see tax relief as an end in itself, but as an overall policy instrument. I'm surprised and a little disappointed that the bracket adjustment won't happen until 2008, but pleased that they will now be CPI-indexed. At first glance, the tax relief for business looks pretty good for my small businesses, and - subject to accountant's confirmation - more immediately useful than a cut in the headline tax rate.

Cullen has now probably completed the inscription of his legacy as a Treasurer prepared to forgo short-term gain in favour of a long-term vision, and he deserves great credit for that. By the same token, I thought the weirdest part of Don Brash's speech in reply was when he banged on about an improved savings performance having no link to faster economic growth.

Well, no. But Brash cited the United States of an example of an economy with a poor national savings record and robust GDP growth, and Japan and Switzerland as examples of countries with strong national savings and slow growth. I'm not sure if that was wise. The key threat faced by the US results directly from that poor savings record, in combination with huge fiscal deficits and a cohort marching towards retirement. Foreign investors have that economy by the bollocks. Were they to pull the plug, the consequences would be appalling.

So what robust national savings offer is security, and I think that's what Cullen has been pursuing all along. The Superannuation Fund is simply a means of compulsory national saving, and the KiwiSave scheme announced in Budget 2005 is barely less obligatory (although anyone can opt out).

I agree with Chris Trotter that the ability to draw on KiwiSave funds for a first home deposit - and get a subsidy of up to $5000from the government - will appeal strongly to the Labour base, and older voters in particular. It's the contemporary equivalent of being able to capitalise the family benefit.

I'm pleased to see a billion dollars more on health, and the Digital Strategy (which really does make the right noises) given a decent budget, and to see special education funding lifted again. I realise special ed will always be a bottomless bucket, but I'm aware that it was an accident of timing that leaves our family quite well served - the best time to be eligible for any new funding is when it's announced - and I'm glad to see more people get the help they need.

I'll be interested to see where John Key finds the fat to deliver an alternative budget encompassing all National's spending promises and its tax cuts. I'm also mindful of Colin James' theories about a generational resistance to nanny-statism, which I think will come to bite Labour in 2008 (yes, I think they'll win this year). The government so often accused of being anti-family will start to look unreasonably biased towards them. But by then Cullen's long-term initiatives will be irrevocable. And even the most feckless young Tories will eventually be grateful for them.

Scoop's Budget page has the full drama.

PS: A couple of people who successfully RSVPd for The Great Blend tomorrow night have asked whether they should have received confirmation emails. No: if the system let you RSVP, you're in. Please try and be early: doors at 8pm, opening remarks at 8.30pm. There'll be time for having it large later on …

PPS: Go see Radar's Timor ODDessy at the Silo Theatre, last night Saturday. I found the documentary-with-live-commentary experience most pleasing. Information and tickets here.

PPPS: One more reader comment on the David Benson Pope business, on the basis that it comes from someone who was there:

There's a dirty part of me that is kind of satisfied seeing an old teacher reduced to tears. I remember that rule crazy fucker walking around assembly almost willing (from the look on his face) that some poor soul had their shirt hanging out so he could get the excuse to drill the little scrote in front of a couple a hundred kids.

He seemed to love that power and I hated him for it...but I'm older now if not slightly wiser in a vague type of way and realise that this use of discipline kept hundreds of kids in line who, like me, didn't want to be there. If he didn't fulfil this role one of his teacher buddies would have got the portfolio of 'discipline dude', which is what BP did when I was there.

Begrudging as I am to acknowledge it, BP's classes had none of the usual bullshit of dealing with assholes who wouldn't shut up and he got some good teaching done. If, retrospectively, I use this bone idle brain of mine (yes I need a new job) I could probably come up with a good handful of teachers who 'crossed the line' in acceptable teacher behaviour especially when I apply today's rules to the bad old days.

I can't however come up with many ex-teachers who would make a good associate minister of education. This man takes no shit (except for now it appears), is extremely competent and, it is my opinion, that he worked his education portfolio in order to improve the education system for all its users. Even a (relatively deviant) ex-student of who didn't like BP can see this. I know its naive thinking but I'd rather trial the bastard on how good a minister he can be instead of how he treated a few kids 20 years ago.