Budget version 3 free of vote traps

By VERNON SMALL deputy political editor

Finance Minister Michael Cullen will rise just after 2 pm today to deliver his third Budget, aiming to depict himself and the Government as safe and responsible managers of the economy.

As most of the Government's big-spending plans were put in place in its first year, today's Budget has been billed as a "no surprises" affair.

Dr Cullen has ruled out an election-year spendup, but within the modest amount of cash available he has had an eye to regional and lobby group interests, including cash for Auckland and Christchurch museums.

The biggest spending package not already disclosed in a steady stream of pre-Budget publicity will be a radical shakeup of tertiary education, including an extra $90 million next year.

A new funding model will split the cash given to tertiary institutions into three separate streams: research, funding per student, and a "strategic development" component.

The latter, along with the research funding, will be used to lever institutions into providing graduates the Government wants.

A strong economy, which has shrugged off the worst effects of the September 11 terrorist attacks, will enable Dr Cullen to trumpet higher-than-expected surpluses and an improving growth track.

There will be no specific "Green package", but the Government's key allies say they have won more cash for their pet projects than last year.

Ironically, junior coalition partner the Alliance is unlikely to get much recognition as Labour distances itself from the fractured party.

Key features of the Budget are expected to be:

* A surplus of $2.5 billion for the coming year.

* Growth of 3 per cent plus.

* Continued strong employment numbers.

* Total spending on new initiatives of about $1 billion.

* A $1.2 billion contribution to the superannuation fund.

* A major funding package for health worth $400 million a year - announced last year.

* Extra cash for tertiary education as part of a restructuring of the sector.

* A tax cut on employer contributions to superannuation schemes for those earning less than $38,000, due to take effect in 2004.

Full Herald coverage of the Budget from 2pm today:
nzherald.co.nz/budget

Budget links - including Treasury documents:
nzherald.co.nz/budgetlinks