Political pay-back promises piling up

TRACY WATKINS
Last updated 05:00 28/01/2014

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OPINION: The Government books are not even back in the black yet and the spending promises are already piling up.

Labour's baby bonus is a return to the hip pocket elections of old - $60-a-week to the parents of newborns for the first year of their baby's life, or up to three years for those on the lowest incomes, including beneficiaries.

For the sake of fiscal prudence it does not kick in till 2018, but it comes with a hefty price tag.

Coupled with other policies announced yesterday including expanding free early childhood education from 20 hours a week to 25, an increase in paid parental leave, and other parenting initiatives it would add up to $500 million a year once fully implemented.

Labour made the mistake in 2011 of misjudging the electorate's mood for big spending promises - exempting the first $5000 of income from tax and scrapping GST on fresh fruit and veges failed to resonate at a time when voters were more worried about the size of the Government's debt. Likewise former Labour leader Phil Goff's last-minute pitch to the grassroots with a promise to extend the in-work tax credit to beneficiary families, a promise that sunk like a lead balloon.

Yesterday's announcement appears to be a case of more than one way to skin the same cat. By extending the baby bonus out to low and middle income earners up to a generous $150,000-a-year, Labour is banking on it being politically far more palatable.

But it is also banking that the mood has turned since 2011, when we were still coming out of the black hole of the global financial crisis. The recovery is here and everyone wants a share in the dividends.

National has also kicked off the year by seeking to soften its flinty image and be a bit looser with the purse strings - and no-one is discounting the possibility that tax cuts could be back on the agenda in a third term.

Already, austerity is starting to look so 2011.

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- The Dominion Post

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