Key Points:

Disappointment is too strong a word.

After all for two decades our policymakers have only played the game on a small corner of the huge field of social and economic possibility so expecting a challenge to the prevailing economic orthodoxy would have been naive.

Still, this Budget makes me sad. When before has the workers' party been so endowed with riches and surrounded by such potential? Even the projected cash deficit has bloomed into a $2 billion cash surplus and there are people and causes crying out for that money.

Of course small increases in school budgets and new entrant teacher numbers are good news and some relief will come to low paid workers in the aged care and disability sectors. Other health workers do not get funds to address critical workforce needs, making further industrial action in hospitals likely.

The money for IRD to investigate housing transactions is excellent. Let's hope the implied threat to tax capital gains on investment housing as income is a real one. Even losing a few court cases could further the momentum towards a proper capital gains tax.

But the real risks to working people's incomes are not even on the agenda. Our high-interest/high-exchange rate vice will keep imports cheap, threaten local export and import-substitution jobs, and keep the hot money flowing in. Our balance of payments deficit is so huge that even WTO rules would allow us to impose a tariff to reduce it.

This means that before workers have made real gains from the boom and the tight labour market they are being kicked again by the free market. This Budget has not protected them. Recent manufacturing job losses and rising bankruptcies are no accident. They are an intended consequence of trade and monetary policy.

The chance has been missed to extend the $60 in-work payment to all low-paid families with children. Workers who lose their jobs as the economy corrects stand to lose that as well as their weekly wage.

For workers who can afford a 4 per cent KiwiSaver payment the $20 top-up will be welcome. Of course those who earn below $500 a week get less.

Compulsory employer contributions are a double-edged sword. They will help those who make it into the scheme, but workers are expected to lower their wage demands to off-set the cost to employers.

Our highest rates of poverty are among the young, not the old. Wouldn't an investment in our children today give a much better return than superannuation funds whose overseas owners want at least as much as the people whose savings they invest?