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Even that Which We Had...

Dominated by a large income tax cut for most workers (but not students and many women workers) this year's budget was the best the National Government could afford to buy our votes for November.

Mr Muldoon described it as a "generous budget". It had to be. For despite the Government's efforts to date the economy has continued to collapse. Production has stagnated and is falling, double digit inflation is still with us, unemployment has risen officially to 38,000 including those on special work (the real figure is nearer 100,000), farming has continued to stagnate and wages and bursaries have been pushed down.

The key panacea to make us forget the real state of the economy and vote National in November was the tax cut. It was much less than Mr Muldoon's description of a "9%" wage rise. TV 1 figures on budget night showed that a worker earning $100 a week would get back $3.31 through the tax cut. For most incomes the gain is below 4%.

National are hoping that the tax cut will mean a commensurate reduction in the forthcoming wage order. They will also use it to beat down "excessive wage demands". Just co-incidentally it will come into force a month before the elections.

Students will get a 9.5% to 11.5% rise in the Standard Tertiary Bursary - next year. It hardly needs saying that the rise won't even cover inflation.

Students are also getting nothing from the tax cut. The abolition of the personal tax rebate means an end to the three figure sum most students received back from the tax man about this time of year. The effect for anyone earning less than an average of $57 a week is a rise in income tax!

The Government's novel solution to the problem of unemployment — driving married women out of jobs into the home — is to continue. About half of married women workers are part-timers. The abolition of the personal tax rebate will mean that they will now pay more in income tax. Mr Muldoon clearly outlined National's belief that married women should leave the workforce and rely on their husband's income. To make the point clearer an increase was made in the tax allowance for single income families.

The huge amount of money pumped into farming represented a belated response to the crisis in agriculture brought on by the long term trend to stagnation and falling falling export incomes. It might get a few farmer votes back from Social Credit as a side benefit.

The questions of energy and fishing were were dealt with in piecemeal fashion. There seems no clear strategy in these areas. For instance while use of imported fuels is discouraged rail freight rates are to rise substantially — pushing more freight onto the roads and increasing usage of imported fuels.

Overall it was a vote-catching budget by an unpopular Government. Ordinary New Zealanders will be paying for its excesses as soon as the elections are over. The country's economic decline demands that of either a National or Labour Government. Both are committed to preserving the dependent economy. Both have no coherent strategy to confront the economic crisis. Although this budget gives us a few crumbs its not enough. Students especially must start now to organise and demand a genuine living bursary. Next year you might not be able to afford to come back to university.

By James Morgan