In 1991, the then National Minister of Finance Ruth Richardson delivered what she termed the “Mother of all Budgets”. Opponents called it and the socio-economic effects that it had on New Zealand “Ruthenasia”. Such was the push back that when National was returned to office in 1993, it lost all but one of the 18 seats in its majority victory over Labour in 1990.
33 years later – as the cost of 5,000 public service employees having lost their jobs since October last year and another 1,000 expected to lose their jobs in the coming months – mounts, I have this feeling that the 2024-2025 fiscal budget will in many respects be like the Mother of all Budgets was in 1991. It will be crude. In their bid to be able to fund tax cuts the Government is determined to reduce the public service working in Wellington and other main centres by 6,000 jobs or more. To justify these huge cuts in staffing of ministries that the coalition have a distaste for, funding has been cut to environmental, health, education, social welfare, conservation and others.
But the biggest cuts might still be to come. Although the Government has achieved most of its stated 6,000 public service jobs being cut, the political parties wielding the power are being urged to go even further by their donors. To appease the hard right A.C.T. and New Zealand First parties – the latter having completely abandoned its socio-economic pragmatism of old – programmes that support minority groups such as the L.G.B.T. community have been shorn completely.
And it is all to appease the donor class of National, A.C.T. and New Zealand First.
So why does this have the ominous feeling of Ruthenasia Mk 2? For answers, we need to first look at Ruthenasia Mk 1.
By the time Labour left office in late 1990, it was deeply unpopular for its market reforms. It had also failed to disclose an apparently significantly larger than admitted fiscal debt, which Mrs Richardson was determined to eliminate as fast as possible. Being on the hawkish conservative wing of National – more in A.C.T. (whom she later joined) territory – it didn’t bother her that significant numbers of people would be faced with financial misery with her cuts, which are listed below:
- All social welfare benefits were cut – in some cases by up to $27p/w
- Universal payments for family benefits were completely abolished
- User pays were introduced across hospitals, schools and services
- Public services were essentially devolved into companies under Government contract
If this does indeed turn out to be the second coming of Ruthenasia, will Minister of Finance Nicola Willis – who I originally thought several years ago would be a fiscal moderate – find herself bedevilled by past ghosts, and a possibly shortened ministerial career? Ruth Richardson lasted one term as Minister of Finance and resigned in 1994 after watching her party’s Parliamentary majority get slashed to a single seat in the 1993 election. New Zealanders are starting to awaken to the fact that neoliberalism has been a disastrous failure here and that some urgent tax reforms of the sort National are not prepared to contemplate – let alone undertake – are badly needed. A good many New Zealanders also, whilst being more conservative than Labour would like to admit, are quite repulsed by the reckless slash and burn tactics of this Government. How much more slash and burn would it take for them to hit the streets en masse?
Many of the aforementioned aspects of Ruthenasia Mk 1 are appearing again in 2024. Kainga Ora, which is the primary Government housing provider is in the spotlight after a poor review and commentators are suggesting it should be scrapped; the $5 prescription fee that Labour abolished last year is coming back; widespread cuts to social welfare services and benefits have already been announced with details expected on Thursday.
I could of course be totally wrong about this Government. National has the weakest leader of the three political parties in the coalition and it is possible that Mrs Willis may have thought about how to sugar coat the fiscal ruthlessness of the last few months. Whether her party’s coalition partners are tolerant of the coming budget will be another story altogether.
Leftist Kiwi Writes 