Budget critics ignore the good news

The good news in the budget -- Treasury projections showing strong economic growth next year and 170,000 new jobs by 2015 -- is being swamped by a torrent of criticism.

Finance Minister Bill English's third budget, delivered yesterday, also showed the Government's books returning to surplus in about three years, a year sooner than expected, but that hasn't done anything to hold off its opponents either.

It is the way the money is being saved that is being attacked.

Labour says the Government is clawing back money from struggling kiwis through cuts to KiwiSaver and Working for Families instead of tackling deep-seated economic problems.

In finance spokesman David Cunliffe's opinion, the budget gets "zero out of 10, worst budget in living memory. No credibility, it's built on smoke and mirrors".

Not even Business New Zealand, which usually welcomes fiscally tight budgets, seemed to be impressed with this one.

Chief executive Phil O'Reilly welcomed the drive for "efficiencies in the public service" but said more could have been done to produce structural economic change.

He was concerned that there was no co-ordinated plan to develop skills and productivity gains.

Federated Farmers thought it was boring but said that should be seen as a compliment.

"For far too long, budgets have bribed the electorate with its own money, but here we have a sea change," spokesman Philip York said.

"There are no electoral lollies or surprises, and that's a positive."

Social sector lobby groups across the spectrum damned the budget for the cuts it was making, saying inequality would be even worse and poor people would find it even harder to make ends meet.

The public service is feeling the hardest pinch, being forced to save nearly $1 billion over three years.

Public Services Association national secretary Brenda Pilott said the Government had to come up with a better plan than simply cutting public services "and throwing those who provide them on the scrapheap".

Government ministers are countering this tide of discontent by pointing out that the deficit at the end of this financial year is going to be a record $16.7 billion and something had to be done about it.

The alternative, said Prime Minister John Key, would be to keep on borrowing vast amounts of money from foreigners which would lead to a downgrade by the international credit rating agencies and force the Reserve Bank to raise interest rates.

Mr English defended KiwiSaver cuts by saying the Government was borrowing to make its contributions, which wasn't the smartest way to increase national savings.

It made more sense, he said, for New Zealanders to save more of their retirement income themselves.