Budget 2024: Five ways for Nicola Willis to do the right thing – Simon Wilson

Simon Wilson is an award-winning senior writer covering politics, the climate crisis, transport, housing, urban design and social issues. He joined the Herald in 2018.

OPINION

Who’d be Nicola Willis? She and her party promised tax cuts and now they have to deliver, even though she must know tax cuts are almost certainly going to fuel inflation.

That’s going to create a lot of angry voters, probably about the time of the 2026 general election. But if she breaks her word on the tax cuts, that will create angry voters too.

And yet all is not lost! There are many things Willis could announce in today’s Budget that would not break any promises, would be popular and would make an enormous difference.

Why not be optimistic? Here are five of them.

1. Fund childcare as a public good

Everybody knows the first thousand days of a child’s life are the most critical. Yet we pay lip service to the idea of giving all our children a good start.

About 40 per cent of pre-school kids are not in early childhood education (ECE). Subsidies to parents are so low, an average household with two pre-school kids pays more than 20 per cent of its income on childcare. This is among the worst rates in the OECD.

The reason for this is that unlike schools, ECE is largely provided privately. Although 20 hours childcare is free, most providers insist on enrolments for longer than that, so parents have to pay and those extra hours can sting. The last Government tried to address this but was beaten off by the industry.

Prime Minister Christopher Luxon promised a FamilyBoost tax credit up to $75 a week before the last election, but that’s far short of what could be done.

In Canada, they have a nationwide $10-a-day childcare programme. Imagine that.

2. Make strategic planning bipartisan

Short-termism and political points-scoring are a terrible blight on our strategic planning, in transport, water, energy, climate action and other sectors.

Big projects get announced by one Government and then cancelled by the next, which is a pointless and entirely predictable waste of time and money. Enough.

Economist Shamubeel Eaqub believes we’re now about $100 billion behind where we should be on infrastructure, and he warns that if we keep on as we are, the bill will have doubled by 2030.

To stop the political feuding, the Budget could fund a bipartisan infrastructure group and give it one year to produce its first plan. The focus should be on evidence-based research and political consensus around both the projects and their funding.

That means, as the Helen Clark Foundation and WSP have reported, that debt deserves a mature debate. It’s 57 per cent of GDP in New Zealand, which compares well with the OECD average of 89 per cent.

3. Introduce energy labels for buildings

We know agriculture and transport don’t feature in the Government’s thinking about emissions reduction. But they do want to do something, right? So how about tackling buildings and construction, which contribute about 20 per cent of our annual emissions?

Andrew Eagles from the Green Building Council suggests that for a mere $1 million per year, we could follow Britain and create a Zero Carbon Hub. “This will galvanise the construction sector to aim for zero operational carbon in 10 years,” he says. Britain is on track for exactly that.

The programme would include energy efficiency labels for buildings, which would identify emissions from construction and year-by-year operations.

They introduced this in Australia in 2008. Energy use in commercial buildings went down by 35-40 per cent, which equates to a saving for businesses of $1.7 billion in operating costs.

Just one more example of why it’s absurd to pretend environmental gains have to come at the expense of the economy. And, apart from the salaries of a few backroom staff, doing this wouldn’t even cost the Government any money. Yes, backroom staff.

4. Fund public housing as a human right

The Government has already said it will support community housing providers (CHPs), like the Salvation Army and various iwi, to build and operate more social housing.

That’s a good thing, because many CHPs are experts at it. But the state-house programme is also vital.

A Kāinga Ora social housing block in Kerikeri. Photo / Peter de Graaf

Despite a vicious campaign against Kāinga Ora, that agency is currently building one in seven new homes in this country and has $30 billion in net assets. This work should not be sabotaged.

The Budget will contain enormous amounts for health, education, crime, welfare and economic opportunity. But unless the Government speeds up the provision of public housing, a lot of that money will go to waste. Warm, dry and safe homes are the foundation on which everything else rests.

Both National and Labour resist it, but this should be a human right.

5. Catch up with Australia

I’m sorry, I lied. I said earlier that the Government could do these five things without changing its thinking. But this one does require a rethink. A big rethink.

More than a thousand New Zealanders a week are leaving the country for good. Most go to Australia, where they have better job prospects and can earn, on average, 32 per cent more than they do here. (And as a bonus, they usually live in cities where good public transport does a much better job of managing congestion.)

Willis says she’s not an austerity minister. But cutting taxes, holding down wages and slashing government spending are austerity measures. There is no evidence they will reduce the wage gap.

Australia is raising taxes, to build a stronger economy and more functional society, which underpins those higher wages. It’s why people are going there.

Britain, meanwhile, has spent 14 years doing very much what Willis has introduced. The result: disaster. Its Gross National Income per capita is tracking to fall below Poland’s in about 10 years.

Please, minister, let that not be us as well.

The colourful life of Australians. Photo / Philipp Glanz