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A Summary Of Some Major Budgets From The Past

Contributor:
Fuseworks Media
Fuseworks Media

The May 28 budget has been labelled the most important since 1984. IAN LLEWELLYN of NZPA looks at some defining budgets.

Wellington, May 24 NZPA - Crucial budgets down through the years.

THE BLACK BUDGET

After the second Labour government takes office in 1957 it is hit by a balance of payments crisis due to a collapse in the price of butter in Britain.

In June 1958, Finance Minister Arnold Nordmeyer is told by colleagues he can not break election promises and cut spending, so instead he increases taxes on beer, tobacco, cars and petrol.

The budget is massively unpopular and is generally believed to cost Labour the 1960 election.

ROGERNOMICS HITS THE ROAD

In 1984, Labour's Roger Douglas is confronted by a declining economy and one of the most centralised economies in the western world. He lets loose the forces of market liberalisation, ends subsidies to farmers and sets out on a path of tax reform and privatisation.

The divisions within Labour over the policy tear the party apart and it is eventually voted out of office in 1990.

THE MOTHER OF ALL BUDGETS

National sweeps into government in 1990 to find a much worse fiscal and economic position than the out-going government disclosed.

Finance Minister Ruth Richardson takes the axe to social welfare benefits, cuts state spending and reverses National's election promise to remove the tax surcharge on superannuation.

The continuation of Rogernomics -- dubbed Ruthanasia -- causes disquiet in National and, after they almost lose the 1993 election, she is replaced with the more conservative and pragmatic Bill Birch.

THE CHEWING GUM BUDGET

Michael Cullen's sixth budget for Labour in 2005 provokes a backlash after some people's hopes of a tax cut turn out to be a promise to lift tax thresholds in 2008.

It is dubbed the "chewing gum" budget due to the changes delivering so little to taxpayers' pockets. It overshadows the unveiling of work-based saving scheme -- KiwiSaver -- as well as the bedding down of Working for Families and the New Zealand Superannuation Fund.

Dr Cullen eventually cuts taxes in 2008, just a month before National wins back office.

NZPA

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