This is not a Government that often springs surprises, for which we should be grateful most of the time. But a Budget always brings hope of a new answer to the country's most pressing problem. Right now that problem is rampant housing speculation, sending home-ownership ever further out of reach of New Zealanders on average incomes. Bill English was halfway through his Budget presentation yesterday before he uttered the word housing. Then it was to repeat the mantra that the main problem is one of supply and to announce the Government was putting an additional $100 million into housing developments on surplus crown land in Auckland. It would also soon issue a national directive to local councils to allow more housing where necessary and measure its impact on houses prices.
That was it. He offered nothing to deter speculative investment. Quite the reverse. By its tacit declaration that nothing further will be done to discourage demand following last year's ineffectual tax measures, and the resolve to provide more land for housing, the Budget is practically a prospectus for residential property investment.
It is only at the poorest end of the housing problem that the Government has been spurred to do something new. First, the Minister of Social Housing, Paula Bennett, announced an up-to-$5000 relocation grant - apparently from her own discretionary allowance because it caught Mr English by surprise. Then, yesterday, the Budget provided an extra $10 million for 3000 places in emergency houses and a new housing special needs grant. Let us hope it is enough to ensure no family live any longer in cars.
The Budget's lack of new or daring ideas is all the more regrettable because the economy continues to perform strongly by comparison with nearly all others. Following a pick-up in the second half of last year, growth of 2.6 per cent is expected this year and the Treasury projects much the same or higher growth to 2019. Population growth is fuelling it, not just immigration but fewer departures. Employment has grown by 120,000 in the past two years, but so has the working-age population, which is why the pool of unemployed remains not much below 6 per cent of those in, or seeking, work. They are disproportionately young, unskilled and living in the regions. The Budget's attention to them takes the form of concentrating resources on those whose health and social problems render them hardest to employ and leave them likely to be lifelong dependents on the state unless their circumstances can be improved.
Schools have been given another $43 million for the 150,000 students at most risk of educational failure. Whanau Ora has another $40 million to help another 2500 families. The Budget has brought forward $600 million of next year's projected additional spending to cope more quickly with population growth, and a further $400 million has been put to debt reduction. That leaves too little for the Prime Minister's tax cuts. It is time to rule them out.
