Budget 2020: Robertson goes for repair, not rebuild

8:35 am on 15 May 2020

Opinion - "Never waste a crisis." That phrase has been on many lips in recent months. But Grant Robertson's Budget yesterday suggests he thinks that approach is glib, or borderline dangerous.

Grant Robertson delivers Budget 2020.

Grant Robertson delivers Budget 2020. Photo: Pool / STUFF LTD

Crises can be an opportunity for sweeping change. Many people, especially but not only on the left, have decided that the coronavirus's economic shock, alongside pre-existing problems of environmental degradation and widespread poverty, is the perfect platform for transforming their society and their economy.

Bring on a Universal Basic Income or Negative Income Tax, they cry. And a wealth tax, a switch from road projects to trains and light rail, a revamped Ministry of Works. These are the demands of many of the government's voters.

In the long run, these people may be right. But for now, Robertson obviously doesn't think so. His Budget concentrates on repairing the roof of the metaphorical house in which all New Zealanders live, responding to immediate needs, rather than rebuilding the foundations, which is what the advocates of transformational change seek.

The Budget does spend extraordinary sums: $50 billion for the Covid-19 rescue fund, against the normal Budget allocation of a few billion dollars extra. But that spending goes largely into propping up existing businesses - $3.2b for extending the wage subsidy - or into existing structures, as with the extra $3.9b for health.

There are some small green (or indeed Green) shoots of transformational change. Free trades training, in construction and related areas, for two years. An extra $1.2b for rail, which could be part of a transition to a low-carbon way to live. A $1.1b for a green jobs fund designed to employ 11,000 people restoring wetlands and planting trees beside rivers. A further $20b of the rescue fund still to be allocated, of which $3b is for infrastructure.

Mostly, though, this is a measured budget. An extra 8000 state houses will be built over four years, which is very welcome but still not enough to eliminate even the current waiting lists. Extra funding for insulating homes and school meals is also sensible, but not transformational. And most striking is the absence of anything substantial on welfare: no increase to benefits, no system overhaul, no transformation of the life chances of the most vulnerable.

This relative caution has several explanations. New Zealand First is understood to oppose many of the sweeping changes the Greens and Labour would like to see. Scaling up programmes is also not as easy as people think.

Delaying the time of reckoning

Most of all, though, this Budget reflects a view that crises should not, in fact, be rapidly exploited. With a literal state of emergency just lifted, normal methods of scrutiny just returning and many ordinary lives in chaos, it is arguably a deeply undemocratic time to reshape the nation's foundations. And, with the public service desperately stretched just dealing with the immediate disruption, an unwise time, too.

That is all well and good. But it will only delay the reckoning with many of the government's voters for a few months. Even if some of the public's policy demands are poorly considered, the country clearly faces problems that cannot be resolved with a few tweaks here and there.

New Zealand has hundreds of thousands of children living in poverty, some of the highest per-person carbon emissions in the developed world, and a dysfunctional housing market. Far too many of its rivers are not safe to swim in.

More broadly, too many people lead lives that are out of balance, lacking security in their employment, earning too little to work the shorter hours they would like, failing to connect adequately with their families and their communities.

These problems suggest some kind of transformation is needed. And even if the government can argue that immediate needs must be addressed right now, that excuse will not wash come election time, when it has to put forward plans for the next three years. If the government's parties in fact lack the appetite for transformation, they will not be able to hide it from their voters then.

*Max Rashbrooke is the 2020 J. D. Stout Fellow at Victoria University

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