Jane Clifton: Hekia Parata and the Budget burble

by Jane Clifton / 09 June, 2012
Without enough teachers, how will children learn to balance Budgets?

One of the great things about going to school is learning to count. Some people learn to count so well they end up working for the Treasury, or the Ministry of Education, or the Minister of Finance’s office and get to count really important things. Sadly, however, some or all of the above ran out of fingers and toes in the run-up to the Budget, and got the new teacher-pupil ratio policy wrong. Or, just as worryingly, they got it right, and it really was the intention that some schools would lose up to seven teachers, but belatedly realising the severity of such a cut, they are retrospectively pretending to have got it wrong. Either way, it underlines a curious new development in the nature of Budgets under this Government: they are no longer set in concrete.

This is the second time a Budget policy has been announced, complete with costings, only to be reneged on just days after the Budget reading. Last Budget, a big grant to a single Pacific Islands development agency seemed to fall into a heffalump pit before the ink was even dry, and after quite a lot of controversy and mumbling, it suddenly became a contestable fund. This Budget’s teacher-pupil ratio was subject to on-the-hoof amendment by the Prime Minister on his BlackBerry en route to Parliament from the airport. But to what? “We have a contingency plan,” burbled Education Minister Hekia Parata, “to facilitate transition options for schools that are in the 10% group whose impact of the range of policy changes is greater than the net loss or gain of one teacher.”

“This is good news!” she added later in Parliament, after the Opposition had comprehensively eaten her lunch for her. The eventual explanation was that officials had miscalculated the pattern of teacher allocations as it affected such subjects as art, cooking and woodwork. The Government has now ordered a new number-crunch to ensure that no school loses more than two teachers under the new ratio policy. But where that leaves the Budget-announced saving of $42 million nobody knows. All of which raises the question: how much else in the Budget cannot be relied on? Actually, the wider issue is that Budgets as we conduct them are hopelessly anachronistic – the more so given the uncharted new trends in the global economy.

Governments put themselves under ridiculous pressure to make both sweeping and quite trivial funding decisions across every single state activity, all at once, and then behave as though it had been couriered down from Mt Sinai after divine inscription, when we all know it can’t possibly be the last word on any subject. It’s great political sport to ridicule the Treasury for the inaccuracy of its forecasts, but to borrow an injudicious phrase from Finance Minister Bill English, it can only guess. A minor fluctuation in actual growth compared with forecast growth – and there always are such fluctuations, and not always just minor – makes or breaks future surplus/deficit projections.

A Greek tragedy in the great Euro-shemozzle could render all our projections moot. And even if we do as well as the Government projections suggest we could, about a third of the forecast growth is supposed to come from the Canterbury rebuild, which, although we must take anything we can get, is hardly the sort of growth from which great leaps in national prosperity are launched. The value of Budgets as we conduct them is now purely political. The Government gets to detain the media and financial analysts for a couple of hours and have a go at indoctrinating them. And the Opposition gets a concentrated run at critiquing the less-felicitous Budget items in Parliament and in the media. And then almost none of the above happens exactly as announced anyway.

Judged as the shouting match it really is, then, this Budget has not exactly been a battlecry of triumph for National. It has trodden a wisely careful line between spending restriction and the need not to depress the economy further, but it has yet to produce any growth promoting strategies. In the areas it really needed to provide strong salesmanship, it fell down badly. The education sector’s funding reorientation was the most obvious. The move to improve teacher quality needs the tenderest handling, given the prickliness of teachers and principals, but any bridge-building Parata has done was imperilled by the shock of the miscalculated ratios. On the assets-sales question, the Government hasn’t even come close to selling or defending the fiscal rationale of its pending partial floats of energy companies. The Future Investment Fund, which will use the proceeds for good works, also seems rather vague.

Some of it has been earmarked to fund previous commitments, from the bottomless pit that is KiwiRail to the up-do of Government House – hardly projects to mollify, let alone inspire the majority of voters who disapprove of asset sales in any guise. Although the long-range intention is to use the fund to boost research, education and the like, it’s a “jam tomorrow” sort of deal. Also curious is the somewhat belated decision to gut the Families Commission but not actually abolish it. The research-andadvisory body set up to humour Peter Dunne has been a well-meaning example of the factory-programmed response of most politicians to a perceived problem: set up a ministry for it. Labour wants some version of a ministry for children. Such agencies can at best wield only nagging power.

At worst, they duplicate research and general hand-wringing that has already been done by numerous other state-policy analysts, while sucking up funding that would be better spent directly on the struggling families or children concerned. But no, a small portion of the commission’s $30 million-plus budget is going to schools, mental health services and the like, but most will go to yet another new agency, which will have the job of evaluating social policy and research. Which, for pity’s sake, is what the commission was already doing, and also what the Ministry for Social Development was already doing, along with the ministries of Education, Labour, Maori Affairs and the Treasury, plus sundry task forces and committees, all of whom will doubtless continue to do such research and analysis so as to give the new agency something to analyse. Analysts, analyse thyselves. But the Budget’s crowning curiosity is the nobbling of a tax credit for children who do paper rounds. Talk about acting without fear or favour. Or common sense.

This is one of those petty decisions that strikes at the Kiwi heartland. It’s the right of every child to be criminally underpaid to slog around delivering papers and junk mail in all weathers, so as to demonstrate sufficient glimmer of a work ethic to guilt one’s parents into subsidising the longed-for skateboard, pony or whatever. The Government is grabbing back the $14 million those children earning under a certain amount per year can claim back, in the way of the refund of their tax, because, it says, it has meant far too much paperwork for employers. Given that these employers typically pay kids peanuts, it’s hard to share the Government’s sympathy for this crushing burden. And how short-sighted.
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