No broken promises

Labour has been trying to say that National will be breaking the promises it made about Kiwisaver, student loans and Working for Families.

Those promises applied to this term.

John Key’s pre-Budget speech makes it clear any changes will not take place until after the election.  People will be able to take the proposed changes into account when deciding whether or not they give National a second term.

Mr Key said the Budget will contain changes to KiwiSaver, Working for Families and interest-free student loans – programmes which collectively cost almost $5 billion a year.

“These programmes were introduced during a debt and consumption-driven economic bubble, and it is clear that they are unaffordable,” Mr Key said.

“None of the changes we will be making will affect people before the election so New Zealanders will be voting with all the information they need and can make their own choices.”

The Government intends to reduce the amount of money it has to borrow from overseas to put into KiwiSaver, and increase the amount of genuine savings from the private sector.

It makes no sense for the government to borrow to help other people save nor to help those who could and should be looking after themselves.

Mr Key said Working for Families will also be better targeted at lower-income families, who have a much greater need for assistance, and a little less generous to families higher up the Working for Families scale.

“We will do this gradually, in a way that minimises the impact on families,” Mr Key said.

The student loan scheme will also be adjusted but will remain interest-free.

“The changes we are making in the Budget will make all of these programmes more affordable and ensure they survive into the future,” Mr Key said.

WFF should never have been given to upper income families. A three year repayment holiday on student loans for people who go overseas was also far too generous.

There was no justification for welfare for wealthy people when the government’s books were in surplus and there is even less for it now they’re in deficit.

It will be very interesting to see how opposition parties react to this. It won’t be easy to convince people that borrowing to give money to wealthy families and people who’ve left the country is a good idea.

The full speech is here.

7 Responses to No broken promises

  1. Sinner says:

    NZ is borrowing every damn cent of the Dole, the DBP, sickness, Health, Education – every fucking thing really. And the best he can do is:

    “It would not be a ”slash and burn” Budget, but would ”balance a number of the Government’s aims”

    Look: there’s only one silver lining: this budget doesn’t matter. There will be a new budget, a real budget, in Novmber, after the election, with Brash as Minister of Finance. And every single “middle class” welfare programme in NZ will be wiped out then: starting with the really big items: Health, Education, Welfare, Super.

    What’s depressing is even when we’ve done all that, we only get $20 BILLION every year. But we have debts currently of 120% of GDP and skyrocketing: we need to pay off far more than $20 BILLION – about $160 BILLION. Add in interest, it’s at least ten years to get debt free once we stop paying welfare.

    That’s how serious NZ is – and why Key+English’s plan is worse than doing nothing.


  2. Don McKenzie says:

    Dear ‘Homepaddock’, On a dozen and one blogs around the country there are frustrated postings followed by equally frustrated comments regarding the ‘State of the Nation’.I know you are not keen on Binding Referenda, Citizen’s Initiative or otherwise, however the ‘Swiss” seem to cruise along nicely whilst we are left in their wake, OECD tables are pretty compelling.
    Perhaps you may be interested in Amy Brookes ‘100 days website’ as a step in the right direction.?



  3. homepaddock says:

    Sinner – the sort of radical surgery you prescribe could well kill the patient.

    Don – how many recipients of government largesse would vote to end it?


  4. Sinner says:

    Sinner – the sort of radical surgery you prescribe could well kill the patient.

    On the contrary – it is commonsense, and the only way to pay of debts.

    One thing Don understands – that it seems very few other Kiwis understand – is simple arithmetic.


  5. Cadwallader says:

    I am with Sinner. There is a desperate requirement to cut government expenditure, but the bright spot is the improving terms of trade. A good tough budget followed by an increase in productivity may see a sound 2012 and beyond. It is too late to navel gaze, let’s get going!


  6. gravedodger says:

    What part of committing political suicide do the most vociferous rightwing opponents of JK’s pragmatic answer to the ravages of the NZ economy with its cleverly embedded voter loyalty, committed to by Ms Clarke and her socialist supporters with a well co-ordinated long view, not understand.
    Did Ruth Richardson’s political demise not occur in their cognitive lifetime and does reading recent history not provide a link, sheesh it was only 20 odd years ago.
    Even her leader dumped her from the Min of Finance portfolio after election in 93 when the National leadership turned yellow just as Lange did six years earlier over Douglas’s courage in facing the real problems in the socialistic demolition of our productive capability.
    John Key is giving the people a heads up to the National government plans to restore growth and productivity to NZ Inc and will let the chips fall come November. If his plans are rejected then he will retire and the shambolic decline will inexorably continue to true basket case territory at present occupied by Greece and co in Europe with minimal effect on him personally but with a very large portion of disappointment at the failure of democracy to deliver a real solution.

    Refreshingly open, honest and without precedent in my lifetime, this is politics as she should be plied.


  7. homepaddock says:

    GD – quite. Better slow and steady in the right direction than the bull at a gate approach which would put National back in opposition and let those who caused most of the problems back in government.


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