Tracy Watkins writes:
It speaks volumes about David Cunliffe’s bad week that on the day John Key delivered his pre-Budget speech, it was the Labour leader who copped it on the street over the Government’s failure to make a big dent in unemployment.
To be fair the gentleman in question abusing the Labour leader didn’t seem a fan of either major party.
Labour’s headache, six years on, is that National has been hugely effective at painting the Clark-Cullen years as a decade of tax and spend, compared with its own narrative of scrimping and fiscal prudence.
The reality, of course, is not quite as straightforward – despite the “zero” Budgets, government spending has continued to rise each year under National. But there is no dispute that when it came to power, the country was staring down the barrel at a decade of deficits and skyrocketing debt.
More than a decade of deficits. That was the original projection, but the revised forecasts were for a permament structural deficit that never went away – meaning debt would grow and grow and grow until the inevitable happened – as in Europe.
The May Budget will show that National has done a remarkable job of turning that around by bringing forward the return to surplus by some years and lowering the debt trajectory.
That it has done so by reining in spending, rather than slashing and burning and introducing austerity measures as seen in Europe and elsewhere, makes that feat even more remarkable.
It’s almost harder to do it by just restraining new spending, rather than cutting existing programmes. It’s politically easier, as people protest a spending cut more than not increasing spending. But from a government point of view, finding enough money by hundreds and hundreds of small efficiencies is harder work than just slashing a couple of programmes.
But the counterfactual – that a Labour government would not have responded to the global financial crisis in a similar fashion – can never be proven or disproven.
I don’t quite agree here. Sure you can’t prove it beyond a reasonable doubt. But you can judge Labour off its own press releases, statements and speeches. For five years they have consistently opposed and condemned every single move of fiscal restraint the Government has done. They battled against any reduction at all in public service numbers. They decry any efficiency gains as cuts – even if the money saved goes into frontline services. They opposed the reductions in KiwiSaver subsidies. And almost without exception all their policies are to spend massively more. The one noble exception is their superannuation policy.
So I don’t think it is unfair to judge Labour on the basis of their own statements. If we accept they believe what they say (a big call I know), then one can only conclude that there is no way New Zealand would be heading back into surplus next year if they had been in Government,Tags: Labour, surplus