Steven Joyce's Budget spend-up

Steven Joyce’s first Budget fires the first shot in an election year spend up.

It’s hard to quibble on the Budget’s focus on spending on public services, social investment, and infrastructure. It’s also hard to take exception to tax and spending initiatives targeted at lower and middle income families.

However, Federated Farmers is disappointed there was no movement in the threshold for the top rate of income tax or for the company tax rate. Too many taxpayers will continue suffering the effects of several years of fiscal drag and our company tax rate runs the risk of falling behind those overseas.

In terms of the primary industries, there is additional spending for MPI on biosecurity, irrigation, and trade facilitation. These are all important priorities for farmers.

We welcome an increase in science and innovation spending but would have preferred more emphasis on building our science capability across the country, particularly in biological and environmental sciences, rather than it going to companies for commercialisation.

MFAT gets more funding for trade negotiations and international presence.

Federated Farmers is pleased to see there is also more funding for tourism infrastructure, transport and police - provided rural needs in these sectors are also looked after.

Looking ahead, surpluses are forecast to grow. As was the experience from 2005 to 2008 the temptation to spend more will grow in tandem.

Whoever wins the September election will inherit a healthy set of books but they could easily be squandered if there is a spending spree followed by a shock (as happened in 2008).

The temptation to spend up needs to be guarded against. Better perhaps for the Government to have moved more on taxes so reducing the headroom for even more lavish spending promises!

ENDS

© Scoop Media