I am still reeling from the numbers in the “Rebuilding Together” budget. It reminds me of Hillary Clinton‘s campaign slogan in 2016, and we all know how that ended up. All I can do is hope fervently that this government ends up the same way – on the scrapheap, with voters being smart enough to see through the lies, the gaps and the risks to our economy, our lives and our future with this reckless, haphazard budget.
Let me remind everyone that this time last year, we had a budget surplus of $7.4 billion. Now we are forecasting a deficit of $28 billion. What a turnaound in 12 short months. Treasury is predicting a decade of deficits. If our government does not stop spending like drunken sailors, our credit rating will be downgraded, and all this debt will become mightily expensive. We all said this would be a big spending government, but nobody in their wildest dreams imagined, just 3 short years ago, how much this government would cost us. Yes, we have a pandemic. If we hadn’t been locked down for so long, with so few cases, we would never have had to borrow like this. Now government debt is set to blow out to 50% of GDP, when its previous ‘budget responsibility’ rules required public debt to be less than 25% of GDP. Good grief. We really are turning into Venezuela. Or Zimbabwe.
When selecting the relevant category for this article, I almost selected ‘crime’. Maybe it should be counted as a crime story. It certainly feels like one.
Let’s look a little closer at some of this rank stupidity.
$4 billion business support package, consisting mainly of a $3.2 billion extension to the Wage Subsidy Scheme. The rules around the scheme have been tightened, with qualifying businesses required to show a 50% fall in revenue for at least one month, so I don’t disagree with this in principle, but I am now concerned that we will be supporting people for a further eight weeks in jobs that are going to be lost anyway. Maybe not; time will tell, but the remaining $600 million for business support is not much.
$3 billion in infrastructure investment, including 8,000 new state homes. Yes. If the word, Kiwibuild is running through your mind, you are not alone. They have already proved they have no idea how to build houses. While I agree that the government should be building state houses and leave the private housing market to its own devices, their record here is woeful.
$1.6 billion for trades and apprenticeship training. Again, I do not disagree in principle, but let’s think about how we are going to do this. Are we going to train baristas to be chippies? Tour guides to be plumbers? My wildest guess would be – no. So where are all these people going to come from? From a targeted immigration policy, of course. But the borders will be closed for the foreseeable future. So, we are back to training baristas to be chippies, because I cannot see any other way that this extra funding for training is going to be used. But we are going to have to train baristas to swing a hammer, like it or not, because who else is going to build the 8,000 new state houses?
Unemployment is still expected to increase to 9.8% by September, so as we can see, most of this money is simply falling into a very big black hole.
$1.1 billion for ‘environmental jobs’. Yes, a nice-to-have, but these jobs do not produce anything, and so will have to be forever funded by the public sector. If we were still running surpluses, then I guess this would be fair enough, but it is a monstrous waste of money at a time like this.
The School Lunches programme is to be extended, to cover 200,000 more children, at a cost of $220 million. This is another nice-to-have. It is expected to create another 2,000 jobs, but these will all be part-time roles, and again, it will be funded entirely by the state. In addition. food banks will get an extra $79 million (I always thought food banks relied on donations), community groups will get another $46 million, family violence $22 million, and a student hardship fund will be set up with $20 million. More money that will never produce anything of value.
Let us not forget $70 million to the racing industry. Another nice-to-have that we really cannot afford.
We are not ‘rebuilding together’. The government has largely ignored the private sector, opting instead to create a lot of jobs that it will have to fund forever. Thousands of people will now be in jobs that produce nothing, that provide little of benefit to the country as a whole, and the government is borrowing like there is no tomorrow to do it. This is a socialist utopia. This is only the first stage of rebuilding the perfect socialist state, however. The next stage, which will follow as night follows day, will be tax increases.
This budget should be renamed “Borrowing Forever”… because that is what this government intends to do.
God, I miss John Key and Bill English. Come back, guys. Nothing needs to be forgiven.