Budget 2010: 'Is this it?'

OPINION: The Labour Party would take a different approach that was fairer for everyone, writes David Cunliffe.

Today the National-led Government has the opportunity to deliver a Budget that is fair to all New Zealanders and creates a modern economy with better jobs and higher wages. It will not take this opportunity.

Budget 2010 should be for the many and not the few. It should tackle the rising prices that make it harder to make ends meet and have a little left over.

It should be about ensuring that there are decent jobs for everyone able to work.

And it should have a real plan for the future that rebalances and grows our economy, jobs and incomes.

If Labour were delivering this Budget, it would be very different.

We would not be increasing GST or giving the bulk of tax cuts to the very highest earners.

We would not be introducing a tax on property without compensating those who rent their homes.

We want to see hard-working Kiwis get some relief from rising food, power, petrol and other bills.

Our priorities would be better jobs and better incomes for New Zealanders and their families.

We want to reclaim and rebuild the Kiwi dream where we all get a fair chance to work hard, get ahead and own our own homes.

We know that to achieve that we must put right the imbalances in our economy that hold New Zealand back and mortgage that future. They are easy to see.

We Kiwis consume too much and save too little. Labour would provide real leadership in this area, restoring the cuts to KiwiSaver and encouraging new, safe savings options so Kiwis could better provide for their futures.

We invest too much in housing and not enough in our productive businesses. Labour offered to work with the Government on this, but our bipartisanship was rejected. Together we could have found a package that was both better for the economy and fairer.

Instead, National's property measures will become a rent tax, with little or no compensation for those who rent the homes they live in. While both National and Labour want to address property speculation, National seems only prepared to compensate the investors for any extra tax.

We work long hours but lack the capital, technology and advanced skills to make the most of our efforts. That is why Labour will not support measures to remove accelerated depreciation from hi-tech business assets.

National's research and development plan is less than half what Labour was doing. National is taking New Zealand backwards.

Labour would be investing more in skills and training. Under National, universities are turning away good students at the very time we need to enhance their skills. Today's expected cuts to polytechs will make that problem worse.

It will be an old-fashioned National Party budget - tax cuts at the top while the real challenges go unaddressed.

Its pre-election promise not to increase GST will be broken so someone on $500k can get a $360 per week tax cut, while someone on $70k gets only a few dollars a week.

It will try to justify that as an economic growth measure, while at the same time saying debt is so high that government spending must be cut and the most vulnerable must suffer more.

Top-end tax cuts are not a solution to the growth problem. That will take hard work, technology, capital, skills and productivity, market opening and exports.

They will tell you not to be jealous in case the wealthy move overseas. But people aren't leaving for tax cuts. They are leaving for higher incomes and today's Budget will do nothing to lift our incomes.

Let's set the record straight. Labour is not opposed to tax cuts. But they must be fair and affordable, and unlike National we don't believe they are a magic bullet.

Even if Kiwis paid no income tax at all, we would have lower incomes than Australians. National promised a step-change to close the income gap with Australia, and having rejected Don Brash's great leap backwards, it has offered no plan to achieve that. There are no catchup targets in 2012, or 2015, or 2020, because there is no plan to get us there.

Labour would not promise before an election not to increase GST, then cynically break that promise.

We would not introduce a rent tax without compensating those who live in rental properties, as if only the landlords deserved compensating.

Labour's alternative approach would be a budget for the many, not the few. It would invest in the future. It would focus on more jobs and better incomes by boosting exports, savings and the smart economy. It would grow wages and take pressure off family budgets.

This is a crucial budget for New Zealand. National promised a step-change. Will it be a step up or a step back?

David Cunliffe is Labour's finance spokesman.