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Budget continues to draw fire

07:00 Fri May 25 2012
AAP
Ministers made sure the bad news in the budget was announced in advance but they're taking the heat now it's been presented
Ministers made sure the bad news in the budget was announced in advance but they're taking the heat now it's been presented (Getty)

The government announced its budget bad news well in advance but that isn't stopping student protests, a torrent of criticism from opposition parties and grim warnings of another recession by trade unions.

Finance Minister Bill English's second consecutive zero budget, presented on Thursday, is seen by his opponents as more evidence the government has no plans to generate economic growth and create jobs.

And when parliament sits under urgency on Friday to pass budget legislation, they're going to continue their attacks on what they're calling a mean, nickel and dime budget that does hardly anyone any good.

In Auckland last night about 200 university students blocked a central city intersection, protesting about a new loan repayment regime they've known about for more than a month.

The budget has $4.4 billion of new spending in it but that's covered by $3b of savings and $1.4b of new revenue - it's fiscally neutral, and the government says its on track to get back to surplus in 2014/15.

Mr English is raking in the extra revenue by tweaking tax laws around holiday homes and boats, and hiking tobacco excise by 10 per cent from January for each of the next four years.

A raft of small programmes listed as "low quality spending" will be axed, with health and education getting most of the benefit.

Labour leader David Shearer is calling it a zero growth, zero hope budget and pleased his MPs in parliament when he dubbed Prime Minister John Key "Mr Australia" in recognition of the number of Kiwis who have crossed the Tasman to seek better jobs.

The Greens are aghast by spending on roads which was announced last year, and NZ First leader Winston Peters says the budget was written by "a fiscal fiend" and will see New Zealand sliding backwards as exports continue to decline.

Council of Trade Unions economist Bill Rosenberg says it's the same failed logic that voters in Europe are rejecting.

"This budget poses a real risk of sending us back into recession," he said.

The business sector has so far been a lone voice in support of the budget.

BusinessNZ chief executive Phil O'Reilly says the budget is focused in the right directions and the one bright new announcement in it - $385m for research, science and innovation - is just what the country needs.

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