OnPoint by Keith Ng

89

Budget 2013: Bringing Down the House (Prices), but not really

Update: Tool is live!

"On track to surplus"

That's not really true. Revenue projections are down on the 2012 Budget, and the Government would be in deficit - except they cut the Operating Allowance for Budget 2014 by $200m.

I had a crack at Bill English about this during the lock-up; his argument was that money is money - I might as well be saying that of *anything* that saved the government more than $75m, and claim that the government only did that because it would bring them over the threshold.

The difference with changing the Operating Allowance is that they don't have to make any decisions yet - it's just a promise to find some money next year. They really will need to find this money next year, so in that sense, it's quite legitimate. But it makes this "on track to surplus" claim really hollow. It's akin to saying "if I spend less next week, I'll have unspent money". It's true - it just doesn't mean anything.

NZSF

Resumption of contribution to the NZ Super Fund has been delayed, again. It's only a few years, but by Treasury's NZSF model, that matters a lot. By 2033, the NZSF would be $12b smaller (that translates to less money it's feeding back to the government), and about $4b less in tax revenue in the next 20 years.

Of course, that's offset by the decrease in debt and the cost of servicing that debt, and there're the old arguments about whether a dollar in the NZSF is as safe as a dollar less debt.

Student Loans

The Government is getting pretty aggressive about collecting debt from students overseas. Yeah, half the readers of Public Address - that's you, buddy.

  • "Fixed repayment obligations and higher repayment thresholds for overseas-based borrowers" (I think they mean lower thresholds though. I think.)
  • "[Extending] the child support border arrest system for the most non-compliant overseas-based borrowers"
  • "Ongoing information-sharing agreement between IRD and Internal Affairs to collect contact details from passport applications"

More details here.

It's a little horrifying in terms of its aggressiveness, but I also think it makes sense in a lot of ways. Aside from raising the amount of money which is collected, it'll also make it less attractive to try to flee your student loan debt, or to get into the situation where interest stacks up to the point where it becomes impossible for graduates to move back.

It's a big, hideous stick, but I guess good policy doesn't have to be all carrots.

Tertiary Education

  • "New funding" for engineering and science that are basically just inflation adjustments (2% increase), but not for other areas.
  • Signalling that Management, Commerce and Arts should GFYS: Other higher-cost subjects may see an increase in funding if necessary.
  • Private Training Establishments to receive same level of funding as public tertiary education institutions.

Bits and Bobs

  • $80m for new irrigation. Sounds like they're going to be building some dam.
  • New rules to make multinational corporations pay their "fair share" of taxes. But don't expect Google-windfall - it's is only expected to generate $20m over the next 3 years.
  • "Exploring options" or microfinance schemes (low-/no-interest loans) for beneficiaries. Would be great if they get this off the ground - will put predatory finance companies out of business.

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The interactive visualisation of the Budget is here. If you loaded it up prior to 14:00, remember to refresh your browsers so you're loading up the right one.

For best performance, use Chrome to view it.

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If you think this kind of blogging/data journalism is worthwhile, I'd really appreciate a few bucks on my Givealittle page. The money is nice, but more importantly, this is an experiment to see if reader-funded independent journalism can work in a small market like NZ.

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