CTU Report on Budget 2010

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(Click here for the pre-budget health papers previously found at this location)

CTU Report on Budget 2010

This is a brief report on some of the Budget highlights. There has not yet been an opportunity to analyse all aspects of the Budget so this report does not attempt to provide a full commentary. You will see that funding increases are often stated as over 4 years and we also need to factor in demographic changes as well as an inflation adjustment before we can assess real increases.

Key Points

• Forecast of 5.9 percent inflation for March 2011, considerably higher than expected, even taking the GST increase into account.
• Tax cuts were as expected the feature of the budget. The outcome is fundamentally unfair as the table below shows. Someone on the minimum wage of $26,520 gets an extra $4.13 a week but someone on four times the minimum wage or $106,080 gets an extra $43.08 a week. Their tax cut is 10 times more than the worker on the minimum wage.
• While strong constraints on government spending are still the order of the day, the government has failed to meet its self-imposed $1.1 billion cap on new spending – it has new spending of $1.225 billion in 2010/11.
• Overall the lid is being kept on the public service and more redundancies and restructurings are expected.
• Funding for the services District Heath Boards provide (hospitals and other local services) has not risen nearly enough to keep up with costs.
• Education funding has not risen fast enough to keep up with inflation. Tertiary Education appears to have a net cut in funding.
• The removal of ECE funding to the top two early childhood education funding bands for services with 80-100 percent qualified teachers and the target changed to 80 percent of registered teachers by 2012. 
• $26.7 million for the Job Ops programme to extend the programme into next year. This will double the number of placements on this programme.
• ERE - The Employment Relations Education Contestable Fund has been cut by almost 56 percent or $1.2 million – from $2.05 million to $889,000.

For the full report download the PDF file below.

Also downloadable below is a document showing how the tax cuts are widening inequality in New Zealand.

The Working Paper on Health No 3 is an analysis of the shortfall in the Health Vote compared to the CTU's pre-budget estimate of what was required to maintain health services at their current level. Working Papers on Health 1 and 2 are also viewable here.

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CTU Report on Budget 2010.pdf238.3 KB
Tax cuts and inequality.pdf199.03 KB
Working Paper on Health No 3.pdf288.02 KB