Steven Joyce’s first Budget and National’s last before the election could have delivered a much bigger boost to low income families and infrastructure spending – if they had really wanted to throw the whole kitchen sink at the electorate.

In the end, Joyce and the Budget’s true guardian, Bill English, opted for a package of compassionately conservative spending with the emphasis on the conservative as much as the compassionate. It was only a small kitchen sink, and aimed mostly at poorer working families with big rent bills.

That pivot into territory usually reserved for a centre-left Government repeats the Budget day moves of the Key Government, but there wasn’t too much that was surprising or big. The family incomes package does deliver over $50 a week extra for the lowest income families with children who live in expensive rentals in Auckland, but middle income New Zealand won’t receive nearly as much, and much lower in percentage terms.

Joyce and English could have done much, much more if they had been desperate for re-election, and they could have done it without overloading the Government with debt or spooking New Zealand’s creditors.

The dividends of stronger economic and population growth are now pouring into the Government’s coffers and its net debt position is improving rapidly. The economy will be $23.9 billion bigger in five years than was expected as recently as December.

Budget 2017 forecast the surplus will rise from $1.6 billion in the current 2016/17 year to $7.2 billion by 2020/21, even after the $2 billion a year family incomes package and an increase in the operating allowance for other spending of an extra $10 billion over the next four years.

Even Joyce pointed out in his lock-up presentation that the fall in net debt to under 20 percent of GDP by 2020/21 would give any Government in power then to do more to ramp up operating spending or capital spending, and still reach the Government’s net debt target of 10-15 percent of GDP by 2025.

Instead, Joyce emphasised the need to get debt down in case of another natural disaster and rejected suggestions the Government had delivered a lolly scramble in this Budget.

Joyce was right about that.

The Budget’s measures of fiscal stimulus, which cut through the noise of the growing economy to say how much extra spending is being pumped into the economy, show there’s actually been a tightening for 2016/17 (0.9 percent of GDP), and only a very small loosening in 2018 (0.3 percent of GDP) and 2019 (0.4 percent of GDP) relative to the half year forecasts. It is only in 2020 (1.4 percent) and 2021 (1.2 percent) when the stimulus increases more substantially.

Joyce told the news conference he hoped after September 23 to get another chance to revisit the capital spending plans and another chance to address tax rates from 2020 when he thinks fiscal conditions will allow.

Meanwhile, National will have to convince a restive Auckland electorate that it has done enough with its infrastructure spending to deserve re-election for an unprecedented fourth term in the post-MMP era. Some Aucklanders may not agree, given a housing shortage of 40,000 and climbing, escalating travel times, overcrowded hospitals and schools, and decades more of waiting for a train to the airport.

Joyce and English could have used more of that economic dividend to do that, but chose not. Perhaps it shows their confidence they can win without it.

Or it may have been the biggest political misjudgment in this National Government’s life, by ending it.

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