John Armstrong: Michael Cullen takes his revenge

COMMENT

Michael Cullen's fifth Budget is as much an act of political revenge as a transparent attempt to reverse Labour's sagging fortunes.

It is revenge a long time coming - 13 years in the coming.

It is far too simplistic to dismiss his Budget, with its drip-feeding of income top-ups to low and middle-income working families to the tune of up to $170 a week, as an expensive election bribe.

True, it introduces a new political concept - the election-year Budget delivered in the year before the election.

And Dr Cullen is wasting his breath trying to argue otherwise.

But his Budget is much more than that.

It is a landmark redistribution from the rich to the low-paid and, critically, the not-so-low-paid.

It is Dr Cullen's revenge for National's sweeping benefit cuts of 1991 and Ruth Richardson's Mother of All Budgets of that year which sought to roll back the welfare state.

Yesterday's Budget may not have old-fashioned Labourites instantly jumping to their feet for a full-throated rendition of the Red Flag.

But it should have them quietly humming the old standard.

And, whatever those who are less loyal to Labour may think about being bribed, the Budget confronts them with a stark choice.

It forces them to choose between Labour's money in the hand and National's so-far vague promises of blunt tax cuts which would benefit the rich as much as help the poor.

It forces them to choose between a party which continues to pour billions into shoring up state-provided social services and a party with a track record of letting them slide.

Enter Rod and Barbara, the Budget's presumably mythical family with three children who live on Auckland's North Shore on an income of $52,000 and with a $385-a-week mortgage.

You do not get much more middle New Zealand than that.

This family will be a $100 a week better off from next April, and $140 a week better off from April 2006.

In contrast, cutting Rod and Barbara's taxes to a flat rate of 20c would return them less than $40.

The Budget thus takes the fight directly to National. It seeks to jolt the political agenda away from race relations - not surprisingly, there was scant mention of the word "Maori" in yesterday's documentation - and back to living standards.

No wonder Dr Cullen was feeling "very Clint Eastwood-y". "Make my day" was his message to National and Act, daring them to reverse the "Working for Families" plan which will lift the incomes of nearly 300,000 working families with children.

True, National could claim that the Budget does relatively little for the remaining 1.2 million households who will not enjoy Dr Cullen's largesse.

But the nearly 300,000 households which will benefit are essentially the ones who determine who governs.

There are risks to Labour of a backlash from those without children and the elderly who get nothing tangible.

Dr Cullen has recognised the danger posed by envy by ensuring beneficiaries get little extra.

And he has recognised middle-class envy by lifting the ceiling on parental income for eligibility for student allowances.

But, in the end, he has done what he has done because that is what Labour governments do. Or used to do.

In that sense, the Budget is as ideological as it is political. And it is nonsense to suggest otherwise.