The Budget; the morning after

The Budget has been and gone for another year, and reaction, the Opposition apart has been relatively subdued. That unions rallied at Parliament two hours BEFORE the Budget was delivered by Bill English is somewhat symbolic in our humble opinion; there actually wasn't a lot for them to have rallied AGAINST afterwards!

There has been a degree of criticism from those on the far right that the Government has not gone far enough, but we don't believe that was ever likely. There is an election in six months time. John Key's priority is to get National elected for another term, then the pace of reform can increase.

At a personal level, we are barely affected by the Budget. We already contribute to Kiwisaver at the maximum rate, and an increase in the rate of our employer contribution will offset the halving of the government's tax credit. We've never received Working for Families, not have we ever had a Student Loan. As employers, we have employed a number of new staff this year, and as the business environment improves, that is likely to continue.

Labour's alternative is simple - a "fairer tax system"; code for increased taxes for those on higher incomes. We don't accept that such an approach is the way forward; Labour seems determined to close the gap between those on high incomes and those on more modest incomes by artificial means i.e. by taxing the former. What Labour fails to realise is the disincentive that this provides for people to get ahead and earn a higher salary. We saw that this week with the KFC staffer/Unite unionist who was complaining about having to work hard. We are in danger of becoming a nation that relies on the government to create our wealth, but governments have shown through the ages that they don't do that particularly well.

John Key will go to the country in November seeking a mandate for the budget, and for the changes it proposes, including the mixed ownership model for selected SOE's. We hope that he gets that mandate, because the prospect of the alternative, a Labour/Greens/NZ First/Mana Party government makes our blood run cold.