Shane Jones: Vanilla Budget will offer little to savour or feed economic growth

Each year, our Parliament passes the annual Budget. Unlike the US, we don't have the drama of Congress holding the government to ransom, refusing to accede to a President's spending agenda.

More's the pity, given the Labour Party has the unfettered political power to do whatever it likes.

Over past decades, Labour has had two prominent Finance Ministers. In the 1980s Roger Douglas had a Budget leak prior to being holed below the political waterline. Michael Cullen sported a buttonhole flower for his Budget announcements in the 2000s and was wounded in the Winter of Discontent.

This year Grant Robertson, despite Covid-response bouquets, will receive brickbats as families struggle with economic hardship and social engineering. Too many firms are grappling with workforce shortages and creeping red tape. Robertson will lecture us about climate change whilst minions run around Auckland puncturing SUV tyres.

Kiwis know the private sector is the economic engine, generating funds to meet our societal obligations such as health. It is already spluttering and there will be a loud backfire clap after this Budget. The motor is weighed down with new costs from cameras on fishing boats through to scrappy unions. At the very least, the Government should cease feeding inflation and call time on unnecessary regulation.

Despite the spin, cost pressures are not purely due to conflict in Ukraine or logistics in Shanghai. The timing is wrong, for example, for the Finance Minister's Income insurance scheme - an ideological rhinestone representing an additional 2.8 per cent tax on both employers and employees.

This is a time of business hardship. A cost that will add to the burden is the misnamed Fair Pay Agreement. An ill-conceived, controversial impost on already stressed small to medium (SME) sized firms.

Ministers need to take time out from Matariki gazing and reduce barriers that stunt business growth.

Of course, none of this will change. SMEs are not the natural constituency of the Labour Party. They don't seem to be at home in the National Party either. Were the Budget, however, to introduce a rapid depreciation schedule on machinery, and equipment with a higher financial threshold, commerce would be the winner and productivity would result.

It is obvious the current size of our economy has outstripped our domestic labour market. We have a benefit system that rewards too many who subsist on welfare rather than work. The nephs, as we say in Tai Tokerau, become either under-employed or unemployable.

Over 60 per cent of our firms say their growth is stifled by a lack of skilled people.

Training is critical. Recognised Seasonal Employees from the Pacific are essential and the Budget should signal an expansion - of even greater importance with the geo-political changes afoot in places such as the Solomon Islands.

Open-door immigration must not happen again. A transition is required and we must develop a population policy; something this Budget will most certainly not address. We need long-term settings for more migrants to work and eventually achieve residency.

Kiwis want more of their own money. It's unlikely the Budget will address this either. Tax bracket automatic adjustments, avoiding double taxation such as with GST on council rates and other excises will not be dealt with. Perhaps in the year of the election, such relief will be offered.

It appears climate change funding will be found. Hopefully, it will be for practical infrastructure and not wasted on minority hobbies such as bike-riding in Auckland. On the topic of the City of Sails, the Budget should cancel the bottomless pit of consultancy gravy known as light rail. Clean energy transmission investment in the provinces is far more worthwhile.

Apparently, the Finance Minister is worried about the infrastructure deficit. An NZ Infrastructure Bank similar to the UK with endowed capital should be developed. However, with no efficient process for statutory consents, our infrastructure situation will remain parlous. We require a legislative process with unique criteria for essential utilities. RMA reform will not deliver this.

Sadly this Budget will not pass the Great Repeal Bill to reduce the size of the State. Instead, it will fund the hollow Māori Health Authority, the Three Waters political septic tank and a host of marginal entities. The growth of the Public Service is not sustainable. Not because of ideology but because of performance and the need to trim costs.

Sadly the current civil service leadership is hidebound and ill-suited for the post-Covid environment. Without external experience, CEOs shouldn't be employed to run the State. Private enterprise experience rather than a pure state sector diet is crucial to maintaining the engine of growth.

The Finance Minister is a master at word-stock. Such a facility may confuse his political parliamentary opponents in the upcoming Budget argy-bargy. However, voters are not visually impaired. They will see this Budget is second-rate in the absence of decent opposition.