Brownlee's budget blowout | The Jackal

19 Dec 2012

Brownlee's budget blowout

Today, the NZ Herald reported:

The Government has been accused of being a Christmas Scrooge and increasing petrol prices in order to protect its promise to get back into surplus in 2014-15.

Gerry Brownlee yesterday announced a price rise of 3c a litre at the pump for the next three years on petrol excise duty, and an increase in user charges by the same amount.

The tax is expected to raise a net total of $300 million over the next two financial years and will be dedicated to fund the roads of national significance under the existing timeline.

This is yet another economically detrimental move by a government that obviously doesn't have a clue. Let's be frank, there are no roads of national significance that the National government has undertaken. Investing in roads that don't have an effective cost to return ratio is not significant, it's stupid.

But Finance Minister Bill English conceded at the half-yearly opening of the books yesterday that without the extra excise, the tiny forecast surplus would have shrunk altogether. However he insists the excise was driven by the need to meet the roading plan timetable, not his surplus.

The May Budget forecast a $197 million surplus by 2014-15, which shrank yesterday to a mere $66 million.

So they stuffed up the budget yet again, this time by $131 million... Talk about incompetent!

Now that the tax cuts for the rich have not boosted the economy as was promised by John Key and with budget blowouts for Gerry Brownlee's stupid roads of little significance, National is just going to tax the people more to make up the shortfall.

Earlier this year, Gerry Brownlee claimed that the hugely expensive roading projects he was undertaking "would focus on supporting economic growth" but he and the rest of the neoliberal morons fail to understand that higher fuel costs will inhibit economic growth. Therein lies the sheer stupidity of Nationals policy, that increased taxes to build stupid roads will mean less economic growth which will negate the main reason to build the roads in the first place.

Gerry Brownlee also said that National would use the $12.3 billion to provide people with a range of transport choices, while being entirely averse to investing in public transport and particularly Auckland's inner city rail loop. This is despite that project showing a positive investment to return ratio meaning that it would pay for itself.

The timing of the announcement is also a conceited move to try and limit any public backlash. Increasing petrol costs by 3 cents a litre over three years for an increase in tax of 9 cents per litre by 2015 will be deeply unpopular and the announcement has been made just before Christmas to ensure people are distracted by the festive season.

National knows this new tax will be hugely unpopular, and will be working hard to reduce media coverage. They'll be happy with the limited exposure so far with a small article on page five of today's NZ Herald not even spelling out the total cost of the increased charges.

In comparison to the month long media furore the fifth Labour government received when it proposed to raise the tax on fuel by a similar amount, which effectively lost them the 2008 election, there has been a disproportionate response to National's fuel tax increase. It's entirely pathetic coverage and shows that the MSM is biased and still in the back pocket of big business and those who represent them, the National party. Unfortunately the people are not being represented at all.