Hard News by Russell Brown

146

Yes we canny

Amid the clamouring punditry over the tax cuts, it's worth noting a few parts of yesterday's Budget that aren't up in headlines. Special education gets a desperately-needed boost with an additional $18.4 million over four years for students with high needs.

This warrants some explanation. There are only two funding categories for special needs students: "high needs" and "very high needs". What funding generally means is funding for teacher aides in the classroom, providing relief for teachers and help for the students concerned. Criteria have tightened as demand has outstripped resourcing in recent years, to the point where parents of kids who could really benefit from support can't get it. It's those people this will help. And not before time. I still think the whole area, especially as regards autism, needs a more substantial rethink.

Also, the New Zealand Music Industry Commission, which has existed (and been pretty useful) on year-by-year funding since 2000, gets $4.8 million in new baseline funding over four years. This is an arrival: the commission is being funded alongside the rest of the public culture establishment, if at a much more modest level. And it's well-deserved.

And, of course, there's the broadband … David Cunliffe has secured an additional $325 million over five years-- a much smaller sum than the number National has come up with, but one which will be distributed through an established, contestable process. Same strategy, a fair bit more money, in other words. As Ernie Newman points out, there's plenty of detail in the announcement.

Newman also pronounces himself disappointed. This isn't as novel or ambitious as National's grand plan. It's also much more realistic and far less vague. It works now, without an epochal reorganisation of the entire communications sector.

Which is better? InternetNZ is philosophical. And it has announced its plans for an independent assessment of the respect offerings, exploring which is the better fit for New Zealand. How wholly useful of InternetNZ.

And as for the headlines? I like Gordon Campbell's word: canny. He also notes:

Are there fish hooks in the economic data ? You bet. If National does win the election there is a nasty surprise flagged (p 39( near the end of Cullen’s speech. The out-year spending allowance has been lowered to $1.75 billion from Budget 2009, and as Cullen says ” this will be a hard target to meet, requiring re-prioritisation efforts.” You bet. In other words, if Cullen is being Santa Claus in 2008, he plans on reverting to skinflint Scrooge next year if re-elected - and if he isn’t re-elected, Key is probably going to have to cut public services to pay for this year’s largesse. By how much ? Well, that’s flagged on page 155 to the tune of half a billion dollars in each successive year to 2012. Very neat. National has been set up to be a one term government.

I can't help but think that Cullen could have delivered these structural changes to the tax system three years ago, in happier times. He's traversing the edge of responsibility doing it now, but the spoils, especially to families, are not to be sniffed at (for a party allegedly in the clammy grip of the gay mafia, Labour has been very bloody generous to the breeders in the past four years).

Will it restore to family budgets the cash that has flowed out in higher costs for food, energy and interest payments? No. And the idea that it is the government's duty to shelter people from every global economic trend with equivalent tax cuts -- so popular in the news media -- doesn't actually make sense. (Although it would be ironic if the tax cuts induced the Reserve Bank to maintain interest rates at the current high level for another six or 12 months.)

According to John Key, we may have to wait until only four weeks out from the election for a look at National's tax policy. In political terms, success for Labour will not be closing the poll gap, but squeezing it enough that National feels pressed to announce some policy (any policy) sooner than that.

PS: Feel free to take up the offer in the ads from our new buddies at Eden Coffee. We're hopeful that there'll be a bit of coffee to toss around to y'all this year.

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