Defective equilibrium points out that there has been little discussion about expectations for the budget around the NZ blogsphere. As a result, let me lay down some expectations here.
These are the things I strongly suspect will be in there.
- Future tax cuts to be postponed into the indefinite future,
- Provisions for future spending to be slashed further IN REAL TERMS (note that provisions should have been cut because of lower inflationary pressures in the first place),
- An increase in short-term spending on state houses (mainly refitting) beyond that announced,
- Further shifting forward of infrastructure projects,
- A REDUCTION in medium term infrastructure spending – implying that any investment now is taking away from future budgeted spending,
- Increased funding for the establishment of PPP’s,
- A funding freeze for most departments,
- A “shifting forward” of welfare entitlements – implying that future real welfare spending will be cut.
These are random possibilities (although fairly unlikely):
- A lift in GST rates (to 15%) from 2011,
- A freezing (or cut) on the income level and entitlements for WFF and some benefits,
- A PPP involving ACC,
- A complete withdrawal from the Cullen fund to pay for near term spending promises,
- An expanded program of state house BUILDING.