David Cunliffe: Borrowing, splurging for rich has to stop

David Cunliffe, Labour finance spokesman. Photo / Mark Mitchell

The budget will be a success if it shows that National has realised it cannot go on as it has: borrowing and splurging on tax cuts for the wealthy, then asking the rest of us to pick up the bill.

The Budget will be a success if it presents a credible plan for fixing New Zealand's broken and stagnant economy, as Labour's economic policy package will do.

If, however, the Budget is simply more of the same tinkering from John Key, and if it pins all our economic hopes on rose-tinted forecasts of economic growth, while refusing to specify where within each department or service cuts will be made, it will not be a success.

It won't be a success if John Key lacks the courage to decide himself where the cuts his poor economic management and irresponsible tax cuts have made necessary will fall and, instead, heaps those decisions on public service chief executives.

A successful Budget will be one that confronts the fundamental problems of this country's economy head on, rejects the "borrow and hope" mantra of John Key's National Government, and protects important public services while asking all Kiwis to contribute their fair share to the cost.

To do so it must pass four crucial tests:

First, it would build a stronger export-oriented economy through investment in skills, innovation and R&D; matched with the necessary monetary reform to bring policy up to date with best practice.

Second, it would invest in savings to help build up a domestic capital base, so that we can own our own future, rather than becoming further indebted to foreign banks. In doing so it would keep the Government's side of the bargain with the 1.7 million Kiwis who have joined KiwiSaver.

It wouldn't pretend that selling public assets to tackle Government debt makes any more sense than selling your house for scrap to pay off your mortgage.

Third, it would recognise that our greatest asset is our people and that Kiwis need more jobs with better pay. It would contain a fair tax plan that would close the loopholes that allow too many wealthy New Zealanders to avoid their fair share of tax.

And fourth, it would contain a credible plan for debt reduction that was part of an integrated economic reform plan that left our economy in better not worse shape toinnovate, invest, employ, and earn a great living in a competitive modern world.

But we'll have to wait until 2012, and the first budget of the sixth Labour-led Government, to see a budget like that.