June 7th 2014

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Articles from this issue:

ECONOMIC AGENDA: Cut the deficit while boosting infrastructure

CANBERRA OBSERVED: Tony Abbott faces winter of discontent

NATIONAL AFFAIRS: Greens' bid to legalise same-sex 'marriage' by stealth

SOCIETY: Why all the fuss over same-sex marriage?

EDITORIAL: Ukraine election opens door to reconciliation

UNITED STATES: The secret history of Washington-Wall Street collusion

INTERNATIONAL AFFAIRS: 400 million child brides: a global scandal

LIFE ISSUES: 'Bring it on': euthanasia doctor dares police to prosecute him

NEW ZEALAND: Families benefit from NZ budget surplus

FOREIGN AFFAIRS: Extraordinary background to new Indian PM

FOREIGN AFFAIRS: Indonesia's two presidential candidates in tight battle


CINEMA: A fantastical world suffused with melancholy

BOOK REVIEW The man who would be PM

BOOK REVIEW Uplifting perspective on ageing

BOOK REVIEW: A tale of espionage with a hidden sting

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Families benefit from NZ budget surplus

by Jeffry Babb

News Weekly, June 7, 2014

Families and children will benefit from years of tough spending curbs, New Zealand’s Finance Minister Bill English announced when he brought down the best budget in years.

Mr English said the budget should yield a surplus of $NZ400 ($A340 million), rising to $3.5 billion in four years. This is a dramatic turnaround from the deficit of $2.2 billion for the past financial year.

The budget will provide for tax credits for families, as well as for free doctors’ visits and prescriptions for children under 13.

Paid parental leave will be extended to 18 weeks over the next two years. Tax cuts could be announced before the general election in September. Prime Minister John Key says tax cuts could be aimed at middle New Zealand, which he says “pays a fair bit of tax and often doesn’t get a lot in return”.

Remarkably, New Zealanders haven’t been complaining about doing it tough. The country came close to bankruptcy in the 1980s and ’90s before it clawed its way back to prosperity.

The country has a number of things going for it. New Zealand’s farmers supply 30 per cent of the world’s dairy exports. Fontera, a former co-operative, is the industry’s giant. New Zealand is also one of the world’s top seafood exporters and a major meat exporter.

We should not overlook tourism, which is a big earner. Sky City, the casino in central Auckland, is full of Asian visitors.

The wine industry has been growing exponentially. New Zealand’s sauvignon blanc, from the Marlborough region in the northern part of the South Island, has conquered the world, and is now being complemented by other regions. Pinot Noir is grown in central Otago, also in the South Island, but in a more southerly and colder region.

Waihiki Island, less than an hour by ferry from central Auckland, combines tourism with some good food and wine.

Central Auckland is also home to many foreign students. Education is a big money-spinner.

The Asian population is growing rapidly, and some observers estimate that within 20 years 30 per cent of New Zealand’s population will be Asian. This does not seem to concern Anglo New Zealanders. However, New Zealand’s indigenous people, the Maori, are less happy at the prospect of being displaced as the nation’s second largest ethnic group.

New Zealanders pride themselves on being an egalitarian society. According to the United Nations Development Index, both Australia and New Zealand rank in the top 10. The U.S.-based Social Progress Imperative says New Zealand ranks top in a wide range of social measures.

However, New Zealand is quite unequal in terms of income. Wages were high during the 1970s, then declined steadily in the 1980s and 1990s. Many areas of towns and cities are obviously prosperous and there is little obvious poverty. Auckland’s main commercial thoroughfare, Queen Street, has a motley collection of panhandlers, but they are seldom aggressive.

Sport plays a big role in forming the national identity. The All Blacks approach the status of being national deities. It probably would expose a visitor to physical danger to say that most Australians don’t care for rugby (those who do are ex-private school boys in the two eastern-most states). It can become tedious hearing about the Sevens (rugby union) and Nines (rugby league), especially when many visitors have no interest in either.

Sport suits the New Zealand character. It’s fair (more or less), and anyone, Maori or Pakeha (i.e., Kiwis of white European descent), can — and do — excel. It is also a way for New Zealand to get noticed on the world stage.

Those with long memories will remember the mantra, “As long as we can beat New Zealand”, when Australia’s sporting stocks were at their lowest ebb following the 1976 Montreal Summer Olympics.

New Zealand has developed an enterprise culture, whereas Australia has had a long run of luck, which is bound to end. The politics of buying off interest groups can’t go on forever. Soon Australia will have an unemployment rate of 6 per cent, while in New Zealand it is predicted to fall to 4.4 per cent.

New Zealand will be running budget surpluses for the foreseeable future, while Australia will be lucky to see a surplus before 2018.

However, if we trimmed welfare spending to New Zealand proportions, we could have a surplus of $40 billion right now. We could also, like New Zealand’s current government, target spending to where it is most needed — families with children.

If the Kiwis are feeling a little proud of their achievements, they are entitled to be. They too are riding on China’s coat-tails, and have rightly judged that in the long-run it will be dairy products and food that are likely to have expanding markets. The dairy industry is making many people wealthy. It is said a dairy farmer milking 800 cows can make $1 million a year.

The people-to-people businesses of education and tourism are likely to keep expanding. With its neat towns and cities and friendly and courteous people, New Zealand seems ready to be discovered by the world’s up-and-coming generation.

Jeffry Babb is a Melbourne-based writer who visited New Zealand recently. 

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