Budget 2015: Bill English's Robin Hood Budget a surprise

Almost half of arrivals and departures in the year to April were Kiwis travelling for holidays, on business and for family reasons. Photo / Thinkstock

Budget 2015 is one of the most counter-intuitive of the seven that Bill English has delivered as Finance Minister.

A centre-right Government that is regularly accused of looking after the big end of town has delivered a Budget that takes from the rich and gives to the poor.

The contrast is most stark in the three big surprises in the Budget and in the underlying result - a significant deficit this year and a small surplus next year, when two surpluses had been promised.

To make sure it can forecast that small surplus in 2015/16, the Government decided to stop giving one of the suite of middle-class welfare payments initiated in the mid-2000s (interest-free student loans, KiwiSaver and Working for Families).

The move to drop the $1,000 kick-start payment for KiwiSaver will save $175 million in 2015/16.

Without that, the Budget would have been in surplus by $1m in that year. To use John Key's analogy, that would be like trying to land a 747 on a speck of bacteria on the head of a pin.

Then there's the new customs levy of $6 for departures and $16 for arrivals. Almost half of arrivals and departures in the year to April were New Zealanders travelling for holidays, on business and for family reasons. They are self-selecting as wealthier and are essentially paying a new tax, raising $100m a year.

Without this, the budget would definitely have been in deficit for two years longer than National promised.

Yet the Government was still willing to spend $200m a year from 2016/17, increasing the incomes of poor families earning less than $36,500, by giving them up to $25 extra a week through the benefit system and Working for Families.

This really was taking from the rich and giving to the poor, instead of running surpluses. Why?

English is the driving force behind the Government's investment-led approach to trying to reduce the long-term costs of poverty and is building a powerful argument to convince centre-right voters.

He argues spending money now to educate, stabilise and reorientate a single mum or a young unemployed person could save money later on.

On Budget Day, he used the example of the 600 new children a year who come to the attention of the Child Youth and Family Service and who have been supported by benefits for 40 months and have had one parent in contact with Corrections.

By the age of 21, at least 40 per cent of this group would have been on a benefit long-term and by 35 a quarter would have had a stint in prison.

The Government's actuaries say the average cost of each of those children is $320,000. Some will cost more than $1m.

Any attempt to invest in mentors or better housing or add more income could save taxpayers over the long run.

It's what Robin Hood would have said if his band of merry men had been actuaries.

English and his own Little John have only scratched the surface. The Finance Minister acknowledged the gap in incomes between those at the bottom and the average was as wide as he wanted it to become.

More investment is needed and the long-term pay-off could be substantial.

All that's needed is for Robin Hood and Little John to push on with more of the investment-led approach.

It would seem counter-intuitive but perfectly rational, if Budget 2015 is anything to go by.