Let's try that again, but shorter.
Budget 2011 is not a reversal of fortunes. We saved $1.2b over four years - that is the only thing that happened. There is no need to explain or dismiss the miracle cure, because we're still in our sickbed.
This $1.2b isn't all it's cracked up to be. It's coming out of money the government was pumping into private KiwiSaver accounts. This means less government debt, but it also means less money available for investment, nd in the long-term it means people will have less saved. This isn't a net negative, it's just a net zero - nothing's really changed.
But there is a distributional impact: The employers' tax credit when mainly to high income earners. They made more money, so saved more, so their employers also contributed more and got more tax credits for it. So by cutting the employers' tax credit, they've made KiwiSaver less skewed towards the rich.
That is all.
(Realised that I was kinda droning on yesterday. So here it is again, crispy.)
ALSO: New visualisation from Chris McDowall over at SciBlog!