Editorial: A boring Budget really will not do

The first Budget of a new Government is always awaited with particular interest. It is the moment of truth, when high hopes and electoral promises must be squared with the hard facts of economic life. This Government has come to office determined, in the Prime Minister's words, to "under-promise and over-deliver." It has certainly been lowering expectations of the Budget it will deliver this week.

The Minister of Finance has been preparing public opinion for a financial statement he is happy to describe as fiscally conservative and boring. He calculates, no doubt, that a lacklustre Budget with few if any surprises is exactly the sort that might settle business concerns about the calibre of this Government. That could be a miscalculation.

A change of Government is greeted by business people, no less than others, as an opportunity to reassess the national performance and introduce some fresh energy. It can only happen at a time like this because once a Government has been in office for a few years it fears that any reassessment will reflect badly on itself. So no matter how "boring" the Budget may be in fiscal terms - the balance of taxation and spending - we can hope for some interesting new priorities and programmes.

That hope has been diminishing over the past two weeks with a succession of spending announcements in advance of the Budget. There have been so many that there cannot be much left of substance for the Finance Minister to announce on Thursday. It is a curious tactic, adopted by the previous Government too. Presumably the theory is that particular items of spending or programmes that the Government wants to bring to public attention will be lost in the Budget coverage. Yet isolated announcements do not make much public impact. They are in the news for one day and forgotten. How many people could name one of the projects the Government has trumpeted in the past few weeks?

The enduring value of the Budget is that, skilfully constructed, it can tie the various items of taxation and spending into a coherent sense of direction. That does not draw attention away from the particular programmes. Far from it. They are the concrete plans that give an overall theme some solidity and credibility. In fact, the public is unlikely to get a general idea of the Government's direction unless it can see it translated into practical steps. A Budget needs both elements to be a success.

This Government urgently needs to give the country a sense of its direction. It came to power with promises to reverse a few of the steps taken by its predecessors but beyond that, it does not seem to have much idea of where it is going. Its Budget Policy Statement in March set out six goals. Not many people today could name one of them. The indications are that the Budget will restate all six goals. The Government really needs to incorporate them into one good broad principle that would give everybody a better sense of the coalition's leadership.

Business needs that clarity as much as anybody. In fact a sense of the Government's direction - provided it is not as retrograde as some in business already fear - would do more than a fiscally conservative Budget to allay the uncertainty in business circles lately.

The Government's stated goals include a number of real needs of long standing - closing the "gaps" for Maori, fostering a high skilled workforce - and several others that, though worthy in themselves, are not exactly essential to economic survival. Celebrating national identity through the arts, the first of the six "key goals" stated in March, is not likely to galvanise the productive energy of the public at large.

Labour has certainly under-promised, as the Prime Minister intended. If is going to over-deliver on Thursday it needs to produce a Budget more impressive than it has led us to expect.