Break down of the Budget

May 30, 2018

 

The 2018 Budget, which outlines how much money the Government will spend and where it will go, was released Thursday May 17. So, where did all the money go? And what does it mean for students?


There was no increase in government subsidies for tertiary institutions. This means that while inflation (the cost of stuff) rises, universities and polytechnics are receiving the same (measly) amount of funding as they did last year. There are also broken promises; they did not lift the eight-year borrowing limit on student loans nor restore postgraduate student allowances.


The Budget did very little for students. But what about the rest of the public sector who are also held ransom by the lie of trickle-down economics? Long story short, the lie that ‘a healthy economy’ will reduce inequality continues. To the untrained eye, it may look like Labour is throwing around some big bucks to make some big changes. But when you take inflation and population growth into account, this Budget barely scratches the surface.


Education (excluding tertiary) is receiving $395m across the next three years to build new schools and classrooms and 1.6 percent increase in schools’ operational funding. This might look good on paper but our largest education union NZEI is calling this nothing more “than a minimal patch up”. Operational funding needed to increase by 4 percent to deliver high-quality public education. It’s the same with health. The extra $2.2b for DHBs isn’t very much when you consider that the Dunedin Hospital rebuild alone is expected to cost $1.4b.


There is no denying that there are some good initiatives in this Budget, such as free GP visits extended to 14-year-olds, increased funding for special education and 1,600 new state houses each year will help many. Yet the health, education, housing and welfare are all screaming that this still isn’t enough money. And that is because, with the Budget Responsibility Rules, the Government has made sure there simply isn’t enough money to be going around.


These self-imposed rules stipulate that the Government must keep spending below 30 percent of the GDP (the total monetary value of all goods and services produced in New Zealand), deliver an operating surplus (money left over in the bank at the end of the financial year) and keep debt under 20 percent. This severely limits the amount of money available to invest in public services. Labour campaigned on rebuilding housing, education and healthcare yet placed restraints on themselves which meant it was impossible to do so.


“Ultimately, this Budget continues with the neoliberal policies of the past decades,” says Auckland Action Against Poverty’s Coordinator Ricardo Menendez March, “where reaching a surplus is prioritised over making the necessary changes to end poverty.”


Grant Robertson, the Finance Minister, is keen to remind us that this the first of three budgets. But if you’re one of the 30,000 homeless people in Auckland or a student with $5 in the bank after paying for food, transport and exorbitant Auckland rent, another year is a long time to wait.


Robertson has also been throwing around that “transformation takes time”. To that, we call bullshit. The Budget Responsibility Rules are anything but transformative; tinkering around the edges of a broken system is simply the status quo.

 

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