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Sneaky As Fuck: The Winners, Losers and Surprises of New Zealand’s Budget

The Great Budget Lolly Scramble of 2017: who scored all the Fruit Bursts, and who had to pick Milk Bottles out of the gutter?

by Richard Meadows
25 May 2017, 11:54pm

Finance Minister Steven Joyce told us his first Budget would not be a lolly scramble. I don't know how he managed to keep a straight face.

When the big day finally arrived, Joyce proceeded to fling handfuls of lollies into the crowd with such gusto that at least one unfortunate National backbencher was blinded by a rogue Jaffa.

Government bean-counters have been clipping coupons and washing undies in hotel sinks for eight years. Now that national debt is under control and lush surpluses are on the horizon, they're finally cutting loose. By some totally wild coincidence, this newfound largesse has been bestowed upon the good citizens in an election year.

Joyce took over the Finance gig when Bill English landed the top job. Scientific studies have shown that English has the driest balls in the land - a man so desperately boring that his greatest act of daring is treating himself to a pie on Budget Day.

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Focusing on the issues that matter.

But even our soporific PM was riding the sugar rush like a hyperactive three-year-old. Liberated from the usual boring numbers speech, he put the boot into the Labour Party in a gleeful fashion eerily reminiscent of John Key, his predecessor and long-term bromantic partner.

To be fair, there was a lot to be excited about.

Budget 2017 was a triumph in pre-election bribery, offering a little something for everyone, but that doesn't mean the loot got distributed evenly. Who scored the mini-Moro bars, and who was left picking slightly grubby milk bottles out of the gutter?

WINNERS

Families
The big splash was a $2 billion 'family package' to beef up Working for Families tax credits, hike tax brackets, and boost the accommodation supplement.

For the 1.3 million families affected, weekly incomes will rise by an average of $26. Some will get less out of Working for Families because of changes to abatement levels, but in most cases that'll be more than compensated for by lower taxes.

Right now, everyone pays 10.5 per cent tax on the first $14,000 of income, and then 17.5 per cent on anything up to $48,000. Those brackets will go up to $22,000 and $52,000 respectively, saving workers anywhere from $11 to $20 a week.

Middle-income earners gain more than minimum wage slaves, but the latter are likely to benefit from both Working For Families credits and huge boosts to the accommodation supplement. Some households will receive up to $80 more each week to help with rent. Students haven't been left out in the cold either, with 26,000 people in the main centers to receive an extra $20.

Residents of Amberley, Ashburton, Te Kauwhata, Oxford, etc
The underlying boost to the accommodation supplement was paired with a revision of the payment categories for each geographic area. A few lucky communities jumped two categories higher, increasing the supplement by as much as an additional $90. I suspect some of these obscure towns were created for publicity purposes, but I'm reasonably confident Ashburton is a real place.

Landlords
The glut of accommodation supplements will ultimately end up in the pockets of landlords, who will no doubt hike rents in turn, pouring more petrol on the smouldering tire dump that is the Auckland property market. Yay!

Old people
Superannuitants stand to gain an average $13 extra per week. Super is linked to wages, so this would happen simply as a consequence of the other changes. It's a clever hands-off move on the Government's part, which will no doubt help them win the affections of the grey-haired ones.

The health sector
Joyce tossed a big pack of soothing Strepsils to the struggling health system. Almost half of the record $3.9b of new spending will go to District Health Boards, while other recipients include mental health services, care and support workers, and ambulances.

The Defence Force
The military folks commando-rolled into the fray and came up with a handful of Jet Planes - although not, alas, actual jetplanes. Still, they're getting nearly $1b in new funding to invest in better intelligence and surveillance, upgrade bases, and a new ship for the Navy.

Honourable mentions:
Schools and childcare centres get another $1.1b over four years. Then there's $1.2b for police, prisons and courts, $803m for social housing, vulnerable children and other social services, and $321m for social investment programmes (most of which had already been announced).

LOSERS

Me
There's always one weedy kid sobbing because the big kids took all the lollies and Darren from Year Five pushed him over (fuck you, Darren).

The Government is axing the $10 a week Independent Earner Tax Credit, which went to singletons like me who don't earn much but don't qualify for other assistance. The tax bracket changes will net me an extra $11, so I'm up by a buck. Hot damn!

This makes me part of Andrew Little's 'dollar Bill' cohort; lower-earners who won't get enough to buy so much as a chocolate fish. It'd be fun to get all self-righteous, but I'm pretty glad the money's going to schools and families and mental health and such.

The Labour Party
National's masterstroke was funding a whole bunch of causes that the Left usually champions - vulnerable children, healthcare, the frozen waifs at Radio NZ.

This plot twist generated a fog of cognitive dissonance so thick that Labour had to frantically grope around for something to attack. Poor old Andrew Little. His feeble speech couldn't even fill a 20 minute slot, although I was pleased he got on board with the candy theme by referencing "the amount of fudge being rammed down New Zealanders' throats".

WRAP-UP

Budget 2017 was sneaky as fuck, and not only because National somehow out-Laboured the Labour Party.

Most of the headline-grabbing goodies were due for delivery anyway: Working for Families payments are indexed to inflation, and were last bumped up in 2007. The accommodation supplement was also long overdue for revision, given it's currently based off rent prices from 2005.

Even the tax changes are a sleight-of-hand. Income tax hasn't been updated since 2010, which means the Government has enjoyed seven years of cashing in on the 'bracket creep' of growing wages pushing people into higher thresholds.

Basically, Joyce and English get to look like heroes for doing things the Government should have done years ago. Will voters fall for it?

It depends how seriously you take the lolly scramble metaphor. Some commentators say it's undignified, implying voters are so infantile that they ignore the big picture and stretch their sticky fingers straight for the sweeties. Surely every citizen scrutinises the fine detail of massive, boring and desperately-needed infrastructure projects, and spends long nights studying the looming demographic crisis in healthcare and superannuation?

There's a series of famous Stanford experiments in which researchers gave young children a marshmallow, promising to double the bounty if they could resist temptation for 15 minutes. Politics basically boils down to this same experiment, except the stakes are just a teensy bit higher. Here's hoping voters have more willpower than the average four-year old.

Richard Meadows, a recovering former business journalist, blogs about money, travel and the pursuit of happiness at Deep Dish . You can follow his lifestyle experiments on Twitter, Instagram or Facebook .

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