Home > Social Issues, The Body Politic > Budget 2016 – Who wins; who loses; who pays?

Budget 2016 – Who wins; who loses; who pays?

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Budget-2016

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The point is if we’re going to have a tax programme [of tax cuts] – we’re not ruling that out in for 2017 or campaigning on it for a fourth term. But having probably a bigger one, to be blunt.” – John Key, 16 May 2016

Philosophically we believe in lower taxes and smaller government, and government’s definitely getting smaller.”- John Key, 16 May 2016

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Paula Bennett denies there is a housing crisis in New Zealand;

I certainly wouldn’t call it a crisis. I think that we’ve always had people in need.” – Paula Bennett, 20 May 2016

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Paula Bennett announces plan to offer $5,000 to homeless and state house tenants to leave Auckland and go live in provinces;

I would say to those that are homeless that there is a chance that they could get a house in days if they were willing to look outside of Auckland.” – Paula Bennett, 25 May 2016

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Very quietly, a cut here and a decrease there, a failure to keep up with inflation in one place, and ignoring increasing population in another place, the Government is walking away from New Zealand’s longstanding social compact.

In his Budget speech, Bill English proudly says that government expenditure is down to less than 30 per cent of GDP, and that’s the way that it’s going to stay.

But how is this retreat from the economy achieved?

It happens by spending less on health and less on education, and not spending enough on housing for the least well off New Zealanders.–  Deborah Russell, 26 May 2016

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While it’s true the overall numbers of Housing NZ homes haven’t risen dramatically, the mix is changing and there are more in Auckland and less in places that we don’t need them.” – John Key, 27 May 2016

 

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Sadly, it seems once again that the Budget is a missed opportunity for children, while the military and Government spy agencies do extremely well. I don’t recall seeing any public opinion polls or evidence indicating the need for more investment in either of these areas, especially when there is such desperate need among families with children.

The Government has achieved its objective of appearing fiscally responsible and not much else. But through a lack of planning and an apparent lack of caring children are living in garages or cars, and do not have the nutrition or warm clothing that they need. Kiwi kids have a right to better lives than that.” – Vivien Maidaborn, New Zealand Executive Director, Unicef, 29 May 2016

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We would like to see some tax reductions, particularly for those middle income taxpayers who find themselves getting into higher tax brackets.” – Finance Minister Bill English, 27 May 2016

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There is absolutely zero doubt in my mind that the 2016 Budget is geared 100% toward building up a surplus for tax cuts to be announced next year. Just in time for the 2017 Election. John Key and Bill English have strongly indicated as much with their “kite-flying” with hints of cuts-to-come.

Funding for various state services have either barely increased – or drastically cut. The result has been a $700 million surplus – which appears to have been achieved at the expense of cutting funding for social NGOs and state services for the most vulnerable people in our society.

Some of the winners and losers from this year’s Budget…

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Winner

GCSB and SIS;

Funding for spy agencies (GCSB and SIS) will increase over the next four years by $178.7 million.

Loser

Department of Conservation;

For 2015/16 Budget, allocated $471,932,000

For 2016/17 Budget, allocated $430,190,000

Budget: Cut $41,742,000

Who Pays?

Endangered species throughout New Zealand and future generations of New Zealanders.

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Winner

Prime Minister’s Department;

For 2015/16 Budget, allocated $65,710,000

For 2016/17 Budget, allocated $77,442,000

Budget: Increase $11,732,000

Loser

Radio NZ;

For 2015/16 Budget, allocated $31,816,000

For 2016/17 Budget, allocated $31,816,000 (Based on zero change to NZ on Air funding; $128,726,000.)

Budget: frozen – nil increase since 2008/09.

Note, based on the Reserve Bank Inflation Calculator, Radio NZ’s funding should be around $36,570,000 and it’s funding freeze by National constitutes a 14.9% under-funding;

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reserve bank inflation calculator - radio nz funding

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Who Pays?

We all do.

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Winner

Education – Charter Schools;

Funding for up to seven new charter schools will be provided in the 2016 Budget, the Government has announced. – NZ Herald

$328.9m of capital funding and $20.2m of operating funding would go towards public private partnerships (PPPs) for seven new schools and three rebuilds. – Fairfax media

Loser

Public schools operation grants – frozen;

School operational funding has been frozen in this year’s Budget in favour of targeted funding for [under-achieving, at-risk] 150,000 kids.

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$43.2 million over four years will be provided to those schools with under-achieving students, and it’s expected the money will be used to raise achievement, there’s no accountability attached to the funding.

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The targeted funding works out at about $1.79 per student, per school week – schools won’t even know which students are being targeted as the policy’s designed not to identify them. – Fairfax media

Early Childhood Education subsidy-funding – frozen;

Early childhood education providers got no increase to their government subsidies for the second consecutive year.Radio NZ

Who Pays?

Our children.

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Winner

NZ military –

The Defence Force receives new operating funding of $300.9 million over four years as part of Budget 2016 to support the work it does, Defence Minister Gerry Brownlee says. – Gerry Brownlee, Minister of Defence

Loser

Home Insulation Programme –

National has cut home insulation funding to its lowest ever level in Budget 2016…

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Budget 2016 allocates just $12 million this year for the Warm Up New Zealand programme this year and $4.5 million for the Healthy Homes programme, compared to $23.9 million for Home Insulation last year. – Scoop media/Green Party

Who Pays?

 

  • “low-income tenants, particularly those with high health needs.
  • …young children (newborns to 5-year olds) who are living in cold, damp and unhealthy homes.” – Jonathan Coleman, Simon Bridges

 

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There are three significant stand-outs for this Budget…

1 – This Surplus was achieved at the expense of the poor.

With school operational funding frozen; no increase for early childhood education funding;  a dire crisis of homelessness; State houses being sold of by National; and a critical shortage of housing – it does not take much wit to understand that Bill English’s $700 million Budget surplus was achieved by under-spending in key social areas.

Worse still, National continues to doggedly pursue it’s policy to sell up to eight thousand state houses  by 2017.

Compounding National’s mis-management of the country’s scandalous housing crisis is National’s unrelenting and inhumane demand for dividends from Housing NZ.

This far, National has extracted over half a billion dollars from Housing New Zealand by way of dividends.

Housing NZ dividends under National

HNZ Annual Report 2009-10 – $132 million   (p86)

HNZ Annual Report 2010-11 – $71 million   (p66)

HNZ Annual Report 2011-12 – $68 million   (p57)

HNZ Annual Report 2012-13 – $77 million   (p47)

HNZ Annual Report 2013-14 – $90 million –  (p37)

HNZ Annual Report 2014-15 – $108 million –  (p33)

HNZ Statement of Performance Expectations 2015/16 – $118 million – (p12)

Total: $664 million (over seven years)

The above figures do not include taxes paid by Housing NZ to the National government.

Imagine how many state house could have been built by Housing NZ in the last seven years.

Imagine that every low-income family that needed a warm, dry, home – could have had one by now.

Imagine that instead, National will be demanding another dividend this year from Housing NZ – and will be effectively giving it away by means of tax-cuts to affluent New Zealanders.

2 – Many so-call “increases” are illusory.

When taken over a four year period many of English’s Budget “increases” are actually a cut in expenditure. Just two examples from many;

School  funding for 150,000 under-achieving, at-risk school children, was budgeted at  $43.2 million This sounds good. But that figure is spread not over the 2016/17 period – but  over four years.

Same with the Warm Up New Zealand and Healthy Homes Initiative, touted by Ministers Coleman and  Bridges as;

“…to insulate rental houses occupied by low-income tenants, particularly those with high health needs” and “to reduce preventable illnesses among young children (newborns to 5-year olds) who are living in cold, damp and unhealthy homes”

The media release touted;

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$36m for warmer, healthier homes

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But look further into the detail;

The investment includes:

  • $18 million of operating funding over two years to extend the Warm Up New Zealand programme to insulate rental houses occupied by low-income tenants, particularly those with high health needs.

  • $18 million over four years to expand the Healthy Homes Initiative to reduce preventable illnesses among young children (newborns to 5-year olds) who are living in cold, damp and unhealthy homes.

This is how English created his Budget “surplus” – with cleverly concealed cuts to social programmes that impact on the poorest; most powerless; most desperate people in our society.

And we wonder why entire families are living in garages, cars, and tents?

And we wonder how it came to be that children are dying from mould in damp houses?

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Damp state house played part in toddler's death

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3 – This is an Ideological Budget

Make no mistake – this was an ideological budget with “Neo-Liberal Approved” stamped in big, red letters all over it. It was cold-blooded and remorseless in it’s pursuit of specific objectives;

  • reducing government spending on the poor, by freezing/cutting expenditure on social services
  • increased government spending on security agencies (spy, defence, police), in case the 1981 up-rising is repeated
  • satisfying demands from National’s business, conservative, and anti-welfare constituents
  • to give Bill English a second surplus
  • set the stage for tax cuts to be announced in next years’ budget
  • and offer an electoral bribe to voters in time for the 2017 general election

As is almost always the case, those at the bottom of the socio-economic heap are the ones who pay for National’s ideologically-inspired budget. Sometimes they pay with their lives.

Expect more of the same next year.

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Addendum

Spotted at a Z Service Station in the Hutt Valley; this Charity “voting” box, where customers vote for the charity of their choice. The charity gaining  most tokens wins a $4,000 donation from Z. Of the four, Fostering Kids NZ is ‘miles’ ahead with tokens;

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Manpreet, standinmg beside Coin-Vote Box, at Z Service Station in Hutt Valley

Z staffer, Manpreet, standing beside Coin-Vote Box, at a Service Station in the Hutt Valley

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Note the level of support for Fostering Kids NZ;

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Fostering kids - charity - homelessness - budget 2016 (2)

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It is refreshing to see indications that  New Zealanders are still compassionate to children  from vulnerable, less well-off families. There is still hope for our society, even if people like Key, English, Bennett, Tolley, et al have turned their heads to look the other way.

Acknowledgement: Many thanks to Deborah L for her sharp eye, spotting, photographing, and sending me the above images along with relevant info.

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References

Fairfax media: Prime Minister John Key hints at $3billion tax cuts for next election

Fairfax media: John Key is beating the tax cuts drum for 2017 with bigger surpluses ahead

Radio NZ: No housing crisis in NZ – Paula Bennett

Interest.co.nz: Paula Bennett announces plan to offer $5,000 to homeless Aucklanders and state house tenants to leave Auckland

NZ Herald: Dr Deborah Russell – Budget 2016 – How do we look after all New Zealanders?

Radio NZ: Checkpoint – PM puts onus on Auckland Council to create land supply

Fairfax media: Budget 2016 – A bare-minimum budget for children

Radio NZ: Tax cuts may be on cards – English

NZ Herald: Budget 2016 – $700m surplus this year

Radio NZ: Budget 2016 – SIS and GCSB get extra $178.7 million over four years

Budget 2016: Vote Conservation

Treasury: Budget 2016 – Vote Prime Minister & Cabinet

Budget 2016: Vote Arts, Culture and Heritage

NZ on Air: Radio NZ Funding Decisions 1993-2016

Reserve Bank: Inflation Calculator

Budget 2016: Vote Education

NZ Herald: New charter school funding announced

Fairfax media: Budget 2016 – School property and early childhood the big winners

Radio NZ: Budget promises funding for nine new schools

Treasury: Summary of Initiatives in Budget 2016

Budget 2016: Defence Force receives $301m new funding

Scoop media: Government cuts Warm-Up programme that saves lives

Beehive.co.nz: $36m for warmer, healthier homes

Radio NZ: Thousands of state houses up for sale

Fairfax media: Damp state house played part in toddler’s death

Interest.co.nz: Govt sees NZ$0.7 bln OBEGAL surplus in 2016/17

TV3 The Nation: Interview with Bill English

Additional

NZ Herald: Shamubeel Eaqub – House crisis puts Auckland’s future at risk

Other bloggers

The Daily Blog: Budget 2016 – What Bill English Didn’t Say In His Speech

The Daily Blog: The rules for the old too good for children?

The Standard: The Mother Budget

The Standard: Key’s powerful speech on the urgent housing crisis

The Standard: John Key used to be ambitious about dealing with poverty in New Zealand

The Standard:  Budget 2016 – F for Fail

Previous related blogposts

Tax cuts & school children

Tax cuts and jobs – how are they working out so far, my fellow New Zealanders?

The Mendacities of Mr Key #3: tax cuts

Letter to the Editor – tax cuts bribes? Are we smarter than that?

National spins BS to undermine Labour’s Capital Gains Tax

John Key’s government – death by two cuts

A Message to Radio NZ – English continues fiscal irresponsibility with tax-cut hints

The consequences of tax-cuts – worker exploitation?

The slow starvation of Radio NZ – the final nail in the coffin of the Fourth Estate?

National’s blatant lies on Housing NZ dividends – The truth uncovered

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give the rich tax cuts

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This blogpost was first published on The Daily Blog on 2 June 2016.

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