'It's deeply disappointing': Why Budget 2019 didn't measure up for some

The Government's Wellbeing Budget has sparked a flood of negative reactions from a range of MPs, economists and the business community. 

National leader Simon Bridges has labelled it the "botched Budget". He said most New Zealanders will be "asking themselves what's in it for them". 

"Families want more money in their weekly budgets for food, petrol and rent. Instead, their taxes are going towards rail, the defence force and trees."

Bridges was referring to the Budget allocating $1.7 billion towards the purchasing of Boeing P-8A Poseidon Maritime Patrol Aircraft - a massive purchase that had already been announced in July last year. 

He was also pointing to the more than $1 billion in funding for the KiwiRail programme to support its redevelopment, with much of it going towards upgrading existing tracks and purchasing new Cook Strait ferries. 

But Deputy Prime Minister Winston Peters has defended the KiwiRail funding. He said it'll kick-start a "long overdue upgrade" of not only rail, but purchasing of two new Interislander ferries. 

KiwiRail CEO Greg Miller said: "More than a billion dollars over two years is an outstanding level of investment from the Government."

Commenting on the massive KiwiRail boost, National's finance spokesperson Amy Adams said: "No wonder job growth is going backwards and there are 13,000 more people on a benefit."

Finance Minister Grant Robertson.
Finance Minister Grant Robertson. Photo credit: File

Were teachers forgotten? 

Bridges also blasted the Government for not meeting the remuneration demands of teachers who took strike action on Wednesday. 

Schools will get $1.2 billion over 10 years to support school property investment, but Bridges said: "What good are classrooms if there are no teachers to work in them?"

ACT leader David Seymour applied similar criticism to the Government over teachers. He said it was "deeply disappointing" the Government hadn't increased its pay offer to teachers. 

"Teachers are the most important in-school influence on students but the Government refuses to pay them more because it has blown billions on Fees-Free and the Provincial Growth Fund."

The Government has allocated $49 million to help transform the forestry sector. Combined with existing funding, it equates to $58 million in Te Uru Rakau (Forestry New Zealand).

Post-Primary Teachers' Association (PPTA) president Jack Boyle echoed Seymour's sentiment, saying he wished the Government "had been braver" in its funding for education. 

"We recognise that the social deficits in health, education and welfare are the consequences of a long period of neglect before this Government took power. By not addressing them, the Government fails to be a transformative government."

National leader Simon Bridges and finance spokesperson Amy Adams.
National leader Simon Bridges and finance spokesperson Amy Adams. Photo credit: Newshub

National has already criticised the Government for not offering more to teachers, particularly after it announced the fees-free policy hadn't met initial forecasts. The leftover $197 million will be redirected towards vocational education.

But the Government's announcement that the $76.70 NCEA fee will be removed, and that internal assessments will make way for more exams, has received more cross-party support. 

In the Budget is also set aside $256.6 million in operational funding to provide a payment of $150 per student to decile 1-7 state and state-integrated schools that "agree not to request donations from parents".  

Is the Government really tackling poverty?

The Government has made a significant investment in families, with $1.9 billion to improve mental health services and a $1.1 billion investment in child poverty reduction.

Business Central CEO John Milford welcomed the large boost to New Zealand's mental health services, explaining how it's "important to employers and businesses". 

The Budget will also put $197 million towards tackling homelessness through Housing First. But Auckland Action Against Poverty said the Government "failed" to deliver for beneficiaries and public housing.  

Ricardo Menendez March, Auckland Action Against Poverty Coordinator, said: "The Government's Wellbeing Budget showed a lack of new initiatives to address rising poverty and inequality."

Ricardo Menendez.
Ricardo Menendez. Photo credit: The AM Show

He pointed to the legislative change which would index benefit levels to the average wage as the "key welfare announcement". 

But he said it was a "tokenistic move by Government that does not address the calls by the Welfare Expert Advisory Group for an urgent increase of core benefit levels of up to 47 percent".

"The net change of incomes as a result of indexing benefits to the average wage is small increase when the costs of living continue to increase, and the housing crisis shows little signs of easing for those on low-income."

Is the economy safe?

The Budget 2019 operating allowance has been increased by $1.2 billion and the Budget 2020 allowance has been increased as well.  

In its analysis of the Budget, ASB Bank said in many ways "the economy could do with the boost". 

"The Treasury estimates show small, but consistent surpluses, while net debt eventually tracks down below 20 percent of GDP by the end of the forecast period - so far so good," it says. 

But ASB said the Government may be at risk of missing its net debt target: "We suspect that the Government may be at risk of missing its 20 percent of GDP by 2021/22 net debt target."

It comes after Finance Minister Grant Robertson was slammed by National for recently setting new debt guidelines for when the current Budget Responsibility Rules of reducing debt to 20 percent of GDP within five years, have finished. 

Robertson said Treasury advised the Government to look at a range of 15 to 25 percent. Treasury currently forecasts net core Crown debt to reduce to 19.1 percent of GDP in 2021 to 2022. 

National's Amy Adams said: "As the economy continues to slow, the Government is likely to break its self-imposed targets."

ASB said: "Indeed, the Government has committed to extra spending, investment and borrowing, assuming that it will have the tax revenue to do so.  

"Of course, time will tell if they do."