The AM Show ranks the Government on budget week

Opinion 27/05/2019

This Thursday the Government will unveil its fiscal plans for the country. So how has the Government been doing so far?  

Here's how The AM Show ranks the Government's performance:

KIWIBUILD - FAIL

  • It was the promise of 100,000 affordable homes in 10 years, but it's such a massive flop that even the Prime Minister won't utter KiwiBuild's name anymore. Only about 80 houses have been built so far and to make matters worse, the Government is buying back unsold Kiwibuild homes in Auckland and Canterbury. 

CAPITAL GAINS TAX - FAIL

  • The Labour-led Government abandoned plans for a Capital Gains Tax last month in a massive backdown. It was a policy Labour campaigned for over three elections, claiming it was necessary to tackle deepening social inequality. However, last month the Prime Minister dumped it, saying it wouldn't be an option for as long as she was leader.

SLOWING ECONOMIC GROWTH - FAIL

  • Demand in the economy appears to have softened across the board. Annual GDP growth is forecast to slow to just 2.2 percent next month. Several Government policies have also reduced investor demand in housing, including the Healthy Home Bill, ring-fencing tax losses on properties, and foreign buyer restrictions.

CHANGING DEBT TARGETS - FAIL

  • The Government will shift its debt target from 20 percent of GDP to give it more capacity. It'll change to a range of around 15 to 25 percent from 2021.The decision gives wriggle room to spend more and offer more at the next election.

TEACHER STRIKES - FAIL

  • There has been unprecedented strike action by teachers since this Government came into power. On Wednesday primary and secondary teachers will walk off the job in a mega strike. It's a dispute that shows no sign of being resolved.

BALANCED BOOKS - WIN

  • Grant Robertson continues to manage the books carefully proving to be an effective and responsible Finance Minister so far. 

LOW UNEMPLOYMENT - WIN

  • Our unemployment rate has eased to 4.2 percent in the March quarter. It hit a 10 year low of four percent in the September quarter last year.

GOVERNMENT SURPLUS - WIN

  • Crown financial statements show a surplus of $2.5 billion in the operating balance before gains and losses for the nine months to March 31st this year. The result is $329 million higher than the Treasury forecast in December 2018.

LOW INTEREST RATES - WIN

  • The Reserve Bank cut its Official Cash Rate to a record low of 1.5 percent earlier this month. All the major banks reacted by dropping their rates as well.

HOUSING FIRST - WIN

  • The Government announced a major funding boost for the Housing First programme to tackle homelessness. The money will help an extra 1000 long-term homeless people into permanent homes. It works by moving people into housing, then providing wraparound services to support them. 

Political Commentators Trish Sherson and Chris Trotter spoke to The AM Show.

You can watch the full video above.