On the eve of the budget yet another manufacturing company announced it is relocating to China, resulting in 200 job losses, which follows on from the announcement of 350 jobs losses at Fisher & Paykel to Thailand and the bed manufacturer Sleepyhead announcing it will do the same in a years time relocating to China.
Therefore, there's never been a better time to introduce a socialist budget in favour of Kiwi workers. Sadly most readers will know in previous Labour budgets its all been about paying off the national debt with record surpluses and maintaining the capitalist status quo.
No doubt New Zealand workers should of been expecting Labour to deliver for them in the budget. The demand for tax cuts has been high as the tax bands have not been increased in 10 years, and wages in real terms have generally stagnated in this period despite the propaganda.
Although tax cuts in themselves would not of delivered much for workers it is symptomatic of the indebtedness to which people find themselves in: just to make ends meet. It is often quoted that for every $1 earned $1.15 is owed. This graphically illustrates the the nature of the present boom in New Zealand based upon sweated labour for the benefit of capital.
So with a $2billion cash surplus, Cullen decided to cut company taxes from 33% to 30% nicely explained away as a deal done with United Future under MMP to allow the Labour Party into office. At the same time no tax cuts or movement in tax bands were announced as it would cause inflation and increase spending, and not encourage saving.
Additionally, he beefed up the new Kiwisaver (retirement) scheme, making employers contributions compulsory up to 4 %. Then saying that trade unions should take this into account when negotiating pay increases in other words forgo badly needed pay increases to pay for it! Dr Cullen you are supposed to be a Labour Finance Minister?
The issue here is that most workers cannot afford to put away up to 4% of their wages for retirement, because of the brief reasons stated in the article. It doesn't matter that the Govt will match $ for $ for the first $20 per week, most workers cannot afford to save for retirement at 65. It will probably end up that the most wealthy will take advantage of this nice little retirement earner and the low and average paid opting out. A simpler solution would have been to substantially increase state superannuation along with other state benefits, and offer workers a living minimum wage, linked to decent state housing for all who require it and an energy efficiency programme for older housing. What we got was very much a budget for the rich.
There was improvements (long over due and badly run down under National in the 1990's) to the infrastructure with the electrification of the Auckland railway and improvements to the Wellington railway and the introduction of regional fuel levy of up to 10c / litre to help pay for it. There was no call to nationalize public transport which would begin to address the real issues. This could have been done under urgency powers, being used to implement the budget!
Additionally, small amounts of monies for schools and hospitals. However, it would appear that there will be continuing industrial action in the Public Health Service as none of the issues around national pay parity and conditions of service with the autonomous District Health Boards have been addressed.
This budget is a disappointment for workers. It has not delivered , we may have a tight labour market and there are labour shortages, but the free market philosophy adopted by the Labour Govt is kicking them again and this budget has not helped protect them.
The budget was a golden opportunity missed. It exposes quite graphically that the leadership of the Labour Party is 100% in favour of the market, and after 8 years in government with surplus budgets, it can only offer at best lily livered minor reforms to workers i.e. 'crumbs off the bosses table'.
What is needed is a commitment to a socialist programme which nationalises the commanding heights of economy throwing out the parasitic foreign owners of our banks and major companies and to be immediately handed over to workers' control and management, with workers democratically running society with the immediate introduction of a 30hour week to achieve this. New Zealand workers cannot go it alone in isolation, and must build workers internationalism and a good starting point would be to fight for a socialist federation of the South Pacific linked to a workers international. This is the only genuine answer to capitalism under the guise of 'Rogernomics' and its neo conservative version followed by the Labour leadership. New Zealand is truly a natural paradise on Earth: the task of Labour is to build a workers paradise in New Zealand.