Budget 2021: Kerre McIvor - Labour returns to its roots - but who will pay?

When the 2021 Budget was announced, it must have been printed in red ink. Photo / Mark Mitchell

There was a sense of anticipation ahead of this week's Budget, the sort of anticipation I haven't felt in years.

Budgets used to be a big deal. Finance ministers used to deliver shock and awe in equal measure but for the past couple of decades, it's been steady as she goes. Until this week.

I was wondering what Grant Robertson would do now he is finally free of the fetters of New Zealand First. He may have delivered three Budgets in the previous coalition Government, but this week's Budget was Labour's and Labour's alone.

Most of the Labour decision-makers have spent their entire working lives in Parliament, dreaming of the day they would be the decision-makers with a mandate to reimagine the country. And when the Budget was announced, it must have been printed in red ink.

Because the beneficiaries of this Budget were the Labour faithful. Indeed, those on benefits were the biggest beneficiaries. Rates will rise by between $32 and $55 by April 1 next year, which, the Government says, will lift more than 100,000 children out of poverty.

That's expecting a lot from fifty bucks a week. I think, and callers agreed, that there are many reasons for child poverty and only one of them is related to money. But the proof will be in the pudding, and if that extra money going into an impoverished household does put a pudding on the table for the kids, and feeds them and clothes them, all well and good. If that's what occurs, it will be money well spent.

$1.1 billion was set aside for Maori initiatives, including building new homes for Maori along the papakainga model. Papakainga is a traditional form of whanau-based communal living on ancestral Maori land, sharing infrastructure and resources, and again, that will be money well spent if it gets people out of emergency housing and into their own homes.

Trains were given a boost too - Labour seems to have a lot of trainspotters amongst its supporters. Pharmac was given an extra $200 million, which will be a literal lifeline for many Kiwis, and infrastructure was given a $57b boost which the Prime Minister said was a nod to middle New Zealand and business owners.

I did like the reinstatement of the training allowance for those on the single parent payment – all the studies show that people who gain higher level qualifications are more likely to get a job, build careers and earn more dosh. In 2009, National cut training incentive allowances, restricting sole parents to sub-degree study – famously, the minister responsible for the cuts, Paula Bennett, had benefited from that scheme herself.

So yes, some good news for the Labour Party faithful and not as ideologically Labour as it could have been. But I keep coming back to how the hell we're going to pay for it all.

Taxes for the top bracket have risen slightly but we're still spending more than we're producing and it's going to be jolly hard for businesses to become more productive if they can't get the staff they need - and even harder to build infrastructure without the skilled workers and professionals.

Interest rates are on the rise and even though money's cheap right now, it won't be forever and the money we've borrowed and the bonds that have been issued for the Covid recovery will have to be paid back at some stage.

I fervently hope that the burden of repayment won't fall on the shoulders of our children and grandchildren. Young people have sacrificed a lot to keep vulnerable people safe during the pandemic – many of those vulnerable people are in the older age bracket. We owe them a debt of gratitude – not a debt that will take them a lifetime to repay.