Political Roundup: Has Labour blown the Budget?

Democracies require strong opposition parties, but the Labour Party’s response to the Budget has been relatively weak. Has Labour being snookered by a Government positioning itself to win over centrist voters?

Some of the strongest critiques of National's Budget have come - not from Labour - but from political commentators and journalists. See, for example, Duncan Garner's scathing column, National's trying to buy this election - and they're paying with your money.

But in this, Garner also details how much of a problem the Budget is for National's opponents: "this Budget has left Labour scraping around desperately for a negative. Oh yeah, a cleaner on the minimum wage takes home just $1 extra a week. That's going to get boring by the time we sit down to this weekend's Sunday roast. That's all Labour could find. What about the single mum, Cherie, on a benefit of $35,000 with three kids? She'll get an extra $160 a week in various payments. That's hugely meaningful. It's a trolley of groceries. Every week. That should scare Labour. Cherie was Labour's voter before Thursday. Now who is she voting for? National has shamelessly raided Labour's cul-de-sac."

Tracy Watkins suggests that Labour is worried: "It pushes even further into Labour territory. Labour is tearing its hair out. National's last Budget dived deep into Labour's heartland by raising benefit levels by $20 a week, the first increase in decades. The big-ticket items in this Budget are all about low and middle-income workers - using Labour's one-time flagship policy Working for Families - boosting public services and tackling child poverty. It's all about the battlers, in other words - once Labour's blue collar core. There was barely a nod to National's more traditional constituency of high-income earners, who do best out of the tax threshold changes but not obscenely so."

And, according to Watkins, the Budget now makes it more difficult for Labour to come up with its own spending plans: "It boxes Labour in on spending. Little has already pledged to honour the boost to Working for Families and the accommodation supplement if he is in power and is non-committal on the tax threshold changes. That adds up to a $2 billion raid on spending Labour might have otherwise committed elsewhere" - see: Here are the numbers, what about the vision.

Similarly, Audrey Young says Labour's own families' policy will be hard to put together: "The family income package presents a challenge for Labour because it has to come up with an incomes package quickly. It has to do so in a way that does not disappoint too many voters who will already have mentally banked the promised gains in the Budget to 2.1 million income-earners, superannuitants and students" - see: Budget moves leaves Labour standing alone.

See also, Stacey Kirk's Steven Joyce slams cash-laden briefcase on table - no room for a sly envelope. She says that, unfortunately for Labour, "Nearly every voter will have banked the changes to their income as a done deal, even though it only comes into effect in April, next year. Many people will be expecting any promise between now and September to be on top of what was revealed in the Budget."

Possibly some of Labour's stronger critiques of the Budget are still to come, as the party finds further flaws - see Stacey Kirk's Govt's income package leaves 20,000 families with one child worse off: Labour.

Labour's upcoming families package

"How can Labour respond?" asks Alex Tarrant in his column, Labour has been handed a campaign roadmap by Joyce's election year Budget. He says "Just as Labour's response to National's housing policy is 'we'll build more than you', the clearest response to this Budget's centre-piece is looking like, 'we've got a bigger families package than you'."

Furthermore, "It seems Best Start will be the backbone for Labour's response to this part of the Budget. When it lost the 2014 election, Labour put all policies under review. Only a handful have been re-announced to date (or new policies announced). Best Start isn't one of them. Yet. But you can bet that Labour is head-down figuring out how to boost the policy further. A Better Best Start policy. One that will target the lowest income earners and beneficiaries as well as families."

And for conformation that Labour will indeed announce a policy that trumps National's Working for Families increases, see Nicholas Jones' Labour plans to release its own fiscal package. According to this, Andrew Little "indicated there would be greater increases under Labour's plan, saying WFF was a more targeted way to get support to where it was needed most."

Labour should also clarify the circumstances under which it might give its own income tax cuts once in government, and how it could configure them in a way that wouldn't benefit the rich. After all, Labour is opposing National's tax cuts on the basis that the cuts are disproportionately beneficial to higher income earners. But when Labour has given tax cuts in the past, this hasn't been a problem for the party.

David Farrar explains: "Look at Labour's 2008 tax cuts package. It gave someone on $20,000 an $1,130 tax cut and someone on $100,000 would have got $2,870. Yes Labour's 2008 tax cuts package would have given a three times larger tax cut to someone on $100,000 than National's 2017 package does. It is ridiculous to argue the tax cuts are not targeted at lower income workers enough" - see: Greens vote for National's Budget ().

Part of Labour's problem is that they - along with the Greens - have backed themselves into a corner by adopting their Budget Responsibility Rules framework, meaning they have few options for adopting substantive alternatives to National's fiscal settings. For more on this, see my earlier column, Have Labour and the Greens sold out?.

Labour-Green unity tested

National has not only made things difficult for Labour, but also for the other opposition parties. The Greens, in particular, have added to Labour's stress by deciding to vote for National's Budget reforms to tax changes (along with every other party in Parliament, bar Labour).

This happened very quickly, and with little warning for Labour. According to Audrey Young, "If the Budget seemed like smart politics at 2 pm when it was clear National had made yet another raid into Labour territory, by 7.30 pm it had turned into a work of sheer genius when it was clear the Greens were going to support National's tax reduction law" - see: Budget moves leaves Labour standing alone.

Young sees this breaking of ranks as significant: "With the election only four months away, the Greens supporting the centre-piece of the National Government's Budget and Labour opposing it is an entirely different context. It undermines the carefully crafted measures both Labour and the Greens have struck to co-operate where they can and to gain the confidence of voters."

Unsurprisingly, leftwing activists expressed their upset on social media and the blogs. For example, Labour Party activist Greg Presland blogged a response at The Standard, saying that "It appears the Labour Green Memorandum of Understanding did not work as well this week as it was intended" - see: What the feck Greens. Presland suggested this raises questions about the Greens' orientation to the Labour Party, because in voting for the Government, it "brought back memories of 2011 and 2014 when late during both campaigns the Greens dropped hints that they could go into Government with National in the dying stages of each campaign. Labour and Green support then dipped. You have to wonder what was going through the collective Green caucus mind as it decided to support the Government's proposal. There were plenty of reasons for it to oppose."

It's not that Labour also needed to vote for the Budget's tax changes, although Mike Hosking suggests that would have been an idea - see his video: Mike's Minute: Classic example of Labour's woes. But for two parties that are campaigning as allies, some voters will be disturbed that Labour and the Greens didn't have a coordinated response.

Finally, to see how cartoonists are portraying Labour and the party's challenges in 2017, see my blogpost, Recent cartoons about the Labour Party.