On July 1stover a $1 billion of government cuts will start to come into effect and will be phased in over the next 3 years. This is from the 2011 budget. Therefore any suggestion that the 2012 budget was austerity-lite is just a smoke screen. The 2012 budget will go down as the budget that taxed the earned pocket money of children; student allowance removed for post graduates - making it virtually impossible for working class post graduates to access such courses, as well as an attempt by government to inform the public that the way to improve a child's education is to sack a 1000 teachers and increase class sizes. The higher education proposals were met by student demonstrations showing the volatility that exists within society. Increasing class sizes was dropped very quickly indeed when it ignited a wider public furore in the country.


The National-led government is further cutting the public services. There is no longer any pretence of allegedly cutting back office functions (whatever this is supposed to mean) as the attacks on state education and the recent Queensland fruit fly biosecurity alert exposed.

The National-led government is hell bent on getting back to surplus in 2015. However, even John Key has stated that this may not be possible because of the worsening global economic outlook and the weakening returns on exported goods. As a consequence of this gloomy economic outlook the IMF has informed Bill English, Finance Minister, that they would be looking for $4 billion from New Zealand to bail out the Eurozone if (when) the situation worsens. Not that this is a problem for English as he has stated that he will borrow $4 billion on the world markets if the IMF presents its bill!

The economic policy of the National-led government is quite simple. They don't have one! Let the market decide! With such a weak economic non-existent policy the reader may think that Labour would be “making hay while the sun shines” and be racing up the opinion polls.

Unfortunately despite a recent lift in the polls for Labour the National Party has a commanding lead. The Labour Party leadership need to advance genuine socialist policies and break with capitalism. By adopting bold socialist policies the Labour leader would begin to answer the problems of workers.

As an example the Labour leaders quite rightly point out that child poverty is a major and growing problem. The solution put forward is to have a children's commissioner to advocate on behalf of children. This will not relieve child poverty. What will relieve child poverty are socialist policies that meet family's needs that guarantee decent wages for parents and caregivers, gives families decent homes to live in and genuine access to free state education and healthcare etc. This can only be achieved through a policy of nationalisation of the commanding heights of the economy and workers democracy. Such socialist policies would capture the growing prevailing mood within society that is beginning to question capitalism and offer socialism as the only alternative.