Bill English's vanilla Budget | Stuff.co.nz

When Bill English takes his kids to the local ice cream parlour you can bet he orders vanilla.?

Not that there's anything wrong with vanilla. It's the most popular flavour of ice cream. It's inoffensive, safe, a little bit bland, and quite hard to define. A lot like the Minister of Finance's 2013 Budget.

For there were no ''deep dark secrets'' in this year's affair. It wasn't a Black Budget or even a grey one. It wasn't the Mother of All Budgets or even its long-lost cousin twice removed.?

A good way of judging the success or failure of Budgets is to check opposition reaction to them. David Shearer delivered an eloquent speech in Parliament but it was only tangentially related to English's Budget. Shearer spent more time on the Sky City convention centre deal than he did on what English had or hadn't announced.

Russel Norman found himself lecturing English on fiscal rectitude, reminding the finance minister that ''you can't borrow your way to prosperity'', which I found a little ironic coming from the Green Party.

And Winston Peters was forced to fall back on tried-and-true nationalist rhetoric about public assets, the exchange rate, and the manufacturing industry.

In other words, politically at least, mission accomplished for Bill English. By not providing a target he made it very difficult for anyone to shoot him down.?

So what about financially? Well, the Government has made good on its promise to get the country's books back into the black by next year - but only by the skin of its teeth. A surplus of $75 million in 2014 is the equivalent of you or me budgeting to have $75 left over from our entire year's spend.?

The way English has achieved this involves a fair bit of smoke and mirrors, too. While he refuses to accept that the part-sale of Mighty River Power had anything to do with the small surplus, citing instead tax growth and efficiencies, the reality is that if it wasn't for the sale of some family silver and a nip and tuck from next year's new spending allowance, there would be no surplus.

Fair enough. It's still a lot better than the $20 billion budget deficit Australia is wrestling with. And while English has left John Key with only $1 billion of new money to splash about in election year, he has at least laid the groundwork for National to be able to paint itself to voters as the party of fiscal responsibility in 2014.?

There were a few surprises. Action on child poverty wasn't there - yet - despite heavy hints that it would be, and for reasons best known to itself the Government has decided to hand voters a chewing gum-sized tax cut next year in the form of a $1 billion cut in ACC levies, which sounds a lot until you divide it by two million taxpayers. Surely that money could have been put to better use.?

The Government's moves on housing are mere window-dressing, with no serious attempt to prick the ?price bubble. Vague promises to give the Reserve Bank more power to demand banks take greater care with high-value loans and threats to take over consents processes from councils are unlikely to lead to a slide in house prices.?If National was serious about bursting the bubble it would have introduced a capital gains tax.?

Other plans in the housing sector make more sense. Continuing the Greens' home insulation subsidy will find few detractors; there's a little more money for the Christchurch rebuild and for some new schools and hospitals. Freeing up larger state houses for big families by introducing lease reviews of existing tenancies is also common sense.?

But that's about as far as it goes. There's no economic blueprint for growing the economy or getting New Zealand ahead, no plan for job growth or tackling youth unemployment. It's a competent, but hardly inspirational, Budget.?

Bill English would probably take this as a compliment. He's too fiscally conservative to be visionary; too cautious to take risks. And indeed any finance minister who turned around a $15 billion deficit just five years ago deserves plaudits.?

The question, however, is what now? As former Labour finance minister Michael Cullen discovered, fiscal responsibility only gets you so far. Sooner or later, voters are going to come asking John Key where the better future he promised them in 2008 is hiding.?

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Source: http://www.stuff.co.nz/national/blogs/bull-dust/8681812/Bill-Englishs-vanilla-Budget

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