Bill’s recipe rewarded by rating revision

May 28, 2009

Did Bill English get the Budget recpie right?

If you judge it by the reaction of Standard and Poors, he did.

RadioNZ reports:

International credit ratings agency Standard and Poor’s has revised its outlook on New Zealand from negative to stable and affirmed its AA+ rating, after what termed a “sound” Budget.

Does it matter?

A down grade would have resulted in higher interest rates which would have at best slowed the recovery.


Fencing us in

May 28, 2009

Palmerston North coroner Tim Scott has called for farmers and the Labour Department to lobby government to make fencing compulsory for all farm houses.

Mr Scott said sharemilking agreements should make it mandatory for houses occupied by sharemilkers and their families to be adequately fenced.

He wanted his decision referred to the Labour Department’s Occupational Health and Safety Unit, Federated Farmers, and an appropriate farm worker union, the Dominion Post reported.

Legislation would be needed to make fencing mandatory.

Mr Scott said the legislation could be similar to the Fencing of Swimming Pools Act, which promotes child safety by requiring the fencing of some pools.

This follows the death of a three year old who died after she and her brother fell into an effluent pond about 75 metres from their house. The house wasn’t fenced, there was a stock fence between the house and the pond.

The children’s parents, who were sharemilkers, had asked the farm owner to fence the house. He had bought fencing materials but asked the child’s father to wait until the section was levelled before building the fence.

This is a tragedy made worse because of the if onlys:  if only the fence had been built, if only the pond had been fenced, if only the children hadn’t been playing outside . . .

The coroner is quite clear in his findings that the parents were not to blame.

The sharemilking agreement had a clause which said the property would be fenced but it was in the fine print of a standard contract – 119 of 161 clauses on 37 pages.

He recommends that share milking agreements make it mandatory for all houses occupied by sharemilkers and their families be adequately fenced and that this clause be highlighted.

He goes on to recommend that all farm houses should be securely fenced.

But how practical is that and if farm hosues are to be childproof why not every home?

Farms are full of dangers but is an effluent pond nearly 100 metres from a house in the country any more dangerous than a busy road right outside one in town?

And how do you make a whole property completely childproof?

Friends had a deer fence round their house and the children learned to climb it. Other friends had their gate fastened so securely that visiting adults couldn’t get in but their three year old son managed to get out.


Budget bits

May 28, 2009

Bill English said his Budget is a balanced response to the recession:

“It funds public services, maintains entitlements, and meets the increased cost of benefits, while at the same time taking the first steps towards improving productivity and competitiveness in the longer term.

“Our focus over the next year will be rebuilding business confidence, which will further help to preserve and create jobs, and ensuring that young people remain connected with the workforce and improve their skills.

“The Government is confident about New Zealand’s prospects over the next few years. We believe New Zealand has a genuine opportunity to emerge from the recession in a stronger position than most other countries.

“Budget 2009 is the first step to ensuring that happens.”

bill budget 2

Two contrasts with recent Budgets – all commitments are funded and it is clear about what is new funding and what’s already been announced.

Some highlights:

Line by line reviews free up $2 billion.

More for infrastructure:  including $245 million capital spending in health; $250 million capital and $56 million operating fund for broadband – $48m of that for rural broadband; $325.6 million capital funding for education and an extra $197.7 million operating funding for new schools and upgrades to existing ones; ($172m of this was announced in February);

More for science:  An extra $40 million over four years to the Crown Research Capability Fund; $36 million over four years to the Marsden Fund;  $32 million over four years for health reserach; new funding of $4 million over four years for the Prime Minister’s Science Prizes; $16 million in 2010/11 for the Kiwi Advanced Research and Education Network.

A boost for primary sector innovation: $190 million over four years for the new Primary Growth Partnership.

Agriculture Minister David Carter said:

When fully operating in 2012/13, the partnership will see the Government investing $70 million annually in primary sector innovation,

The Government’s commitment will be matched dollar for dollar by industry, leading to a total investment of up to $140 million a year.

$60 million for hospices.

The decision to suspend payments to the government superannuation fund had been clearly signalled and is a sensible response to the recession. There is no point borrowing to invest.

The decision to suspend tax cuts had also been signalled. It’s disappointing but as David Farrar  explains at Kiwiblog:

National did “pay” for the 2010 and 2011 tax cuts by reducing KiwiSaver subsidies by over $1 billion to compensate. The problem is that the fiscal position has changed so much since PREFU that anything not yet nailed down had to be sacrificed.

He also has the answer to the question of why break a tax cut promise but not a spending one such as interest free student loans:

English responded that people feel insecure in a recession, and they made a decision not to cut any current entitlements to help confidence and security.

Summing up the Budget, Bill English said it was a turning point for the country after 10 years of economic growth and appetite for debt and government spending.

He’s tightened the national belt to rebalance the economy from debt and expansion to investment and exports.

In the last five years government expenditure increased by 50%, the tax take went up 25% and the economy only grew 3%.

No-one likes going on a diet, but we can’t afford to keep feasting on borrowed money – whether that’s borrowing from overseas or borrowing from future taxpayers.

If we want to be a first world country with first world services we need a first world economy and the foundation for that is economic growth from exports.


Imagine

May 28, 2009

Imagine what New Zealand might have been like if the last nine budgets hadn’t been covered in red.

Imagine how much stronger the country’s balance sheet would have been had middle and upper income families not been turned into beneficiaries, had the emphasis been on improving services rather than changing systems, had we not been saddled with an over priced train set, had the goal of returning New Zealand to the top half of the OECD not been ignored. . .

Imagine how much stronger households and businesses would have been had we not had nine years of over taxing and over spending.

Imagine how much better off New Zealand would have been had Michael Cullen not spent the lot last year.

It wouldn’t have stopped the global economic recession but policies which minimised the dead weight of the state and maximised growth would have left us in a stronger position to deal with it and recover from it.


Chicken or egg?

May 28, 2009

Which is more important – the country’s credit rating or managing our way out of the recession?

It’s a bit like the question of whether the chicken or egg came first. 

Getting a credit rating downgrade will make it harder to manage our way out of the recession and not managing our way out of the recession will result in a credit rating downgrade.

To mangle the metaphor – if you kill the chicken you don’t get eggs and if you scramble the eggs you don’t get chickens.


Happy birthday ODT online

May 28, 2009

It’s a year since ODT online was relaunched.

We still subscribe to the print edition but it comes with the mail sometime in the early to mid afternoon so the paper’s website is always one of my first stops in the morning.

We could swap the print sub for one for the complete digital edition but there’s still something about reading a real paper and you can’t use a digital version to light fires.


Whare Flat Frolics

May 28, 2009

Day 28 in the tune a day challenge for NZ Music Month.

The Whare Flat folk music festival  is the New Edinburgh Folk Club’s annual celebration at, yes, Whare Flat.

This may not be typical of what happens there, and I suspect from the accent that at least one of these artists is from the other side of the Tasman:

Round the other blogs:

Zed is singing Renegade Fighter  at Keeping Stock

The Bats are singing Courage  at Rob’s

Op Shop are singing One Day  at Inquiring Mind


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