Spending Cuts Loom

This week on Radio NZ's panel spoke to Dr Ganesh Nana from BERL (Business and Economic Research Limited) he spoke about the looming state sector cuts saying,

"The easiest and simplest way to get the Government's books back into any sense of balance is to get economic growth out there and that's what's sorely missing...I havn't got any evidence that we've got an unproductive public service. I'm just waiting for the facts of how much the minister is suggesting we can cut out of the public sector whilst still retaining a growth scenario and the quality of services. In 1990 we did go down the road of cutting public spending at the depth of the recession and we elongated that recession significantly and I would argue that one of the causes of our productivity problems we have now is those sorts of cuts that do impact the economy over the long term."

There you have it, an economic expert who is critical of the public sector cuts. We are still waiting for the facts, so far all we really no is Mr English is planning on at least cutting back (if not eliminating altogether) the services he deems to be "nice to have" and will be retaining (if not cutting as well) those he deems as necessary.

I'm desperately looking forward to this years budget, you can always count on budget day under National for a good ol' pace around the house saying "What do they think they're doing, am I the only one who thinks this is bullshit?"

Last year we saw tax cuts for the rich and a decrease in new spending, it looks like this year we are going to see a continuation of those tax cuts (and possibly more of them if Peter Dunne's income splitting bill goes through which it looks likely to) and severe cuts in services.

If we had any wastage in public spending I would gladly say "Yep, that money is not being used effectively, let's fix that situation." but as Dr Nana said above there really is no evidence to say that our public sector is inefficient.

All that can happen in the situation following budget day is that it's going to be harder for those who really need these services, the rapidly disappearing middle class will be pushed further back.

When the gap between rich and poor reaches breaking point a rebellion will happen.