NZPA on Budget

A very astute analysis by NZPA Political Editor Peter Wilson:

Wellington, May 23 NZPA – Post-budget best case scenario for the Government: Most people react responsibly, saving or investing their tax cuts. Inflation rises but far less than Treasury’s forecast. Reserve Bank raises interest rate by a quarter of one percentage point, says it’s because the economy is growing and has nothing to do with the budget. Families realise they really are better off, Labour fails to find anyone who says they are worse off. Petrol and power price rises caused by the introduction of the emissions trading scheme are accepted as necessary to deal with climate change. New Zealand First slips to less than 1 percent in the polls. Solo mum says “I’m voting National”. All Blacks win World Cup.

Post-budget worst case scenario for the Government: Most people spend their tax cuts, saying they don’t have a choice because GST at 15 percent is hurting. Inflation rises above 6 percent. Reserve Bank announces vicious interest rate rise and blames the budget. Families realise they aren’t better off, Labour finds hundreds who say they’re worse off. Opposition to emissions trading scheme becomes a serious problem. NZ First reaches 7 percent in the polls. Wealthy property owner says “I’m voting for Winston Peters”. All Blacks lose to France in quarter-final.

I think it will be obvious in a couple of months which scenario emerges.