Budget 2021: Heather du Plessis-Allan - Labour's timid and cautious approach

PM Jacinda Ardern reveals her proudest moment of Budget 2021 and hits back at the critics. Video / Mark Mitchell

OPINION:

Unless you're a beneficiary, that was a forgettable Budget.

There were no surprises, nothing significant for Kiwi workers, nothing worth mentioning for Kiwi businesses.

Pharmac got less than half what it needs to buy the medicines it wants for sick Kiwis.

There's money for housing, health and education but by now we're all a bit underwhelmed by big spending promises in those areas. It's easy to pledge millions, but good luck getting those dollars out the door. KiwiBuild showed how hard it is to build, and too much of the $1.9 billion pledged for mental health two years ago remains unspent.

If this Budget is remembered, it might be in decades to come when we see the impacts of the intergenerational welfare dependency it could well reinforce. That's always a possibility when the dole pay packet creeps closer to low earners' pay packets. Why work a full week - shelling out for parking and petrol and lunch - when you can have your week to yourself and end up with not much less in your pocket?

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It might also be remembered for another reason: Australia.

Through sheer bad luck for Labour, the Australians delivered their Budget just a week before ours and the contrast couldn't be greater.

Tax breaks for businesses, tax cuts of around NZ$1100 for workers, a promise to bring back migrant workers to pre-pandemic numbers.

Not only did our Budget deliver nothing for business and nothing for workers, but it came just days after a pre-Budget speech pledging migration would never return to pre-pandemic settings.

The Australian Budget is ambitious and bold, making Labour's look timid and cautious.

To be fair, part of the reason for that is that the Australians are in a different stage of the election cycle to us. This is Labour's first post-election Budget so they can afford to do the nuts and bolts stuff for their traditional voting base and save their big spending up for a few years. In Australia, they're not far off calling an election, which explains the relative generosity.

But regardless of the political cycle, the Australian Budget seems a better way to approach economic recovery. They're giving their businesses the tools they need to grow - extra workers and permission to keep a bit more of their own cash. Our businesses are begging for at least one of those things - workers - and they're being told no.

Finance Minister Grant Robertson reading his Wellbeing Budget 2021. Photo / Mark Mitchell

Apples hang unpicked on trees, courgettes are rotting on the ground, one supermarket is apparently 50 short of staff, a mussel farming company would take 100 workers, we're told, but they can't find them. These businesses are being told to do the same with fewer workers and, by the way, lift wages while they're at it.

Take the contrasting budgets and throw in our Government's recent wage freeze and you have the right mix to create a potential brain and brawn drain across the Tasman. Not only is that a risk if Australia starts firing in sixth gear, while we fumble around in third or fourth trying to adjust our wage and migration settings, but that pay freeze two weeks ago sent workers a signal that middle-incomes won't be going up much in the near future. Regardless of whether pay actually does stagnate or not, that's the message plenty heard and the Budget could have - but didn't - reverse it.

So, while the Government stops new migrant workers coming in, it might find it loses Kiwi workers to Australia, who leave frustrated at waiting for a pay bump the boss can't yet afford or burnt out covering for workers the boss can't bring in.

It's now widely accepted Treasury's forecasts in the Budget are so rosy they're bound to be wrong: house price inflation hitting an almost perfect 0.9 per cent next year, interest rates low for years, economic growth hitting 4.4 per cent.

But how we get there is anybody's guess. The Budget gave us no clue.

So it's not so much what was in the Budget that hit the bum note this week, it's what wasn't in it.