Why the 2018 Labour Budget Was so Underwhelming

“Yet, for all the hype, [the Finance Minister and the Prime Minister] were at pains to reassure big business and employer groups that this was above all a ‘fiscally responsible’ budget. Its commitments to social spending would not jeopardise Labour’s intention to maintain a surplus, they emphasised…” The two Labour Party politicians mentioned here are Grant Robertson and Jacinda Ardern, speaking in 2018 right? Wrong—they are Michael Cullen and Helen Clark, speaking 18 years ago in the year 2000.

The quote in the opening paragraph comes from this article from 2000, discussing the first Budget of the new Fifth Labour Government. Other quotes of interest from the same source are: “the increases fall far short of what is required to address the acute levels of social and economic inequality now embedded deep within the social structure”, “The majority of families forced to rent from private landlords will be no better off than before” and “Labour and the Alliance have done nothing to restore the vicious cuts to unemployment benefits and welfare that were implemented by the National Party”.

So if you’ve been listening to the Sixth Labour Government explain why this year’s Budget helps almost no-one and you’re starting to realise that you’ve heard this exact same bullshit story before, sit tight while we explain why—and what’s going to happen next.

After nine of years of neglect, including closing down rape crisis centres and overseeing the world’s highest youth suicide rate, the Fifth National Government was finally—although narrowly—voted out of power. The Sixth Labour Government came to power with a strong commitment and mandate to do something about the rape and pillage of the New Zealand populace by the plutocrats.

So the 2018 Budget surprised many commentators with how weak it was. The consensus described it as “National-lite”, and, indeed, it did almost nothing to help anyone. Many asked themselves why it was that an incoming Labour Government would deliver such a weak Budget. Didn’t they want to create the impression that they were doing something to help? Why miss this golden opportunity to set things right?

The answer to this conundrum comes from examining the 2002 Budget, which was released a few months before the General Election that year. That year’s Budget sent the New Zealand business community into paroxysms of rage.

The Employers & Manufacturers Association complained that “The huge $3.31 billion increase in new spending in the Budget for the next financial year is more than double the increase in new spending for the past two years combined”, and then National Party leader Bill English was enraged by “Labour and their higher operating balances, as well as higher taxes, increasing debt and billions of taxpayers’ dollars invested overseas”. There was even money for pure luxury items like refugee resettlement.

These increases impressed the population, as they were the first real relief Kiwis had been given in 18 years of relentless neoliberalism, and they duly returned the Labour Party to power. Kiwis contrasted this big spend-up with the cruelty of the National Party Budgets under Ruth Richardson, and the Nats were duly slaughtered, falling to 21% of the votes, their lowest result in 100 years.

It was a lesson for all, not least the Labour Party.

So the reason why the Sixth Labour Government did next to nothing to fix the nine years of neglect that the Fifth National Government put us through is simple: they’re saving the lolly scramble until just before the 2020 General Election. You can almost guarantee that, when the 2020 Budget rolls around, the grip of the New Zealand ruling class around the throat of the population will be loosened just enough to enable us to express our gratitude by returning Jacinda Ardern’s Government to power for a second term.

This is not a nefarious new trick, dreamed up by a crack team of political consultants—it’s straight out of the Helen Clark playbook. We can confidently predict another weak Budget in 2019 before the conspicuous generosity of the 2020 one, and we can also almost guarantee that if Labour wins a second term this would see us having two more weak Budgets in 2021 and 2022 before another lolly scramble in time for the 2023 General Election. Then, if they win a third, there will be weak Budgets in 2024 and 2025 before yet another lolly scramble in 2026.

This pattern is no less predictable than the General Electoral Cycle itself is, and could even be said to be part of it. Plus ça change, plus c’est la même chose.

Why the 2018 Labour Budget Was so Underwhelming