Boring, boring, boring - that's Cullen's goal

by Audrey Young

If Michael Cullen were to write the Herald headline about his Budget today, he would type:: "Cullen delivers on no-surprises promise."

Exactly. He wants it to be considered boring.

Asked yesterday for the Budget's theme, he said: "Certainty and stability within a very uncertain, unstable international environment."

And he expects to get through it in a brisk 45 minutes.

Allied to the important certainty and stability theme would be that New Zealand is "doing relatively well by international standards".

"Everyone is now painfully aware that in the hyper-sensitive environment of current global stock and finance market, the markets hate surprises," Dr Cullen said in a pre-Budget speech explaining why his Budget would be boring.

"They tend to respond vigorously to even the mildest deviation of disclosure from expectation."

Dr Cullen also said the Budget was no place for major policy announcements.

"I think we still haven't quite recovered from the Douglas-Richardson years when the Budget was the annual ambush by the minister of the entire policy process and trying to get massive structural change through by means of the Budget itself," he said.

"I don't think the ambush budgets ever worked. Tremendously exciting for the media, but for those who are on the wrong end of the stick often tremendously upsetting and destabilising as well."

No ambush then, but Dr Cullen's Budget won't all be bland.

A few sweeteners and a bit of bite have been saved for today.

But the "bad news" has been dealt with in advance to avoid infecting Dr Cullen's day with unnecessary negativity.

Cabinet's controversial commitment of up to $34 million for a Team New Zealand America's Cup challenge will show up in the Budget's contingent liabilities register.

From the Government's public relations view, it was important to have the uproar over that potential spending take place well away from Budget day.

And the law to raise the excise on light spirits and fortified wine was rushed through Parliament under extraordinary urgency with about two hours' notice last week.

Prime Minister Helen Clark, as Arts Minister, yesterday made one of the last of about 25 pre-Budget announcements delivered over the past fortnight.

Creative New Zealand is to get $11.6 million and the Royal New Zealand Ballet an extra $2 million over four years.

Dr Cullen has been at pains to point out that while he may be posting a $4 billion surplus, he had nowhere near that amount to spend because the figure was based on accruals accounting - taking into account revaluation and depreciation of assets.

Cullen's Budget:

* Expected to announce a $4 billion surplus.

* Economic growth expected to slow, but it remains good by international comparisons.

* Focus will be on education, training and innovation strategy.

* Anti-crime package to be unveiled.

* Tax moves to be indicated will involve compliance costs to small and medium businesses and encouraging foreign investment.