The Budget to win last year’s election

This is the Budget to win last year’s election. Last year’s undertakings overhang the next two years’ ambitions. In 2002, as the next election looms, Michael Cullen will be offering voters less than did Mr Micawber himself, Sir William Birch, last year.

Dr Cullen has turned on its head the age-old electoral Budget wisdom that a government takes the tough decisions in the first year, steadies in the second and dishes out lollies in the third, just in time to seduce voters.

In that third year, he has budgeted just $575 million of the total $5.9 billion cumulative total new spending he is allowing his colleagues. That is little more than half what he might dished out if he had drip-fed the new programmes evenly over the three years.

Instead, Labour is banking on delivery of last year’s promises to create a Labour-friendly climate. The spending already committed on Helen Clark’s seven “credit card” pledges looms large in this coming fiscal year’s spending and squeezes the options for future years.

But that is in keeping with Labour’s clearly enunciated strategy: to make the policy and tonal shift in the first 12 months and then settle into “no surprises” conservative management of the new status quo.

In fact, the Budget itself demonstrated the “no surprises” principle. Orchestrated announcements and speeches over the past month and particularly the past two weeks extracted in advance the excitement from yesterday’s document.

Gone are the breathtaking revolutionary strikes of Sir Roger Douglas, the swingeing cuts of Ruth Richardson, the erratic swings of the Bolger-Peters coalition and Sir William’s dour tinkerings.

Instead we got in yesterday’s document the two big themes announced far in advance: “closing the gaps” between Maori and Pacific islanders and others (though in places in the Budget the “gaps” have been seamlessly expanded to cover the whole of the rich-poor divide); and boosting “knowledge economy” activities. Plus, of course, the traditional Labour preoccupations with health, education and housing, though rather modestly by the standards of the Kirk Labour government of Ms Clark’s and Dr Cullen’s early-1970s youth.

Welcome to “no-surprises” predictability – which is intended to bolster another theme, “restoring trust in government”. The result is that the Budget is close to politically neutral.

The “ordinary decent hard-working people” evoked by Ms Clark in her speech in Parliament following Dr Cullen’s and declared the focus of the Budget by Jim Anderton will in vain scan it for goodies and grenades directed straight at them. Likewise, business – apart from house-builders who get to turn Mark Gosche’s state house dream into bricks and mortar and those who can snare some of Mr Anderton’s research and business development spending – by and large will not be scarified or delighted.

The grenade-throwing has all been offstage: the cigarette tax impost shuffled out of the way weeks ago, the shock already fading; the harpoons in business confidence also outside the Budget framework. This government is not bereft of surprises, even shocks. But not in a showcase Budget, thank you.

That leaves limited flesh for the National party part of the opposition to get its teeth into. ACT, free at last to go for a Finance Minister’s jugular after three years propping up National, can rain arrows down from the heights of purist Douglas-Richardson orthodoxy of tax and spending cuts. But National’s past spending and current grope for the centre leave it with niggles rather than nukes in its arsenal.

But will it work with voters? That is a moot point. But the “front-end-loaders” might note this disturbing trend: that modern electorates bank the goodies and then ask, “What’s next?”

“What’s next” will be the challenge for the next two budgets. It will also be a challenge for the coalition. Dr Cullen’s front-end-loading lays the government hostage to unfulfilled ambitions that will intensify as ministers bid for pet projects from October onwards. Unemployment, for instance, is projected forward at levels intolerable to the Alliance. The Greens’ ambitions, well-pursued in this Budget, will not abate.

And that is if the economy goes well and spending “creep” – incremental unplanned increases in programmes once set in train – does not go faster than allowed for. Tensions will be tougher if the budget numbers fall short of Treasury estimates.

There is another hostage to fortune, one the National party will target. That is Dr Cullen’s “pre-funding” of pensions.

In this budget there are projections over a 50-year horizon: an “heroic” exercise, to borrow a phrase that got Dr Cullen into trouble with his coalition partner a few months back. Labour won’t be in the government 50 years and his fund will be a tempting loot for some different government to raid or turn over to individuals through tax cuts.

Just make sure you are under the tap at the time.