New Zealand budget 2009: Expectations

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.
4 replies
  1. Tom M
    Tom M says:

    I suspect there might be something other than PPP’s and state houses that gets a small amount of new funding, as a sort of PR gambit, perhaps to divert attention somewhat from the cuts. I can’t think what it could be though, other than more state houses, as you say.

  2. Matt Nolan
    Matt Nolan says:

    @Tom M

    Health and education will get small increases methinks – they will probably go on and on about exactly where these increases are going …

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