"It's clearly a budget. It's got a lot of numbers in it."

"It's clearly a budget. It's got a lot of numbers in it."
      - George W. Bush

The news this week has been dominated by Bill English's second Zero Budget.

The Budget's main aim is to get the government's books back in surplus by 2014/15, which has taken on something of a holy grail importance in the government's eyes and that of the public, whether it actually is or not. See Low hanging rotten fruit for some potential alternative aims.

Unfortunately that means it is not a particularly inspiring budget and anyone hoping for news to encourage economic growth will be sorely disappointed.

Stuff.co.nz has a summary of the main points here, but I would like to focus on a few of them.

Closing a tax loophole for those who rent out their bach and boat, saving $109m over four years

This appears to be the Government's vaunted plan to broaden the tax base and while you can't rarely argue against it, it is a pretty week effort at broadening the tax base (Anyone for a capital gains tax?).

Three tax credits abolished, saving $117 million over four years.

This appears to be part of the broader tax base as well and while I'm not opposed to the removal of any of them, it suggests a government really scraping the barrel, devoid of any big ideas.

An excise tax hike on tobacco, taking the price of a pack of 20 cigarettes to more than $20 by 2016

My only problem with this is that it should have been more. A 10% increase each year seems like nothing, 25% would have really said something.

Deferring KiwiSaver auto enrolment

This policy would have cost a lot of money so it does make some sense to defer until the government is running a surplus. However on the other hand the Credit Rating Agencies have been a lot more concerned with our low rate of personal savings than Government debt or deficits, so wouldn't the benefits of increased KiwiSaver participation have outweighed the negatives?

Increasing student loan repayment rate to 12 per cent

I have already blogged that I don't have a problem with this policy. The changes to the Student Allowance entitlements are concerning however, especially the potential impact on post graduate students.

The aim of the Government is to ensure a return to surplus in 2014/15 on that level it succeeds. Unfortunately New Zealand needs something more than that, a budget that encourages economic growth and adresses the major issues facing it, the ticking time bomb of superannuation and interest free student loans.

Unfortunately for New Zealand this Government doesn't want to face it and I have serious doubts that the alternative have the ability to face them.