Budget for the few, not the many.

The Budget delivered on May 20 is a tax swindle – a Budget for the few, not the many. The Prime Minister has advised you not to be envious.

Last week's tax package delivers windfalls to high earners and leaves lower-income earners with only small gains and ultimately bearing more of the tax burden. Tax cuts for high-income earners are far higher than tax cuts for people on the average wage. Fifteen per cent of the package goes to the top 1 per cent. A third goes to the top 5 per cent.

The expectations people have of relief from the rising cost of living will be dashed at the supermarket checkout. Treasury predicts inflation will reach 5.9 per cent next year. The income adjustment to those on national super to accommodate the rise in GST comes nowhere near that amount. The inevitable increases in mortgage rates, rents and general prices from this inflation will mean most on middle and lower incomes will be worse off.

In fact, real gross wages won't catch up to inflation until 2014.

When you add in the fact that 76 per cent of people in Nelson have an income of $40,000 or less, it is clear that Nelson will not do well out of this Budget. People under that threshold will get no tax relief at all once the GST increase, ACC levy increases and additional childcare costs are factored in. Meanwhile, the Government is "redirecting" $1.8 billion over four years of what it calls "lower quality" Government spending. Are cuts to early childhood and tertiary education examples of what National is referring to?

There will be fewer health services, with higher surcharges. Health is $300 million short of just keeping up with inflation in 2011 alone.

In Nelson, mental health services are particularly targeted for cuts.

Early childhood education loses $255m over four years – which could mean a lost subsidy of up to $31 a week for quality childcare centres that have invested in good teaching. The Government has confirmed that parents could face costs of $20 to 40 a week more per child for early childhood education, but some centres estimate the real cost could be up to $60 per week per child.

We have 26 all-day early childhood education centres in Nelson which are staffed to a level of 80 per cent or more with fully trained and qualified teachers. They will lose their subsidy. That means they either lay off some fully qualified teachers and hire nannies, absorb the loss (and how realistic is that when their overheads will be increasing because of the GST increase), or they pass on the loss to parents in higher fees.

Not to mention the loss of what Bill English calls other "low-quality" spending such as home help for the elderly, and his refusal to recommence pre-funding New Zealand Superannuation.

And all for what? On the Budget's own figures, it takes more than seven years to scrape up an extra 1 per cent of growth. New Zealand will need to grow 3.2 percentage points faster than Australia to have any hope of catching up by 2025. Far from being a high-growth Budget, this one relies simply on that old trickle-down theory that says if you put more money in at the top end, some of it will find its way to the bottom eventually.

The Budget has also done nothing to create jobs. Treasury has tentatively estimated that there might be 10,000 jobs over four years arising from any of the measures in this Budget, while unemployment widens by 60,000.

This is meant to be a Budget for growth. Much is made of how important science will be to our future. Yet, who grows our scientists? Universities and polytechs, that's who.

The Government trumpets additional funding for 1735 students at universities but has to admit that this really means only 765 new places. The other 970 are already there, being carried as unfunded students by the universities themselves. When you average out the 765 new places across the eight universities, you end up with an investment of fewer than 100 new student places in 2011. Similarly with polytechs. The Government wants to proclaim that it is funding 3173 more student places than before in polytechs. But it is only creating 455 new places, which when spread across 20 polytechs, is fewer than 23 per polytech.

This is inadequate for the "step change" the Government says it wants in our economic performance and productivity, let alone the quantum leap we actually require.

If we are to manage this region's wonderful primary resources optimally for the economy and for the environment, then we need smart thinking and inventiveness. How do we grow people who can be creative, productive and care for the environment at the same time?

We grow them through tertiary education, in all its forms. It is clever and hard-working people who are going to be this country's future, not simply wealthy people who want to see a good return on their money, important as that might be.

And to top it all off, Mr English is now musing openly about selling Kiwibank – thus giving away the only real stake we have in our own financial system.

Let me finish with one positive note from the Budget. I think the drop in the company tax will be helpful for business. But this is the first time a National government has done that – a Labour government has done it twice, with National MPs voting against it both times.

- © Fairfax NZ News