The grin all over Bill English's face said it all.

Yesterday's post-Budget speech in Parliament was the happiest he has been since he became Prime Minister in December.

That is because it was largely the election-year Budget he would have delivered as Finance Minister.

It is a Budget that makes life better for many low and middle-income Kiwis and it makes life worse for the Opposition.


The design of the $6 billion package to lift incomes over four years makes it difficult for the Opposition to complain.

Under the package 50,000 fewer children would be in low-income households (as measured by the OECD) at April next year - a 30 per cent reduction in that particular measure of child poverty.

Labour might want to do it differently and to affect more people but there are political risks in political parties making the perfect package become the enemy of a good step forward.

In a surprising move last night, New Zealand First and the Greens decided to vote for the package for those reasons.

The Salvation Army has even called it a step in the right direction and Child Poverty Action Group says it is a small improvement but not enough.

Certainly Opposition claims that it is a tax cut for the wealthy in disguise is not sustainable.

That is unless they think someone on the average wage is wealthy.

Steven Joyce, Bill English and Andrew Little will get the same tax cut as someone on the average wage.


Someone on the average wage of $58,900 will get the same tax cut as someone earning twice the average wage or three times the average wage - $20 a week - as will anyone earning over $52,000.

But few of them will benefit from the Working for Families or accommodation supplement increases.

Lower income-earners get less from the tax cut, $11, but more from the Working for Families and accommodation supplement increases.

Rather than being a lolly scramble, it is more of a pick and mix.

There is a group who will get nothing in tax cuts, 500,000 who got the independent earners tax credit (who will get only $1 week) but may well qualify for an increase in the accommodation supplement.

And for a few who may be worse off, there will be a $2 million transition fund.
Labour will be spending the next few weeks at the drawing board working out how to better the deal.

But until they can do that without reducing the extra that has been promised to millions of voting households in this Budget, English's grin will be lasting a while.