22 May 2008

The Budget!

All the fuss is naturally about the tax cuts, but, being the theorist, I was drawn to Cullen's words in the closing passages of his speech (which you can view in full on the Beehive website):
"I am conscious of the honour that I have in being the first Finance Minister since 1944 to present nine successive Budgets to Parliament. The connecting thread throughout those nine Budgets has been the twin themes of security and opportunity, those ideals which lie at the heart of our national identity."
Was that the only way he was able to say that he must be conscious that this is probably his last Budget?
Whatever the case, and as I don't like to gaze into crystal balls, the important matter is that we are now getting into a phase of nostalgically assessing the Clark-Cullen years as a phase in our ideological evolution as a nation. No matter how cynical you might get about the tax cuts etc, Cullen has to be acknowledged for providing a steady and responsible pair of hands at the fiscal tiller. He has consistently delivered surpluses, retired public debt, saved on our behalf - and still found room to spend up large on the public services that we all thought were going south (as far as Antarctica) in the 1990s. He set aside money to help fund NZ Superannuation, he set up Kiwibank, he steered Working for Families (a form of tax relief by horizontal redistribution) and, for all its worries, he created KiwiSaver. Quite an achievement, really, and all based on moderation and on hope and investment for the future, as well as spending for the present.
The Third Way at its best! I think that History (his own discipline!) will judge him kindly.
Cullen was alluding in his speech to Walter Nash, who was Minister of Finance in the first Labour Government. After winning the 1935 Election, Labour "immediately nationalised the Reserve Bank of New Zealand, shifting control from private bankers to the minister of finance. Guaranteed prices for butter and cheese were introduced and a State Advances Corporation Act provided cheap loans to farmers and stimulated house-building. State salaries, reduced in 1931, were restored to their former levels, pensions were raised, the education vote was increased, and free milk was provided in schools. This increased expenditure necessitated increases in income and land taxes."
['Nash, Walter 1882 - 1968'. Dictionary of New Zealand Biography, updated 22 June 2007: Link]
And of course they passed the Social Security Act 1938.
Are the themes of Nash's term as Minister of Finance comparable to Cullen's?


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