Video: Economics editor Brian Fallow - This is a tight-fisted budget:
The upshot is the Government has brought in a de facto capital gains tax, stepped up private sector collaboration to build more houses on Government land and will pay more out in accommodation supplements so lower income families can afford Auckland rents.
These are all factors which conspired against English's plan to post a surplus in his seventh Budget and will make getting to the next surplus target so much harder unless he makes some dramatic moves.
Instead, English yesterday posted a $684 million deficit.
He dressed that up with a forward projection of yet another wafer thin surplus for 2015/2016 of $176 million.
This came with the added teaser that there was the "possibility" of election year tax cuts further out if the fiscal track does finally result in Budget surpluses being posted by the National-led Government within its current term.
English's reputation as a straight-forward and sensible fiscal manager remains. But yesterday's Budget veered more towards its political impact than a major economic focus.
Video: Finance Minister Bill English - Helping parents into work:
When HSBC's Paul Bloxham coined the "Rock Star" epithet in January 2014, the NZ economy was still riding high on the back of the "White Gold Rush", where massive volumes of milk powder exports to China were sold at historically high prices.
English responded then that he would simply prefer the New Zealand economy to be known internationally as rock solid.
This reputation remains.
But a perfect storm has since developed, putting added pressure on the Government to adroitly manage the economy through appropriate policies.
English indicated yesterday that he was prepared to trim wasteful expenditure, such as with the Government's $1000 kickstart payments for those signing up to KiwiSaver.
This will save him another $500 million over four years.
But he passed up the opportunity to axe the KiwiSaver members' annual tax credit of up to $521.
If he had done that he would have saved the Government $705 million in the new financial year and arguably underwritten the next surplus.
There are gaping anomalies.
Video: Budget 2015 - Public reaction:
For instance, the Government has imposed a new air travellers' levy to boost biosecurity funding by $100 million a year. Yet it continues to deny Auckland the ability to impose transport levies to help underwrite the massive investment needed in the prime commercial hub.
Small businesses face punishing penalties when they fall behind on their taxes. Yet from April 2016, Inland Revenue is going to wipe up to $1.7 billion in child support debt in a bid to increase payments. Errant parents will now face a lower level of penalties and IRD will adopt a "fair and reasonable" test as to how much debtors can pay.
Ahead lies the "Netflix" tax where the Government plans to impose a GST-style impost on digitally-ordered goods from offshore.
The big sell-off of Government land for Auckland housing could also result in more revenues towards that Budget surplus target.
But until English starts targeting big government expenditure items such as NZ Super and the wasteful family tax credits for higher income earners, adding yet more tax cuts to the mix is simply not prudent.
