KEY POINTS:
Michael Cullen's eighth Budget sports a fiscal money-go-round that would do a Virgin Islands tax-dodge designer proud.
Cullen has finally made good on the corporate tax cuts he has been promising - if ever so reluctantly - since United Future's Peter Dunne and NZ First's Winston Peters demanded
he slash the 33 per cent company rate to match Australia's 30 per cent rate as part of the price of their support deal with Labour after the 2005 election.
But he's siphoned some of that windfall to swell KiwiSaver accounts and reneged on the proposed "packet of chewing gum" personal tax threshold shift (if only in the short-term). He's not a tax-cutter at heart as all those New Zealanders who would rather have direct personal tax cuts know to their cost (but certainly not to the cost of the nation's coffers).
But instead of feting the Finance Minister for finally agreeing to shift the corporate rate downwards and introduce a swag of other measures that should assist New Zealand's transformation to a higher value economy, business is squealing at the way he has shafted them by siphoning off some of their tax cuts to boost KiwiSaver accounts.
I kept expecting Michael Cullen to burst into a rendition of "Advance New Zealand Fair!" given this first step towards the implementation of a compulsory superannuation scheme.
Cullen has, after all, made plenty of references to the relative fortune of his good mate, the Australian Treasurer Peter Costello, in presiding over an economy with such a sizeable savings pool that it was now bursting beyond its borders. Australia is now a net capital exporter and thus the owner of a large lump of NZ companies - while we have been reduced to tenants in our own nation.
But unfortunately Cullen rather spoilt his fiscal riff by dumping on his favourite sparring partner - business. Quite simply the business sector did not expect Cullen to claw back some of their corporate tax cut windfall - expected to be $675 million in the first year of operation - by allowing their employees to compel them to stump up for KiwiSaver accounts.
Cullen has offered employers a $20 a week per employee tax credit offset to be paid directly to them - but the business organisations say that is derisory and could wipe out a considerable amount of the expected corporate tax windfall.
The big numbers the business organisations are talking about seem rather exaggerated.
Cullen won't be around to count the plaudits when KiwiSaver accounts ultimately swell long after we have begun the long shift from a nation of debt bingers to a nation of savers.
The failure to consult - particularly with business - will hurt the Finance Minister politically despite his high-minded aim.
However, Cullen will still go down in history as the Finance Minister who had the guts to tackle savings - however imperfectly - when so many political predecessors wimped out.