Rail was another big infrastructure winner, with $250m to go towards the KiwiRail turn-around plan, which aims to turn it into a self-sustaining freight business within 10 years.
Nothing new there though, it's just the second tranche of the KiwiRail turnaround plan that was agreed upon a couple of years ago.
The Wellington $88 million was a bit of a surprise. Rumour is that the new Matangi trains draw too much power from the system, which made the extra $88m essential to avoid the quarter billion spend on those trains from becoming money flushed down the toilet as they can't run.
One thing that's particularly interesting to look through is the estimations of taxation income over the next few years. Page 2 of this gives a good run down of this: http://www.treasury.govt.nz/budget/2011/estimates/est11sumtab.pdf
In 2007/2008 taxation income was $61b, but this declined to a low of $55b by 2009/2010, recovering to $58b in the 2011/2012 financial year.
The government estimates that this will start increasing dramatically to $66b by 2012/2013 and - amazingly - to $75b by 2014/2015. That's a $20b increase in tax take in 5 years, or 36%.
That seems pretty optimistic - and unlikely to cut the mustard with Don Brash in any post-election deal one would guess?
Ah thanks for the explanation Steve. I knew there had to be some bizarre reason behind it.
Interesting that transport is now the 6th biggest area of expenditure. If you exclude finance and IRD it's the next biggest expenditure area after the big three of social development, health and education.
Reinforces my feeling that we certainly spend enough money on transport, we just tend to spend it on stupid stuff.
Yeah I'm sure the 2009 transport expenditure is a mistake.
The $23b supposedly spent on transport in 2009 doesn't seem quite right.
Reading Cunliffe's opinion piece today suggests to me that Labour have perhaps finally listened to what has been said in this thread.
There's still something of a credibility issue that Labour will need to resolve though. They are proposing to kick start the economy to a bigger extent than National, make a bigger and bolder effort to reduce borrowing - yet so far the only policies would seem to involve more spending.
I think the Greens alternative budget proposes some good ideas at fairly raising revenue. It makes one wonder whether Labour will reassess their support of a capital gains tax, what they might do about the Emissions Trading Scheme and (of most interesting to me personally) that they might finally say something about transport.
Wasn't there an big earthquake in there somewhere? The problem with such comparisons is that there are all sorts of effects embedded in the income tax and GST take.
Yes you're definitely correct there, as in fact there were two big earthquakes in there. Perhaps Canterbury could be excluded from the figures?
What it really requires is Labour doing some hard yard through written questions in getting all the numbers, plus a mass of OIA requests to Treasury so they can learn absolutely everything about the effect of the tax changes and really show what has been going on.
Not long ago we were borrowing $250 million a week, now that's $380 million all of a sudden. Earthquake aside, what happened?
Heh. That's brilliant.
I agree Craig, I just wonder whether Labour’s so terrified of National using the criticisms of how they’ve been handling the economy to justify further spending cuts. It’s pretty easy for National to simply say “yeah we know the deficit is massive, that’s why we need to cut x, y and z”.
Don Brash’s latest letter to John Key helps justify any bad news in the budget quite nicely (Key’s reply to the letter probably should be a big thank you).
I guess I'm not saying that Labour's approach is what they should be doing. But I can kind of see why they seem to be hesitant.
Cutting research and education funding like this government have done for the last couple of years is just nuts, especially when other nations have invested more during the downturn so they come out of the blocks faster.
Yeah good point. I always thought the best way to catch up with Australia might actually be as simple as seeing what they've done and copying it (at least to as great an extent possible, we can't really dig up our country and export it to China - much to Gerry Brownlee's annoyance).