Priorities

June 20, 2019

Last month’s Budget was supposed to be focussed on wellbeing, but some of its priorities suggest otherwise:

Hon Amy Adams: Why, when Budget 2019 allocated $15.2 billion of new operating spending over four years, couldn’t he find enough funding in the Budget to ensure that Pharmac’s funding at least kept pace with inflation?

Hon GRANT ROBERTSON: As has been traversed in the House last week, Pharmac did receive an increase in funding. In this Budget, in the health area, based on the evidence, mental health received a massive injection of funding after being neglected for many, many years. The overall health budget has received a significant increase. On this side of the House—as I said in answer to the last question—we can’t make up for nine years of neglect in one year or even two years, but we’re making a good start.

Hon Amy Adams: How can he say that he’s used “evidence and expert advice to tell us where we could make the greatest difference to the well-being of New Zealanders”, when the Government has chosen to pour hundreds of millions of dollars into fees-free tertiary at the expense of giving Pharmac enough money to keep pace with inflation?

Hon GRANT ROBERTSON: The premise of that member’s question is incorrect. Money that supports education, money that supports health, and money that supports housing are all part of the Budget; one is not at the expense of the other. What we’re doing is actually making up for the enormous under-investment of the previous Government.

Money spent in one area is not at the expense of money that can’t be spent in another?

It can only be spent once.

Even if you look at different categories, you can question priorities.

Extra resources for children who get to school without the necessary pre-learning skills and for those at school and failing are only two areas of much greater need, and that would make a far greater contribution to wellbeing, than fee-free tertiary education for all students, whether or not they need that assistance.

Hon Amy Adams: How does he think the refusal to even keep Pharmac funding in line with population growth has affected the well-being of New Zealanders like 14-year-old Stella Beswick, two-year-old Otis Porter, or Bella Guybay’s four-year-old daughter, who are all waiting desperately for the funding of lifesaving medicines that are funded in almost every other OECD country?

Hon GRANT ROBERTSON: As the member well knows, and as with the time she was in Government, Pharmac make those decisions. We now spend nearly a billion dollars on the Pharmac budget, and we will continue to invest in that. But we will also continue to invest in the areas which the last Government completely ignored—such as mental health—because that is what New Zealanders asked us to do.

Hon Amy Adams: How does he respond, then, to Troy Elliott, whose wife is suffering from serious breast cancer, and has said that New Zealand’s medicines funding is starting to make us look like a Third World country and that “this Government has to wake up; we’re going backwards.”?

Hon GRANT ROBERTSON: I understand that for any family that is going through a situation where they have a family member with cancer, that is traumatic. What we know in this country is that Pharmac makes the decisions about what drugs it invests in. . . 

Pharmac makes the decisions but the government allocates the funds which determine how much, or little, it can do.

Health inflation is many times greater than general inflation and this year’s Budget funding for Pharmac isn’t even keeping up with general inflation.

 

 

 


There are three kinds of people in the world . . .

May 24, 2019

There are three kinds of people in the world, those who can count and those who can’t . . .

It’s more than a little concerning that this exchange in parliament on Wednesday shows the Minister of Finance appears to be in the second group.

. . .Hon Paul Goldsmith: To the nearest billion dollars, what is an additional 1 percent GDP growth worth to New Zealand?

Hon GRANT ROBERTSON: I believe it’s about $800 million.

Hon Paul Goldsmith: $800 million?

Hon GRANT ROBERTSON: About that.

Hon Paul Goldsmith: Does he think that the people of New Zealand would expect their Minister of Finance to know that 1 percent of GDP is about $3 billion and that’s the amount of money that we’ve missed out on given the sharp decline in growth in the past year? . . .

Even those who struggle with numbers would recognise that there is a significant difference between $800 million and $3 billion.

We should also be concerned that the Minister has conceded defeat on Budget responsibility rules:

Finance Minister Grant Robertson has today thrown in the towel by scrapping his self-imposed debt target, National’s Finance Spokesperson Amy Adams says.

“Grant Robertson has been backed into a corner by allowing the economy to slow, over promising and making poor spending choices. Now, instead of a fixed target Grant Robertson has lifted the debt limit by 5 per cent. That loosens the purse strings by tens of billions of dollars.

“This is a blunt admission the Government can’t manage the books properly, it is not wriggle-room. This makes the fiscal hole look like a puddle.

“You can almost guarantee that means debt at the upper end of the range of 25 per cent. This is an admission of defeat from a Finance Minister who has repeatedly used these rules to give himself the appearance of being fiscally responsible.

“This decision will mean billions of dollars more debt because the Government can’t manage the books properly and wants to spend up on big wasteful promises in election year.

“This will pay for things like Shane Jones’ slush fund, fees-free tertiary and KiwiBuild – in other words, it’s wasteful spending.

“Debt isn’t free. It will have to be paid for by higher taxes in the future. . . 

The economy is slowing and its poor policies are, at least in part, responsible for that.

Reducing wasteful spending should come before more borrowing.

If the government had concentrated on value for money, measured success by the quality of its spending rather than the quantity and enacted policies which promoted growth it wouldn’t have to even contemplate more debt.


Economic growth foundation for wellbeing

February 26, 2019

The government is trying to persuade us that it’s doing something special in prioritising wellbeing.

That’s a message that will only be bought by people who haven’t worked out that successive governments have cared about and aimed for improved health, education, welfare, security and infrastructure which all contribute to wellbeing and that all these require a foundation of strong economic growth.

Money doesn’t buy happiness but it does buy better education, health services, welfare, security and infrastructure.

Treasury is attempting to put a value on things that contribute to wellbeing, and not doing it very well:

When gaining a friend is deemed more important than avoiding the Emergency Room in Treasury’s model it puts in doubt the analysis that should have underpinned its well-being Budget, National’s Finance spokesperson Amy Adams says.

“Serious questions need to be answered on how the Treasury is being asked to evaluate spending in Budget 2019. The Treasury’s cost benefit analysis (CBAx) model has new well-being values that that look out of step with the values of New Zealanders.

“Gaining a friend is valued at $592 in the revised CBAx – more than the $387 to avoid a trip to A&E. Having contact with a neighbour is valued at $8,572, or more than twice the value of avoiding diabetes.

“Changes to the analysis behind this Government’s policies are another example of its weakness of approach and its repeated failure to deliver.

“We’re a sports-loving nation but not many people would put a higher value on their membership of the local rugby club than access to emergency health services or serious illness.

“Governments always have Budget priorities and the risk with the ‘well-being’ framework is that it ends up being little more than a rebranding exercise.

“National understands that improving the lives of New Zealanders is ultimately about letting Kiwis keep more of what they earn and keeping the cost of living low. Kiwis are better off when they have more in their back-pockets and have access to world-class infrastructure and public services.”

You can’t put a monetary value on gaining a friend or having contact with a neighbour and even if you could that’s not the government’s business.

The government can, and should, however, manage its own spending to allow us all to keep more of what we earn and still provide first class public services.

 


Socialism kills more than war

December 24, 2018

Bad economic policies kill more children than war:

Recent reports that infants now die at a higher rate in Venezuela than in war-torn Syria were, sadly, unsurprising—the results of socialist economics are predictable. Venezuela’s infant mortality rate has actually been above Syria’s since 2008.

But it’s not all bad news.

The big picture, fortunately, is happier. The global infant mortality rate has plummeted. Even Syria and Venezuela, despite the impact of war and failed policies, saw improvements up to as recently as last year. From 1960 to 2015, Syria’s infant mortality rate fell by 91% and Venezuela’s by 78%. This year (not reflected in the graph above or below), Syria’s rate rose from 11.1 per 1,000 live births to 15.4, while Venezuela’s shot up from 12.9 to 18.6. Meanwhile, infant mortality rates have continued to fall practically everywhere else, and have declined even faster in countries that enjoy more freedom and stability. Consider Chile.

Chile’s infant mortality rate in 1960 was actually above that of both Venezuela and Syria. It managed to outperform Syria by the mid-1960s, but was still woefully behind its richer northern cousin, Venezuela.  In the early 1970s, Chile’s progress slowed to a crawl as its elite flirted with socialist policies. Once its government abandoned socialism and began economic reforms in the mid-1970s, the pace of progress sped up again, and soon Chile’s infants were safer than Venezuela’s. Today, Chile’s infant mortality rate is similar to that of the United States.

There is a lesson to be learned from these data points: economic policy matters. While Venezuela’s socialism has managed to kill more infants than a full-blown war in Syria, Chile’s incredible success story shows us that by implementing the right policies, humanity can make rapid progress and better protect the youngest, most vulnerable members of society. Today it is hard to believe that infants in Chile were once more likely to die within a year than their contemporaries in Venezuela and Syria. . . 

New Zealand is in no danger of following Venezuela’s downwards trajectory to complete disaster, but it is concerning that economic growth has slowed:

The economy appears to be slowing with today’s GDP figures showing economic growth in the past three months is the lowest in five years, National’s Finance spokesperson Amy Adams says.

“Economic growth in the past three months of 0.3 per cent doesn’t even compensate for population growth. Economic growth per person, which reflects population growth, actually declined in dollar terms over the past three months.

“Despite all the Government’s talk of wellbeing, that means New Zealanders are becoming worse off.

“While quarterly numbers can be volatile and need to be read with caution, these latest figures do suggest a general slowdown from the economy the Government inherited from National.

“These results will cause embarrassment to the Minister of Finance after he was too quick to boast about the previous quarter’s result, which now appears to be an outlier.

“Despite the economy slowing, the Labour-led Government is projected to take an extra $17.7 billion in tax from New Zealand families over the next four years than was projected under National. That amounts to $10,000 less in the back pockets of the average household.

The announcement of another increase to the minimum wage without a change to tax thresholds will mean even more tax taken.

Any families on low wages will be little if any better off because any gain in their pay will be offset by abatements to Working for Families top-ups. It is better to earn more and be less dependent on government support but that will be cold comfort to people who are struggling.

“National believes New Zealanders deserve to keep more of what they earn. Unlike the Labour-led Government, we know that as a country we can’t tax our way to prosperity.

“New Zealand needs sensible and consistent economic policies that promote growth and reward hard work, as well as wise spending of taxpayer money.” 

Venezuela is an extreme case but the lesson is clear – tax and spend economic policies are no substitute for ones which promote economic growth and lessen the burden of the state.

Good economic policy is the necessary foundation for sustainable social progress.


Christian privilege?

December 7, 2018

Statistics New Zealand is copping criticism for playing ‘Check Your Privilege Bingo’ at a workshop:

The game had a five-by-five board, with squares including ‘white’, ‘Christian’, ‘able-bodied’, ‘no speech impediment’, ‘male’ and ‘heterosexual’.

“Officials at a Stats NZ technical workshop today spent an hour having participants singing, hand-clapping and playing ‘Check Your Privilege Bingo’,” said National finance spokesperson Amy Adams. . .

According to the event schedule the game only ran for 15 minutes. 

“Yet at the same time New Zealand continues to wait for the 2018 Census results after a shambolic process that resulted in significant data gaps and we’re yet to see anything on the last two years of child poverty statistics.”

I agree that this doesn’t seem to be good use of time and it is particularly galling when the census was a shambles but I was intrigued that being Christian makes you privileged.

When it’s okay to put a condom on a Catholic icon and call it art, when people are killed for mocking the prophet of one religion but Jesus and Christ are used as curses and the politically correct pussy foot round every other creed but Christianity, is it really a marker of privilege?


Rural round-up

November 17, 2018

’Cutest sheep in the world’ turns heads in Christchurch

A new breed of sheep debuting at the New Zealand Agricultural Show in Christchurch is proving very popular with the crowds.

The Swiss Valais Blacknose, which are considered to be the “the cutest sheep in the world,” have a black head and black knees, and a fluffy white fleece.

Wairarapa farmer Christine Reed, along with several business partners formed Valais Blacknose NZ and imported the breed as embryos from the UK about a year and a half ago. . .

Biosecurity experience bears fruit :

When kiwifruit bacteria Psa-V appeared in New Zealand in 2010, it reshaped the industry’s biosecurity practices. Inside Dairy spoke to one grower about how dairy farmers facing Mycoplasma bovis can learn from his experience.

Kiwifruit growers Robbie Ellison and his wife Karen run Makaira Orchards in Te Puke, south east of Tauranga. When the Ministry for Primary Industries (MPI) announced in November 2010 that Psa-V had been discovered in a neighbouring orchard, the airborne disease was found on the Ellisons’ crops.

“We were right in the thick of it,” says Robbie. “I never want to go through another summer like that again. DairyNZ and dairy farmers were very supportive of kiwifruit growers during our crisis, so I’d like to return the favour now they’re dealing with Mycoplasma bovis (M. bovis).” . . 

Money saving tips shared – Ken Muir:

 Dairying can be a tough life for many farmers but it’s especially difficult if you’re a woman on your own with a family to raise.

However, Northland farmer Lyn Webster, who spoke to the Dairy Women’s Network in Gore last week, has turned a need to make best use of her resources into a publishing and online enterprise, sharing her money-saving practices with anyone who cares to listen.

She’s sold out the first edition of the story of her frugal lifestyle Pig Tits and Parsley Sauce and a new edition with a new title Save, Make, Do will be published by Random House next year.

Ms Webster was born and bred in Otago and went to Taieri College followed by university after a period of working. . . 

Nature’s power pack meat & veges :

 What is Nature’s Power Pack when it comes to eating? Is it meat? Is it vege? Is it superfoods? Is it a certain type of dietary regime? It’s probably no surprise for those omnivores that enjoy including meat in their diet, but to get a big bang for nutrition buck don’t look past a moderate portion of protein such as lean red meat with a good portion of veggies. Yep it’s that simple.

So here’s two reasons why animal protein should not be overlooked as a smart dietary choice.  . . 

Veganism was behind the ‘meat tax’ hype – so what happened to critical thinking? – Joanna Blythman:

Much media reporting of food and health is fatuous and lazy, but coverage of the proposed ‘meat tax’ hit a new low of ignorance, or if you’re less charitable, intellectual dishonesty.

Was it too much to ask that journalists who reported as unimpeachable scientific ‘fact’ the recommendations from the University of Oxford’s Oxford Martin School – which describes itself as ‘a world-leading centre of pioneering research that addresses global challenges’ – tempered their headlines with the fact that the lead researcher, Dr Marco Springmann, is a loud-and-proud vegan?

It’s naive to think that his beliefs didn’t influence the design of this number-crunching research. Mathematical modelling (the type used here) is about as weak and unreliable as research gets. It is based on highly debatable assumptions and doesn’t take full account of ‘confounding factors’, such as smoking, exercise, alcohol and class. . .

The enduring legacy of merino – Katrina Kufer:

Dubai Opera’s Sky Garden exclusively hosts the Loro Piana, in partnership with Tashkeel, Merino wool cloud installation that showcases the World Record Bale alongside a special commission by Calligraffiti artist eL Seed.

Under the royal patronage and support of H.H. Sheikha Lateefa bint Maktoum bin Rashid Al Maktoum, founder and director of Tashkeel, Italian luxury textiles brand Loro Piana’s The Gift of Kings and The Record Bale, The Noblest of Woolsinstallation comes to Dubai after premiering at Art Basel Hong Kong. Featured alongside a special commission by French-Tunisian street artist eL Seed — known for large-scale ‘Calligraffiti’ works — the immersive installation is created from the world record holding Merino wool in its raw form. . .

 


Mixed Ownership Model works well

August 23, 2018

National’s partial sale of a few state assets has been vindicated by a report released by TDB Advisory:

An independent report released today by TDB Advisory shows that the Mixed Ownership Model introduced under the previous National Government has been an overwhelming success, National’s Finance spokesperson Amy Adams says.

“The Mixed Ownership process successfully generated $4.7 billion for public infrastructure such as schools, hospitals and broadband and TDB’s findings highlight the wider issue with the Government’s ideological opposition to private sector involvement in funding new assets.

“The partial sell-down of Genesis, Meridian and Mercury began in 2013 and had three simple objectives: to lower Government debt; to increase investment opportunities for ‘mum and dad’ investors; and to improve the financial performance of each company.

“TDB’s study shows all of these objectives have been achieved.

“The most striking finding is that despite electricity prices being flat-to-falling over the period of the Mixed Ownership Model, shareholder returns have increased by 69 percent and the Government has received higher dividends despite owning a lower share of each company.

“The report also shows that opposition to the Mixed Ownership Model was misplaced. It didn’t lead to higher electricity prices. And it didn’t result in a drop-off in renewable energy generation, which has increased over the period.

“The current Government has an irrational opposition to the private sector. Labour’s ideological resistance to Private-Public Partnerships to build public assets means a number of important projects are failing to get off the ground.

“The Government shouldn’t shut itself off from ideas such as Private-Public Partnerships or Mixed Ownership purely on ideological grounds. Evidence, not ideology, should drive good policy.

So the fear of prices soaring was misplaced; the government is earning a similar amount in dividends from a small shareholding; and pausing less interest; and the people who invested in the shares are getting dividends too.

This report  ought to encourage the government to consider more sales.

. . .Taxpayers’ Union Economist Joe Ascroft says, “This report demonstrates what most analysts already knew: private-sector discipline can transform bloated, inefficient Government-owned companies into efficient market-disciplined businesses. It’s a win-win-win for taxpayers, investors, and consumers.”

“With the Government struggling to meet its self-imposed budgetary restrictions, it’s actually the perfect time for an expansion of the Mixed Ownership Model. Raising capital and increasing dividend payments would give Grant Robertson the room to invest in infrastructure without seriously damaging the country’s books.”

The three parties now in government were vehemently opposed to the MOM.

The report proves them wrong and shows their opposition wasn’t based on fact.

The state still owns too many businesses which could easily be sold, partially or fully, to the benefit of the public finances, taxpayers and the businesses.

If the government would let evidence not ideology guide its decisions, it would sell at least some of them but it is very, very unlikely to do so.

The report is here.

 


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