The story beyond Budget Day
The news cycle for a new Budget is really quite short. The day it’s announced it’s all go, every news site is full of analysis, opinion, counter-opinion, breakdowns, and comments on Bill English’s tie. Then, the next day it’s all gone, replaced with something else primed to pique our interest.
The real story of the Budget lasts a lot longer than the day of release. The spending decisions contained within will roll out across the ensuing year, and the effects can last for years beyond that.
For instance, the 2004 Budget story was largely about Labour’s new Working For Families tax credit. Years on, this policy has completely re-shaped the financial landscape for a huge number of Kiwi families, and created a new normal for each Budget since. No matter your political persuasion, the gravity of such a move is clear: once you make a change like that to the national budget and people’s own finances it’s hard to go back.
While the Budget is a high stakes document, it’s not that easy to go beyond the headlines and the Budget Day banter and really get a handle on what our tax dollars are actually paying for. However, this week at Maxim Institute we produced a cool little web app at yourtaxtracker.co.nz, that lets you put in your income, click go, and see a personal tax receipt that shows exactly how much you’re contributing to all Government spending areas.
The other thing it points out is how Budget 2014 changes the way your tax is now spent compared to last year’s figures, so you can immediately see the increases and decreases.
Our political views, personal values, and even our own self-interest will often shape whether we think more or less spending in a certain area is a good thing. However, simply looking at an increase or decrease in spending between two Budgets doesn’t tell the full story either. For example, spending on Police has stayed roughly the same for the last five years, but if you account for inflation, the same amount of funding won’t go as far because of increasing expenses.
Conversely, a decrease in another spending area like Health may look like the Government doesn’t care as much about that service, but it could be that the Ministry has worked hard or restructured to become more efficient and save taxpayer dollars. More money doesn’t always mean a more caring Government.
In an election year, it becomes more than usually important for us to check out what the current lot in the Beehive are up to, so we can accurately assess the direction they’re taking New Zealand, and how promises from all of the other parties stack up. Take a few moments to dig beyond the story we got on Budget Day. You might be surprised by what you find.