Fiddling while country burns

September 10, 2020

Labour’s following its base instinct with its tax policy:

No country in the world has ever taxed itself out of recession, but Labour’s first instinct is to raise your taxes, National’s Finance spokesperson Paul Goldsmith says.

“Today Grant Robertson wouldn’t say if his tax policy is a bottom line in any coalition negotiations with the Greens, leaving the door wide open for other tax increases.

“If Grant Robertson is true to his word, then he will make no other tax increases a bottom line.

“This is just the beginning. Labour will eventually widen the net and come after middle income earners.

“Labour has predictably gone back to old habits after the failure of its Capital Gains tax this term.

“It opens a door for tax avoidance that we haven’t seen for many years, which brings into question Grant Robertson’s revenue estimates.

“National won’t increase taxes and won’t introduce any new taxes.”

Labour’s plan is to impose a new top marginal tax rate of 39% on income earned over $180,000.

It says it will bring in $550 million a year.

It won’t.

Instead it will create work for accountants and lawyers as people find ways to get round it.

Even if it did, it would be a tiny contribution to the public coffers in contrast to the billions that are being borrowed.

We don’t need fiddling with tax rates while the country burns with debt.

We need plans for economic growth which is the only way to put out the fire.


Just wondering

September 3, 2020

Just wondering:

Why did James Shaw decide the Taranaki Green School was of sufficient merit to prompt him to issue an ultimatum?

. . .Newshub has obtained an email that went to Government ministers and the Treasury from Shaw’s office and it included a stark ultimatum.

“Minister Shaw won’t sign this briefing until the Green School in Taranaki is incorporated.”

The email said Shaw discussed the ultimatum with the Education Minister. 

“Minister Shaw has also discussed this one with Minister Hipkins.

“Sorry to be the spanner-in-the-works, but if we can get the project included, he’ll sign everything this afternoon,” the email said. . . 

Just wondering:

After all the dead rats he and his party have had to swallow in contravention of their policy in the last three years, why on earth would he make such a strong stand over  this?

Just wondering:

Who leaked the email, and why?

Just wondering:

Why did the other Ministers give in to the greenmail?

Just wondering:

What does it say about a party leader who didn’t remember his party’s policy against all state funding of private schools and what else has he forgotten about his party policy?

Just wondering:

If he’ll read this from the Villa Education Trust:

There are more reasons for dismay than immediately strike home with the Green School $11.7million debacle.

Plenty has already been said about the “greenmailing” of James Shaw over signing off on the rest of the $3 billion. The hypocrisy of the move. The passing the buck by the Minister of Finance and Minister of Education. Etc. We then had Chris Hipkins – Minister of Health, Education, State Services and Leader of the House – reverting to nonsense around Charter Schools and stating that at least the Green School kids won’t be learning in shipping containers.

The first missed point of despair is that the entire response to this spend from the perspective of other schools has been around property. One question you can always ask the Boards of dilapidated schools is how have managed their maintenance budget over the last 12 years. If they are honest you will get a range of answers. The second point is that our genuine crisis in education is student achievement and it is not highly correlated to the buildings they learn in (within reason of course). We have gone educationally insane of we think that flash buildings with close the MASSIVE U.E. gaps for Maori and Pasifika (compared to Asian and European) and reverse the decline against international measures. The NCEA results have already started to slide after 2 years under Labour. With the amount of absenteeism currently happening and the level of online engagement for many this year’s results could be a massive disaster for marginalised groups. However – educators are prepared to make a spectacle of themselves for spouting and a dab of paint.

What’s more important, flash buildings or student achievement?

The injustice our Villa Education Trust feels is around a second hidden effect. In the Learning Support Action Plan 2019-2025, Minister Hipkins acknowledged “one in five children and young people need some kind of extra support for their learning. This might be because of disability, learning difficulties, disadvantage, physical or mental health or behaviour issues” and “New Zealanders want an education system where all children and young people can take part in education and can learn and achieve, whatever their needs.”

In the Plan, Minister Hipkins goes on to say “This Government has a vision for an inclusive education system where every child feels a sense of belonging, is present, makes progress, where their wellbeing is safeguarded and promoted, where learning is a lifelong journey, and where children and young people with learning support needs get the right support at the right time.”

During 2019 we took the Minister at his word – as we are – according to all external reviews (e.g. “In summary we find and conclude that in both schools, the management and staff are actively involved in continuous development, and the delivery, of a unique programme of teaching and learning which is based on a comprehensive ‘local’ curriculum that is aligned with the New Zealand Curriculum, and which provides for the personalised needs of priority learners ‘many of whom have been failed by the current education system” Cognition Education) Hence we proposed to close our small private school and open a non-zoned, 240 student State Designated Character School, near a transport hub for a wide range of Auckland families to access. The Prime Minister had told the country she wanted more options like this and the “work was being done.”

Our school community has been exceptionally poorly treated by Ministry through a process that, so far, resulted on July 7th with Hipkins saying “no” with him blaming his officials and his officials blaming him.

So – while 25 students benefit by $11.7 million at The Green School … 240 students per year with diverse needs will miss out. To rub salt in Minister Hipkins publicly mocked our efforts in the House yesterday. Class, kindness and compassion.

This whole debacle illustrates the problem with politician’s making individual funding decisions:

The Taxpayers’ Union is calling for the abandonment of grant decision making by politicians and Cabinet committees, and a return to the tradition of these being made by officials using objective and transparent criteria.

The following can be attributed to Jordan Williams, a Spokesman for the Taxpayers’ Union:

“The spectacle of politicians horse-trading individual funding decisions is something we expect to see in smoke-filled rooms of yesteryear, not a modern day New Zealand with a reputation of being corruption-free.”

“The Provincial Growth Find, and now the COVID ‘shovel ready’ fund, are normalising a process of decision making that rewards companies which are politically connected. It is a dangerous path.”

“Steven Joyce reintroduced the sort of corporate welfare largess not seen in New Zealand since the Muldoon Government. But instead of fixing the problem, the current Government has doubled down and we have now returned to politicians making funding decisions for individual projects and pet causes.”

“Enough is enough. Now we are seeing the warts and all flaws in the process, New Zealand should return to a transparent process of the politician’s job being limited to setting criteria and objectives, and leaving it to officials to make the individual grant decisions.”

There is a case for Ministers to have a role when decisions are finely balanced.

This wasn’t.

Treasury opposed the grant:

The Treasury advice to Shaw and the others ministers who signed off on hundreds of projects for infrastructure investment says the Green School does not have “full private school registration” and would be unlikely to get that until mid 2021.

“We believe it would be inappropriate to announce or provide government funding for a project that does not yet have the necessary education approvals,” the advice says.

Furthermore, it says even if it had the “necessary” approvals, “we do not recommend funding for this school”.

Treasury also objected to the project being overseen by the Provincial Development Unit saying it was not the “appropriate agency for this school”. . . 

Shaw has accepted responsibility for the debacle but whoever gave into his greenmail is just as culpable.

This isn’t just a waste of money, it’s also a poor reflection on the whole government  its processes and priorities:

The murky brinksmanship revealed in the decisions to fund the Green School suggest the $3 billion shovel ready fund is operating like a slush fund by the Government, National’s Finance spokesperson Paul Goldsmith says.

“Grant Robertson needs to come clean about the deals being done between Ministers. How is it that one Minister could hold up shovel ready projects unless the Green School was signed off?

“It’s clear the Government doesn’t have its priorities in order. These projects are supposed to be about investing in infrastructure to create jobs and grow our economy.

“But the impression left is that the shovel ready fund is operating as yet another $3 billion slush fund with different projects carved out by Government parties for their political wins.

“No matter how hard he tries, Grant Robertson cannot wipe his hands of this decision. He is the Minister of Finance, it is his job to make sure every taxpayer dollar is spent wisely. Instead he signed off on a private school receiving millions of taxpayer dollars.

“With the scale of debt-fuelled Government spending right now, it is more important than ever that the Government demonstrates to New Zealanders that decisions are made on the basis of need and effectiveness rather than ‘wins’ for different Government parties.

“The whole episode makes a mockery of the Prime Minister’s claim there is no politics in Covid.

“The Government can’t claim ignorance, Treasury told it not to give any funding to the Green School because it didn’t have the full education approvals needed for a private school.

“Grant Robertson needs to front up and explain exactly what happened and why he’s allowing himself to be held to ransom by his own Associate Minister of Finance.”

Just wondering:

Does Grant Robertson need reminding of his own words: that every dollar the government pays out is being borrowed?

Just wondering:

What were the merits of the ‘shovel ready’ projects that were put forward for grants and missed out?

It would be difficult to believe that at least some didn’t have a much better cost-benefit ratio than this one.


Borrowing every dollar

August 31, 2020

Finance Minister Grant Robertson justified not extending the wage subsidy to cover the longer period at alert level 3 by saying: we are borrowing every single dollar that we are paying out.

Did Cabinet take that into account when it signed off the $11.7 million paid to the Green School which has raised the ire of  principals, teacher unions, the Opposition and Green Party members?

Green co-leader James Shaw has copped most of the criticism and warrants it for the hypocrisy in backing the payment when his party policy opposes private schools.

But the decision must have been signed off by Cabinet.

Labour is no doubt enjoying watching Shaw squirm. But it is just as guilty of hypocrisy for agreeing to fund this small, private school with fees of up to $43,000 a year after scrapping the partnership schools which did so much for disadvantaged pupils failed by the conventional education system.

New Zealand First has been uncharacteristically quiet about this but it is in no position to criticise when so many of the projects it has funded with taxpayers’ money would not have passed the cost-benefit test.

That was bad enough when the government books were in surplus.

It is far worse now that every dollar that is spent is borrowed, accruing interest and will have to be repaid.

Robertson reminded us of that in defending his decision to not extend the wage subsidy.

If he, and his government,  took that approach to all other spending the Green School would not have been funded and the country wouldn’t be facing such a mountain of debt.


Need trust for unity

August 27, 2020

At the start of the first lockdown there was a high degree of trust in what the government was doing.

We didn’t all buy into the rhetoric of hard and early, and some argued that safety rather than essential should be the criteria determining what businesses could operate.

But by and large most of us accepted the need to stay home, stay safe and save lives.

Research of social media by consultancy Rutherford shows feelings over this second lockdown are different:

People are feeling more anxious and angry during the second Covid-19 lockdown than any other time since the pandemic started, according to new social media analysis.

The sense of community New Zealand felt during the first lockdown in March appears to have somewhat dissolved amid growing frustration and despair, suggests the new research by business consultancy Rutherford.

The number of people encouraging others to comply with lockdown rules, by sharing messages such as #stayhomesavelives, has dived by more than 50 per cent, the research shows. . . 

Rutherford analysed about 435,318 social media posts on Facebook, Twitter, Reddit and Instagram from the past two weeks to get a snapshot of how New Zealanders were feeling about Covid-19. . . 

Rutherford chief executive Graham Ritchie said not only had the volume of social media conversation around Covid-19 increased, but negative sentiment was up 10 per cent. It was also more heightened and toxic as people vented their frustration at further restrictions. . . 

At least some of that frustration is due to the growing list of failures from the government and health officials.

There was always the risk that human error would let Covid-19 through the border but shortcomings in testing and tracing were the result of more than human error, they were the result of systems and process failures.

It doesn’t help that we were repeatedly assured that the government and Ministry of Health, bolstered by the military, had everything under control when it is now obvious they did not.

Unity depends on trust and Heather du Plessis-Allan is not alone in losing trust in the government’s ability to keep Covid-19 at the border:

. . . Do we want to go through the list of things this government has told were happening but weren’t?  Because it’s long 

It starts with the time we were promised the police were checking on all retuning kiwis isolating when at home, and they weren’t checking. It included us being told everyone coming out of managed isolation was being tested first when they weren’t. And it goes up to us being told all border workers were besting tested when they weren’t. 

You know, our plan to keep Covid out of the country looks good on paper, but unless it’s actually being done, it’s not worth the paper it’s written on. Covid will slip through if you don’t do what you say you’re going to do. 

Goodness only knows what the Prime Minister plans to announce to reassure us over this one.  She’s already used the 500 defence force card, the Heather Simpson and Brian Roche card, and the ‘I promise we’ll do it this time’ card. 

Are there any other cards left? 

In fact, you know what?  She shouldn’t even bother, because it doesn’t really matter what she announces to try to fix this, again. I don’t believe a word of what she and her government now say about their Covid response. 

I now do not trust them to keep Covid out of this country any more. 

Grant Robertson won’t extend the wage subsidy for the extra four days of level 3 lockdown because he says we are borrowing every single dollar we are paying out.

Yes, and how much extra are we borrowing because somehow or other the virus is back in the community and we’re now paying the Simpson-Roche committee to check that the people who are supposed to be keeping the border tight are actually doing it?

We’re no long united because we no longer trust the government and health officials to keep us safe.

But unfortunately we can trust them to keep spending more borrowed money to fix problems that wouldn’t have needed solutions if our trust in them to do what they say they’re doing hadn’t been misplaced.


No indexation = tax increase

August 11, 2020

Labour’s wrong on tax – again:

The New Zealand Taxpayers’ Union is slamming the claim by Labour Party finance spokesman Grant Robertson that the National Party’s policy to index tax brackets to inflation is a “tax cut”.

Taxpayers’ Union Executive Director Jordan Williams says, “It’s dishonest to frame indexation – adjusting income tax thresholds to inflation – as a ‘tax cut’, like Mr Robertson did today.”

“Adjusting tax brackets so that people are not artificially pushed into paying higher marginal tax rates isn’t cutting tax. By definition, it’s keeping the rate of tax paid the same.”

“Mr Robertson is trying to cloud the issue so he’s not held to account for the dishonest way he, and successive Ministers of Finance, have increased tax by stealth through wage inflation. It’s a shame he is choosing to be so misleading about tax at a time many households are facing fiscal crisis.”

Adjusting tax thresholds to account for inflation is not a tax cut but failing to do so pushes people into a higher bracket  and subjects them to paying more which is in effect a tax increase.

Given Labour’s big spending plan with borrowed money is not matched by plans to reduce spending anywhere, encourage growth nor to repay the debt it will almost certainly increase some taxes.

Even if it does nothing more, by refusing to index brackets to inflation it will be increasing tax for everyone who is pushed into a higher threshold.


Poverty of delivery BC & vision AC

August 4, 2020

Before Covid-19 (BC) the government was much better at media releases about their policies than delivering them.

Labour’s flagship policy KiwiBuild was a flop, child poverty worsened and the country was facing rising numbers on jobseeker benefits and forecast deficits even before Covid-19 struck.

While we can debate the when and how of the government’s response to the pandemic, we can be very grateful that there is no evidence of community transmission and, in spite of early mismanagement, new cases are being contained at the border.

While everything possible must be done to ensure that continues, now is the time to be formulating a plan for after Covid (AC).

The Labour leader’s warning not to expect big policies from her party this election is a mistake.

We need big policies. That doesn’t mean big-spending policies, it means big visionary ones and among them must be a strategy to repay the debt it is amassing:

With the election only weeks away, Labour needs to clearly explain to voters how it intends to repay the massive debt it is taking on to deal with Covid-19 – and whether its plan will involve higher taxes, National’s Finance spokesperson Paul Goldsmith says.

“Optimism is not a strategy for economic recovery,” Mr Goldsmith says. “So what is Labour’s target and timeframe for getting this country’s debt under control?

“Labour’s silence on the issue of a debt target is a telling sign that the only tricks up Grant Robertson sleeve is to keep spending and, eventually, reveal that he will have to hike taxes.

“Any responsible government will set a long-term target to get the huge amount of debt we are taking on under control so that the country can respond to the next crisis.

“We have said we will aim to get debt below 30 per cent of GDP in a decade or so.

“New Zealand can achieve this by striving for higher economic growth, by increasing government spending at a slightly slower rate than currently projected, and by halting contributions to the Super Fund.

“Rather than outlining any credible plan of her own this morning, Ms Ardern made false claims about the prospect of austerity under National. This is complete nonsense, and she knows it.

“National agrees with the Government that it is absolutely appropriate to spend more and borrow more during an economic crisis, such as we are seeing today.

“This is not the time for austerity, and nobody is suggesting it.”

Any government can borrow and spend. It takes a capable and disciplined one to spend the borrowed money wisely, make savings where necessary and plan to pay off debt to enable the country to cope with the next crisis.

The last National government inherited forecasts for a decade of deficits. It managed to get back into surplus while protecting the vulnerable from the worst effects of the Global Financial Crisis and dealing with the Canterbury earthquakes.

The current government inherited forecasts of surpluses, burned through them before Covid struck and is now planning to borrow big with no ideas about how to repay the debt.

This government had poverty of delivery BC and now Labour has poverty of vision AC. Parties that couldn’t deliver in relative good times can’t be trusted to deliver in bad times.


How are going to get out of this mess?

August 3, 2020

Sir Bill English is warning businesses to prepare for a W-shaped downturn:

Former prime minister Sir Bill English has issued a bleak warning to businesses to prepare for the worst case scenario as “cracks” created by the economic earthquake of Covid-19 become more apparent.

Just like the damage caused to Wellington’s buildings by the Kaikoura earthquake, the true damage to the economy might not emerge immediately, he said.

Wage subsidies had “bought time for thousands of businesses” and there was a sense just from the amount of traffic on the streets of there being a “bounce”, he said.

But the return in consumer confidence would not last and businesses are “reluctant to deal with the fact” that the economy might drop back again, he told a webinar hosted by accounting firm BDO. . . 

Businesses might find by the middle of next year that they had 20 per cent less revenue as a “W”-shaped downturn took shape, and needed to ask if they could survive on that, English said.

“This is going to be marathon not a sprint. It could be really tough.” . . 

Job losses are already piling up:

Today’s troubling revelation that another 1500 Kiwis lost their jobs this week highlights the need for a sound economic plan to get us through the current jobs crisis, National’s Finance spokesperson Paul Goldsmith says.

The number of people receiving unemployment benefits is now up to 212,000 – an increase of 67,000 since New Zealand went into lockdown.

This week alone, 1500 more people went on the dole. Another 450,000 Kiwis are also in the precarious position of relying on the wage subsidy scheme that will run out on September 1.

“New Zealand is facing its worst economic downturn in 160 years,” Mr Goldsmith says.

“This incompetent Government’s big idea is simply to increase government spending, which will just lump the country with more debt for future generations to repay through higher taxes. . . 

The government’s response so far is not going to help the economy:

Massive debt-fuelled spending and keeping the border tight are necessary but insufficient to restore our economy and create jobs, National’s Finance spokesperson Paul Goldsmith says.

Mr Goldsmith was reacting to Grant Robertson’s “Q & A” interview this morning, where the Minister played down projected job-losses when the wage subsidy ends and emphasised more government spending and tight border as the government’s primary economic response.

“The reality is that the spending has not always been well targeted or effective and the so-called tight border of Labour has been shown to have holes.

“The missing piece in the job creation story – the third trick – is bold moves to enable private sector investment,” Mr Goldsmith says.

“The government can buy temporary jobs, such as it is with its $1.1 billion programme to hunt possums and plant flax bushes, but it is the free enterprise economy that creates the most sustainable jobs.

“We need to be making it easier for firms to hire workers and expand their business.

“As well as its JobStart and BusinessStart programmes, which help businesses hire additional workers and redundant workers start a business, National has announced substantial tax changes to encourage businesses to invest. Firms will be able to write off $150,000 per new asset immediately.

“National would also extend 90 day trials to all firms – making it easier for companies to take a chance on new employees, and reverse recent further restrictions on inward investment.

“The government, meantime, is still in the mind-set of adding costs and regulations to business, such as last week’s higher waste levy charges,” Mr Goldsmith says.

Debt will increase whichever parties are in government after next month’s election.

A responsible one needs a plan to minimise  the borrowing and to pay it back.

Without that, Damien Grant says, the Government’s Covid-19 spending will be an economic albatross for decades:

 The true extent of the intergenerational crime that is being committed is becoming clear.

Today’s young are being robbed of opportunities and may be the first generation in our nation’s history to be significantly poorer than their parents.

Let’s start with the easy part: government debt. We spent $12 billion on the wage subsidy, the vast majority going to boomer-owned businesses to ensure they did not have to pay the full cost of their firms being shuttered.

Think about this for a moment. Almost every firm that got the money would have survived. This was a freebie to the capital-owning class; paid for with borrowed money that will not be re-paid by them, as their tax-paying days are coming to a close in the next decade. . . 

Whether or not most firms would have survived is debatable, as is the question of whether they were in trouble before the lockdown.

Wellington has decided, with overwhelming community support, to smash our economy in order to temporarily eliminate what has proved to be a virus with a far lower level of mortality than first advertised.

Fine. This isn’t something that I support, but OK. Let’s do this. However, if you are going to destroy tourism, damage hospitality and cripple construction, we need to be honest with ourselves; we are going to have to get by with less.

But we don’t want to do that. There is a collective refusal to accept that we are considerably poorer today than we were in January. There is an illusion of economic normality being created by enough ink to re-hydrate the Red Sea. . . 

National Party finance spokesman and putative post-election leader Paul Goldsmith estimates the projected $140b of future borrowings is equal to $80,000 per household.

Yet, no one seems to care. We’re in a panic over the fairness of charging people $3000 to cover the costs of an enforced stay in a quarantine hotel and the antics of school kids playing at being Nazis, but were heading off the edge of a fiscal cliff and … nothing.

The cost of borrowing will be paid for in two ways. Not only will this money need to be paid back; either through higher taxes, reduced government services or by the pernicious and economically destructive hidden tax of inflation, there is the opportunity cost of lost growth.

When you borrow to maintain consumption you are stripping resources from the economy that could have been deployed elsewhere for more productive activity; investment, primarily.

People wanting to borrow find they cannot get access to capital because the state is sucking up all available cash.

It isn’t just the cash available for lending either. It is the physical and human resources that entrepreneurs require to trade that are being diverted by the states’ uncontrolled spending. . . 

This government thinks it’s better at spending our money than we are and it’s spending is making it more difficult for private enterprise to flourish.

The lockdown produced a very good health response but the government response to the economic crisis will make it worse.

The problem isn’t just that sooner or later the debt will have to be repaid. It’s that every cent needed to repay it is a cent not available for essential services and infrastructure unless the economy starts growing, and growing well, again and there is no sign of anything from the government that will help us get out of this mess.


If it were done

May 21, 2020

Macbeth was talking about murder when he said, If it were done when ’tis done, then ’twere well It were done quickly.

That also applies to leadership tussles and National leader Simon Bridges has made the right call in summoning his caucus to settle the matter on Friday.

Every day’s delay is a day more when the issue festers with all the negative media attention that accompanies it leaving little clear air left to hold the government to account.

I am not going to give my opinion on who should be leader.

I support the party and whoever leads it and will continue to do so whether that is Simon with Paula Bennett as his deputy or Todd Muller and Nikki Kaye.

But I will say that whatever the outcome of the caucus vote, all MPs must be loyal to the leader and the party.

The leaking, the criticism and any show of disunity and disloyalty must stop.

Just a few months ago National was polling higher than Labour.

What changed was Covid-19 and the response to it.

The government’s abysmal record of doing very little it said it would until then has not changed.

KiwiBuild, child poverty, climate change  . . . it’s been lots of talk and very, very little action.

What has also changed is the economy.

The lockdown flattened the Covid curve and in the process has flattened the economy.

The government has voted itself so much money in response most of us can’t comprehend the amount. But worse, it doesn’t have a clear plan on how to spend it and at least as important, it doesn’t have a plan on how to repay it.

As Heather Roy explains in a letter to her children:

. . .By way of explanation, this is why I am sorry about your inheritance. Debt is what you have to look forward to and growth will take some time to return. In the short-term, New Zealand is facing a large rise in unemployment, predicted to peak at nearly 10 percent before falling back to 4.6% in 2022 (optimistic I suspect). Government debt will explode to more than 53 percent of GDP, up from 19% now. . . 

Not all debt is bad of course. It often allows you (and countries) to invest wisely in areas that will be of benefit later, but I fear the lack of vision and planning associated with the government borrowing an additional $160 billion means ‘wisely’ isn’t part of this equation. Vision and hope are important for people. We need to know where we are going – what the end game looks like and that the pain is worth bearing because a better life awaits. Hope too, is important. People will endure a lot if they have hope. I’m afraid I saw neither in the Budget last week. There was lots of talk of jobs, and lots of picking winners but not much in the offing for those already struggling and those who will inevitably lose their jobs when businesses go under.

Figures are tricky things. If you say them quickly, especially the billions, they don’t sound so bad. Most people can imagine what they could spend a million dollars on. Billions are a different kettle of fish. Many of us have to stop and think, how many 0’s in a billion? When figures are inconceivable, people give up trying to work out what they mean. After all, the politicians will look after the money side of things, won’t they? I hope you realise that is very dangerous thinking. To start with it’s not the government’s money – it’s yours and mine, hard earned and handed over to the government for custodial purposes.  We hope it will be spent wisely on health, education, social welfare, but after we’ve voted every three years, we don’t have any say on where it goes.

Beware of those saying we can afford to borrow this much money. Just as when we borrow from the bank to buy a car or house, when government’s borrow, repayments must be made and this limits the amount in the pot for spending in extra areas. The state of our economy is your inheritance: to contribute to your tertiary education, to educate your future children, to provide medicines and hospital treatments when you are sick, to help those who for whatever reason have no income. A mountain of debt places the prosperity of your children in peril.

Picking winners is dangerous too. Government’s love picking winners, especially in an election year. Election year budgets often resemble a lolly scramble with media reporting the “winners and losers”.  The simple fact is when you confer advantage on one group everyone else is automatically disadvantaged. Giving to the vulnerable is understandable but private industry winners are not. As an example, those who had been promised Keytruda (last year) to treat their lung cancer only to have that rug whipped out from underneath them now must be devastated to see the racing industry handed $74 million to build/rebuild horse racing tracks around the country. Flogging a dead horse instead of funding up to date medical treatments is folly and unfair in a humane society. 

I know fairness and equity are important to you all. Your generation has a more egalitarian outlook on life. Partly I think this is because you have not experienced real poverty and why New Zealand’s debt doesn’t bother you as much as it does me.

I have recently read two excellent writings by people I respect and I want to share them with you. The first is a report written by Sir Roger Douglas and two colleagues called “The March towards Poverty”. . . 

The report concludes “ For too long, we have lived with the fiction that we are doing well, lulled by successive governments into believing we truly do have a ‘rock star’ economy. Nothing could be further from the truth. Starting with Grant Robertson’s post-Covid budget, we must admit to the problems facing our economy and begin to deal with them. Otherwise, current inequalities will remain entrenched, we will continue to fall further behind our OECD partners, and the prosperity of our younger generations will be placed at peril”.

While I’m on the topic of legacies, the second article I want to share is by Chris Finlayson, Attorney General in the Key/English Governments for 9 years starting when I was also a Minister. I’ve been worried about the legality of many of the impositions we have experienced since the country was plunged into lockdown. I know you sometimes think all this theoretical  stuff isn’t that important, but in a well functioning democracy how the law is made and enforced is central to an orderly society we can have faith in. Chris has eloquently described these matters much better than I can in his opinion piece  on the rule of law:

“Some readers will no doubt respond that this rule of law stuff is all very interesting for the legal profession and retired politicians but is hardly of any practical impact given what New Zealand has just avoided.

I disagree. The former Chief Justice, Sian Elias, once said that if only judges and lawyers concern themselves with the rule of law, New Zealand is in trouble. She was right. Adherence to the concept of the rule of law would have helped avoid some of the basic failures of the past eight weeks – failures that should give all New Zealanders pause for thought.”

I’m afraid it’s too late to put Ardern’s debt genie back in the bottle. I apologise on behalf of my generation and older that you and your kids will carry this debt for all of us. My advice to you is to do what this government should have done. Cut costs and minimise your liabilities. Spend only on the essentials and invest in assets that will produce a safe dividend. Perhaps most important of all, stay engaged in our democracy and encourage your friends to do the same. If COVID-19 has taught the world anything it is this: politicians need to be closely scrutinised at all times but especially in crises like these.

The government’s arrogance was exposed a couple of weeks ago when ministers were ordered not to speak in the wake of the Covid document dump. It’s carried on this week when Tourism Minister Kelvin Davis refused to attend the Epidemic response Committee because, doing a Facebook Live session instead.

The country needs an opposition focussed on the government’s mistakes and formulating a plan to do much, much better, not on itself and a leadership struggle.

Whatever happens at Friday’s caucus meeting, this is what National must be doing, and doing it together in step with the leader.

And whether or not there’s a change of leader, one thing must not change – and that’s the decision to rule out any deal with New Zealand First.


No plan, wrong people

May 15, 2020

If you were looking for a Budget with a coherent plan for recovery, you wouldn’t have found it in yesterday’s:

Today’s Budget doesn’t have the plan we need to get New Zealand working again, Opposition Leader Simon Bridges says.

Kiwis have sacrificed so much through the restrictions of the lockdown, our collective efforts have so far worked well, now we need to get our economy cranking again.

“With a thousand people a day joining the dole queue we needed a proper plan. Spending money is the easy part. But investing billions where it will make the most difference was what we needed.

“Today we are seeing an extra $140 billion of debt. That’s $80,000 per household and it’s our children and grandchildren who will be paying for it. That’s equivalent to a second mortgage on every house.

“We will have $100 billion in deficits for the next four years.

“The Government will spend more than $50 billion, more than any Government has ever spent in any one Budget.

“It needed to be spent in a responsible and disciplined way. What this Budget lacks is any detail and accountability of how it will be spent and what it will achieve. . . 

This Budget had to be a big spending one, but did it have to be this big?

Today’s Budget reveals the sheer scale of the economic challenge New Zealand is facing, National’s Finance spokesperson Paul Goldsmith says.

“We’ve just been through a dramatic health crisis, now New Zealanders can see the scale of the economic challenge and just how serious is.

“Unemployment is set to skyrocket to 9.8 per cent highlighting why the first priority must be to save jobs.

“With an extra $140 billion in debt, we’re facing debt levels not seen in decades, that’s nearly $80,000 per household.

“The Treasury predictions of future Government tax revenue and economic growth appear highly optimistic. New Zealanders should brace themselves for worse if this Government carries on.

“We welcome the limited extension of the wage subsidy however the $50 billion slush fund is totally unacceptable. The Government has cynically set aside more than $20 billion that it can spend before the election.

“There is very little in the way of a growth plan in this budget, beyond $230 million to encourage entrepreneurship and some announcements in infrastructure that we all know they will struggle to deliver.

While we agree that Government support is necessary to save jobs, we must be mindful that every dollar spent in today’s Budget will need to be paid back.

“What we need now is a genuine growth plan and careful economic management to pay down debt and get us back to growth without the need for higher taxes. . .

The lack of a plan is a point Paul Henry made:

“I think there is a good chance we [New Zealand] will miss the opportunity. I was hoping that there could be a bounce forward not a bounce back. It’s the human way – a life of least resistance. I’m not depressed, I’m disappointed.” . .

“I haven’t seen a long-term plan yet. I think the last six weeks I’ve seen us fighting a fire and trying to get back on our feet. We need a long-term plan. The world’s changed, and it’s changed for many years to come.” . . 

“There is not one person in the Government that has a plan or can articulate a plan.

“A plan has a start, a process and a goal….not one Minister can articulate what that plan is.

“Instead, it’s panic and continue to employ as many people as possible. That is not a plan’s arsehole. . .

David Farrar scored the Budget against 13 principles and found it wanting.

Grant White, owner of Logitech, is disappointed in the Budget too:

. . .Covid-19 package estimated to save 140,000 jobs over two years, and create more than 370,000 new jobs. I can’t see it and I await the detail of just how that will be done.

What I do know is what the government clearly doesn’t understand. There is only one thing the economy needs right now – confidence. And this budget is not going to generate it, indeed its failure to stop short and medium term redundancies is going to lead to an even greater reduction in confidence.

Bryce Edwards calls it a Budget with big numbers but little vision:

. . The problem for the government is that it has already been struggling to keep to its promise of being transformative. Previous budgets have shown Robertson and his colleagues have been unable to break free from their cautious instincts.

With the Coronavirus crisis, the opportunity was handed to the government to reset the economy and society, and deal with some long-term problems. Robertson even spoke about this during the leadup to the Budget, saying that now was the time to address intractable problems of economic dysfunction, inequality, and environmental decline. He talked of not wanting to “squander the opportunity”. And yet, many will look at today’s big-spending Budget and ask: “Is that it?

The problem isn’t just there’s no real plan to repair the economic damage inflicted by the COvid-19 response, the government has the wrong people to lead the recovery too.

Empathy and communication are valuable commodities in politics but they’re nothing without the ability to make a good plan and make it happen.

Does anyone who remembers the many and gradually less ambitious Kiwibuild promises really believe that Labour will build the 8,000 houses promised yesterday?

How much faith can we have in a Cabinet with Phil Twyford, Minister for the Kiwibuild fiasco and now Minister for the failed Auckland light rail project?

Or Labour deputy and Tourism Minister Kelvin Davis who after being notably absent while his sector faced the sector’s equivalent of foot and mouth disease, only popped up to do a possum in the headlights cameo with Paul Henry?

Does Minister of Health, David Clark, who was sidelined during the worst health crisis the country has ever faced give you confidence? Or what about his deputy Julie Anne Genter whose responsibilities include vaccinations? Remember the measles epidemic and the on-going flu vaccination debacle?

This government doesn’t have a plan and it does have the wrong people.


Where are all the Ministers?

April 8, 2020

Several questions have arisen in the wake of Health Minister David Clark’s admission he breached lockdown rules twice, one of which is why was he in Dunedin rather than in Wellington during this unprecedented crisis?

That leads to another question, raised by Chris Trotter:  where are the other Ministers?

Beyond the sterling example provided by the Prime Minister and her Finance Minister, New Zealanders could be forgiven for wondering if there is anyone else in the Coalition Cabinet equal to the challenges thrown up by the Covid-19 Pandemic. One has only to consider the curiously disengaged behaviour of Health Minister, David Clark. Yes, there was that ill-advised bike ride, but of even more concern is the fact that, in the midst of a national health emergency, New Zealand’s Health Minister has isolated himself in his Dunedin family home – 600 kilometres south of the capital. Moreover, as citizens’ rights are being necessarily curtailed, why do we hear so little from the Justice Minister and the Attorney-General? With more and more “idiots” flouting the Covid-19 rules, where is the Police Minister?

Shouldn’t Police Minister Stuart Nash be in Wellington, working with officials and available to answer questions given the draconian powers police have under the state of emergency?

Shouldn’t Justice Minister Andrew Little be concentrating on the crisis rather than trying to rush through the contentious Bill on prisoner voting?

Civil Defence officials are regularly fronting the media, where is their Minister Peeni Henare?

MBIE has a huge job working out what’s an essential business and what’s not. Where is their Minister Phil Twyford and why isn’t he at the media briefings?

Phone and internet enable good communication but conversations and deliberations at a distance are second best when compared with being on the spot.

The response to Covid-19 has been likened to a war. Shouldn’t there be a war cabinet, albeit at the two metre distance required for anyone outside their bubbles, working to not only deal with the health crisis but formulating the plan that will be needed to counter the economic and social challenges that are already apparent?

It doesn’t need a whole of government approach – and given the three parties in this one that wouldn’t be advisable. But it does need more than a cabinet of two.

Could it be that the crisis has shown the shallowness of talent in the government and that as Chris Trotter says, we could be forgiven for wondering if there is anyone else in the Coalition Cabinet equal to the challenges thrown up by the Covid-19 Pandemic? 

Is the reason the reason there isn’t a new Health Minister because there isn’t anyone else up to the job?

This begs another question: if they’re not equal to dealing with these challenges, are they equal to dealing with the challenges the recovery will pose?


Cash spray BAU

December 2, 2019

What does it say about a party when a keynote speech on infrastructure offers nothing more than funding for school maintenance?

Jacinda Ardern and Grant Robertson have cancelled billions of dollars of infrastructure projects whilst dressing up business as usual school maintenance grants as infrastructure investment, National’s Economic Development spokesperson Todd McClay says.

“Kiwis deserve the roads, transport and education infrastructure that National was delivering, not spin from a weak and wasteful government that’s failing to deliver on its promises.

“Today’s education announcement is less than it’s wasted on 300 plus government working groups and committees.   

“This Labour-led Government’s poor economic policies have slowed New Zealand down and on its watch, New Zealand’s infrastructure plans are in disarray.

“Labour inherited a strong economy with GDP growth around four per cent. Latest ANZ and ASB forecasts predict a drop to two per cent at a cost of $1.7 billion in lost revenue each year.

“At the same time this Government has wasted billions on failing policies and isn’t delivering on the things that matter to hardworking Kiwi families.

“Our economy is slowing because of Labour’s failure to deliver. A complete stall in infrastructure spend and $400 million of business as usual school repairs and maintenance just won’t cut it.”

Taxpayers’ Union spokesman Jordan Williams describes the announcement as  a lazy attempt to buy votes, rather than better educations:

“This announcement appears more targeted at parents’ votes, than fixing run down schools, and you only need look at which schools get what to figure that out.”

“What a lazy and pathetic policy. A brand new school gets the same dollop of cash as a school with buildings from the 1950s.  No school gets more than $400,000, but none less than $50,000. Ultimately that approach means those schools which desperately need redevelopment get less.”

“Instead of asking officials which schools need what, the Labour Party has cooked up an ‘every school gets cash’ policy for the PM’s big speech. This is the sort of stuff you’d expect from an unorganised opposition, not a Party in Government.”

It is because Labour was disorganised in opposition it delivers this sort of stuff in government.

“If this is indicative of Labour’s big spending plans, spraying taxpayer cash, instead of micro targeting so taxpayer money goes to where it is most needed, hundreds of millions of taxpayers’ dollars are going to go down the drain.”

If a government that inherited a very healthy economy has to borrow to fund maintenance it has its spending priorities wrong.

Borrowing for infrastructure investment when interest rates are so low isn’t wrong per se, but if the government is borrowing to spend on infrastructure it ought to be investing in new projects not on-going maintenance.

Maintenance is business as usual (BAU), it’s shouldn’t be the recipient of a cash spray, but then spraying cash is BAU for this government.


Too much of a good thing

October 9, 2019

The government has posted a $7.5 billion surplus:

The Government has unveiled a bumper $7.5 billion surplus and the lowest debt levels in almost a decade, the latest Crown accounts reveal.

That level of Government surplus has not been seen since at least 2008, just before New Zealand felt the full effect of the global financial crisis. . . 

It’s taking all that money yet failing to deliver on its promises.

Surpluses are good, but $7.5 billion looks like too much of a good thing.

The government is either taking too much, spending too little, or both.

National’s Economic Development spokesman Todd McLay says:

“The Government should be looking to stimulate the economy by letting New Zealanders keep more of what they earn.

“Instead, it has piled on more and more taxes to the point where Grant Robertson is sitting on a big surplus while those living outside Wellington’s beltway struggle with rising living costs.

“One of the reasons debt is lower than forecast is because the Government is failing to invest in the infrastructure New Zealand needs.

“It has cancelled or delayed a dozen major new roading projects right across the country and replaced them with projects that weren’t ready, and won’t be ready for some time yet.

This isn’t just taking more tax and doing less with it. Stalling new roading work risks a loss of skilled people who will head overseas if there’s a gap between current projects finishing and new ones starting.

“Meanwhile, the Government has been piling on taxes. It has legislated to milk an extra $1.7 billion from motorists through fuel tax hikes and extra GST, while its misguided housing policies have pushed up rents and burdened landlords with extra costs and regulation.

“National legislated for tax relief that would have put more than $1000 a year extra into the back pockets of New Zealanders. This Government cancelled that. 

“We will index tax thresholds to inflation so that New Zealanders aren’t taxed more by stealth every year because of the rising cost of living.”

Sound economic management requires much more than creating surpluses.

The government must take enough, but not too much, and it must scrutinise all its decisions to ensure its spending effectively and prudently.

The large surplus suggests the government could be investing more in infrastructure and filling some of the gaping holes in the health system.

It also shows it is taking far more than it needs and it could be leaving us all with a little more of our own money by way of tax cuts.


3/5s of not very much

September 23, 2019

Steven Joyce gives the government some much-needed advice:

It was confirmed this week that New Zealand is now running at little more than half speed.

From growing at rates of 3½ to 4 per cent three years ago our economy at the end of June was only 2.1 per cent larger than it was the previous June.

That’s a problem firstly because our population is growing at about 1.6 per cent a year, so if our economy grows at 2 per cent then the amount of additional wellbeing per person (to coin a phrase) is three fifths of not very much.

Not very much is far less than we need for economic, environmental and cultural wellbeing.

The second problem is that our terms of trade (the prices of our exports versus our imports) are still very strong so we should still be cranking along. It’s a problem if we are slowing down when the world really wants to buy what we are selling. What happens if the world actually falls out of bed?

What happens is recession and maybe even depression.

The government has been quick to blame the world economy for our lower growth rate this week, but our terms of trade put the lie to that.

The third problem is that there is no sign of anything on the horizon that will lead to much of an upturn, and in fact all the signs are that we are going to slow further. Our businesses are in a funk because of what is known as regulatory overhang. In short, they are too fearful to invest because the government is making lots of rule changes that could mean they don’t get much of a return for the risk they take.

It’s not just farmers, other businesses are too scared to invest.

The government for its part seems inclined to shrug its shoulders and say “nothing to see here”. They observe we are still growing (slightly) faster than Australia so what’s the problem? That story is likely to change in the next six months as Australia’s tax cuts come through and their housing market picks up. Anyway weren’t we trying to grow a lot faster than Australia so we could close the income gap with our cousins across the Tasman – what happened to that ambition?

This government has no ambition for growth, only for regulate, tax and spend.

The fourth problem is that lower growth means less to go around. If we were still growing as fast as we were then in real terms our economy would be around $5 billion bigger this year than it is. That means more money for higher pay and more jobs, and of course about 30 per cent of it goes into the government coffers – which would pay for a lot more cancer drugs, teachers or electric vehicle subsidies.

How hard is it to join the dots between higher growth and more for essential services and infrastructure?

So what to do? Well if I could offer some gratuitous advice to the Finance Minister I think he should be working on baking a bigger cake, and I think the recipe is pretty straightforward. Its time to rein in some of his ministerial colleagues who are wreaking havoc with business confidence.

For example he should suggest the Minister of Immigration sort out his portfolio so that horticulturists can find seasonal workers and the international education sector can get up off its knees. He should tell the Minister for the Environment to come up with a more reasonable plan for water quality improvements and methane emissions reductions so farmers step back from the cliff edge, and the Minister of Education to stop stuffing about with the apprenticeship system.

He should encourage the Reserve Bank Governor to be less heroic on bank capital requirements, persuade his colleagues to do a backtrack on gas exploration now it is proven the ban is simply value destroying and does nothing for climate change, overrule the Greens to permit some gold mining, and stop taxing tourists more so the tourism sector starts growing again. He should cancel the return to industry-wide pay bargaining given that NZ First are never going to vote for it anyway, tell the Transport Minister to get on with building at least some of the stalled roading projects, particularly given that light rail is years away, and reverse at least one of the petrol tax increases.

Then he could watch the economy recover and start thinking about how he’s going to allocate the increased government revenues. And New Zealand will be in much better shape if the world economy does get worse. . .

He won’t of course and nor will he see that it’s the poor and the struggling middle that will be hurt the hardest by policies which hamper growth.


A question of competence

September 12, 2019

The resignation of Labour Party president Nigel Haworth could have put the lid on the controversy over serious allegations against a staff member in the Prime Minister’s office.

But it won’t when so many questions remain over the handling of the complaints which started the saga and the ongoing claims that Prime Minister Jacinda Ardern didn’t know that the allegations were of sexual assault.

The Spinoff gives a timeline of the inquiry and Paula Bennett used yesterday’s general debate to  speak on it: (You can watch and listen to the speech here.)

The Prime Minister says she did not know there were sexual assault allegations against one of her staff members until Monday. I could go through the various media reports since 5 August and my own representation since being contacted by victims to show the inconsistencies in this, but they have already been well traversed in the last 24 hours.

If the allegations were serious enough to hire a QC, were they not serious enough for the PM to need, and want, to be fully informed?

Even if the allegations weren’t about sexual assault, surely they were serious enough for the PM to be fully informed about them?

Even if she wasn’t going to speak to the complainants, as she should have, surely allegations serious enough to warrant an investigation warranted someone senior talking to them and reporting back to her?

Back in 2016, Jacinda Ardern wrote an op-ed about the scandal surrounding the Chiefs rugby team. She said that a resignation is not enough: “It’s the PR quick fix—usher the source of the controversy away. But that solves nothing. After all, apologies followed by silence changes nothing, and change is what we need.”

The resignation today of Nigel Haworth cannot be, in the Prime Minister’s words, “the PR quick fix—usher the source of the controversy away.” Yes, Mr Haworth needed to go, and it should have happened weeks ago, but what is also known is that the Prime Minister’s own senior staff and a senior Minister have known the seriousness of the allegations but have not acted.

The complainants were members of the Labour Party. They genuinely believed that the party would listen to their complaints and deal with the alleged offender appropriately, but nothing happened. It clearly has taken an incredible sense of frustration, disappointment, and disillusion for these people to come to me, a National Party MP, to try and see their complaints addressed.

These are serious allegations. The Prime Minister cannot keep her head in the sand and pretend like it is happening somewhere far, far away. It is happening in her own office, in her own organisation. She is the leader of the Labour Party. The alleged perpetrator works in her leader’s office—he works for her.

Less than a year ago, the Prime Minister was in New York at the UN, trumpeting “Me too should be we too.” Well, who knew that that meant her own office was following the path well trod by all those companies who drew a curtain over sexual misconduct and inappropriate behaviour.

I have been told by the complainants that Jacinda Ardern’s former chief of staff Mike Munro knew about the allegations, her chief press secretary, Andrew Campbell, knew about the allegations, and the director of her leader’s office, Rob Salmond, knew about the allegations. I have been told by two victims who work in Parliament that they went to Rob Salmond around Christmas time and made a complaint about the alleged perpetrator.

That’s a lot of people who would normally report to the PM who purportedly didn’t on this very serious matter.

The Prime Minister has constantly said her office did not receive complaints and, in fact, encouraged the victims to speak to their line managers. They did. They have told me they went to Rob Salmond and nothing was done, and we are expected to believe that none of these men in her own office told the Prime Minister about the allegations—all of this in the aftermath of the Labour summer camp scandal, when the Prime Minister made it very clear she expected to have been told. And are we really expected to believe that she didn’t know that her chief press secretary, Andrew Campbell, embarked on a witch-hunt to try and find out who in the Beehive was talking to the media about the allegations? The complainants certainly felt hunted and scared that he was trying to shut them up and stop them from talking to the media—classic bullying of victims, and hardly a victim-led response.

A victim has told me that the alleged perpetrator has deep alliances to Grant Robertson, that he was involved in his campaign for the Labour Party leadership, and that Grant Robertson has known the seriousness of these allegations. It is unbelievable that he hasn’t discussed this with his close friend and his leader.

This all smacks of a cover-up. This goes straight to the top: to the Prime Minister, to senior Cabinet Ministers, and—

SPEAKER: Order! The member’s time has expired. . . 

Haworth’s time has expired, will anyone else follow?

This debacle does go to the top and at the top we have a woman whose brand is that of compassion, empathy and caring; one who we are expected to believe is a capable leader, who is, like Prime Ministers ought to be, is fully in control.

All of that is at very grave risk as a result of the mishandling of this situation and all the questions that remain over it.

One of those questions is that of competence: if the Prime Minister, her senior colleagues and staff can’t be trusted to run her office properly and safely, how can they be trusted to run the country?


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.

 

 

 


Budget inquiry must be widened

June 4, 2019

The National Party is calling for the Budget inquiry to be widened:

The Prime Minister must be open and transparent about what questions she has asked her Finance Minister since spurious allegations were made that National acquired Budget documents through criminal activity, Deputy Leader of the Opposition Paula Bennett says.

National has written to State Services Commissioner Peter Hughes requesting the SSC widen its Budget investigation into Treasury and its Secretary to address a number of serious questions about the behaviour of both the department and the Finance Minister.

“The GCSB’s National Cyber Security Centre has said publically that it told Treasury its computer system was not compromised, yet both Gabriel Makhlouf and Grant Robertson chose to issue statements implying National carried out a ‘systematic hack’,” Ms Bennett says.

“Among the many questions that still need answering is what information Treasury and the Finance Minister had at their disposal before they issued those statements.

“The SSC inquiry should also include a complete review of all communications between the Finance Minister’s office and the Prime Minister’s office under the ‘no surprises’ approach.

“It took 36 hours for Treasury to come clean that it was sitting on a lie, and the Prime Minister needs to explain why she allowed her Government to mislead the public for so long.

“Did she and Grant Robertson ask the right questions of Gabriel Makhlouf, or did they take a ‘see no evil, speak no evil’ approach to all of this?

“It is concerning that even after Treasury admitted the Budget information was obtained without any hacking, its statement failed to offer an apology or take responsibility, and continued to disparage the Opposition in an entirely inappropriate way. . . 

John Armstrong isn’t waiting for an investigation he’s calling for resignations:

The chief executive of the Treasury, Gabriel Makhlouf, must resign.

It might have been Budget Day, thereby making his departure hugely inopportune for the Labour-led Government. That’s just tough. Makhlouf has to go. And forthwith. His exit on the most important date in the Treasury’s calendar may have piled humiliation on embarrassment.

It left Grant Robertson’s shiny new wellbeing budget feeling somewhat sick on its first public appearance. That’s just too bad. Makhlouf has to go. He has no choice in the matter. . .

He has to go — and for two simple reasons. Budget secrecy is sacrosanct; Budget secrecy is paramount. That is the bottom-line. It is non-negotiable. Any breach is sufficient grounds alone for heads to roll.

In Makhlouf’s case, there is another factor which should have sealed his fate — competence.

The ease with which National extracted Budget-connected information from the very heart of the (usually) most infallible branch of the Wellington bureaucracy demonstrated the shocking inadequacy of the Treasury’s cyber security.

It seems it is no exaggeration to say that the protections currently in place to guard that information have been at best lax and at worst non-existent. . . .

On top of that, the department’s handling of the aftermath of the breach of security raised further questions of competence.

The rapidity with which Makhlouf referred matters to the police following the hacking which soon enough turned out not to be hacking conveyed the impression that he believed National was responsible.

Although he endeavoured to avoid making that insinuation, in process, he veered dangerously close to soiling the Treasury’s neutrality.
While he might well be as neutral as he ever was, he is no longer seen as neutral. That is unacceptable. . . .

But this isn’t the only resignation Armstrong thinks should happen:

Should Robertson also be tending his resignation as a Cabinet minister or be sacked by the Prime Minister? The answer is an emphatic “yes”.

A breach of Budget secrecy — especially one of this week’s magnitude — is something so serious that resignation is mandatory.The applicability of ministerial responsibility demands nothing less. But it ain’t going to happen.

Robertson is exempt from having to fall on his sword. That exemption is by Labour Party decree. He is just too darned valuable.

Both he and the Prime Minister have made it very clear that they will move mountains to ensure Robertson emerges from this episode as untarnished as possible by placing responsibility for the breach fairly and squarely in the Treasury’s lap. . .

It’s been fascinating following commentary from the left which is trying to paint Simon Bridges as the wrong-doer in the botched Budget saga.

While we are mentioning Bridges, let’s deal with the bogus claims of his critics that his accessing of Budget documents was unethical, even if it was not unlawful. That is nonsense. Since the dawn of time, it has been incumbent on Opposition parties that they expose faults and failings in the policies and procedures adopted by the government of the day.

In revealing that the Treasury’s notion of what passes for Budget secrecy is screamingly flawed, Bridges has acted in the public interest.

Can his critics in Labour’s ranks put their hands on their hearts and affirm they would do things differently if they faced the same circumstances in Opposition? Of course not.

Bridges has simply been doing his job. On this week’s form, it is conceivable that he is going to be doing it a lot longer than both friend and foe have been predicting.

The machinations may be of little interest to any but political tragics but the botched Budget provided the Leader of the Opposition with an opportunity to shine in a week when the spotlight ought to have been on the Finance Minister and his leader, and shine he did.


Just when you think it can’t get worse

May 30, 2019

Treasury allowing Budget information to be found from a simple search on its own website was bad enough.

Calling it hacking and involving the police without properly investigating first was worse.

And just when the organisation ought to be showing it’s learned a lesson and taking extra care it does the opposite:

. . . 10:30am – In a major blunder, Treasury staff mistakenly handed out copies of the budget to journalists and political commentators.

Newshub’s Political Editor Tova O’Brien tweeted that she was given one of the top secret documents. When the recipients questioned whether they were supposed to see them before going into the lock-up, she says an official asked “Are you not Treasury?” before hurriedly taking the copies back. . . 

It’s a simple human error but given the lead-up it shouldn’t have happened.

So will heads roll?

Treasury bungled badly and Finance Minister Grant Robertson and Winston Peters made baseless accusations against Simon Bridges.

Will there be resignations or even apologies?

Don’t hold your breath.


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.


Rural round-up

March 1, 2019

Govt warned over loaning WMP $10m :

The Government was warned that loaning Westland Milk Products $10 million may set a precedent to other companies that they could turn to the Government when they could not get a loan from the bank.

In a briefing to Finance Minister Grant Robertson in September last year, released on the Treasury’s website this afternoon, Treasury officials said the decision to loan Westland the money should be deferred.

Despite this, two months later Regional Economic Development Minister Shane Jones announced that $9.9 million would be allocated to the South Island dairy co-op. . .

Fund farmers for the public benefits that come from their land – Mike Foley:

 Imagine if Australia’s private landholders, who manage half the country’s landmass, were investing significant funds into climate change reduction and environmental improvements.

That’s the scenario a cross-industry coalition of agricultural, forestry and environment groups are working towards, using the lead-up to the federal election to argue for policy change which could reimburse farmers for the public benefits delivered by their land management outcomes. . .

Fonterra’s milk-price news is soured by chairman’s critique of the company’s earning performance  – Point of Order:

At last a ray of sunlight into the country’s cowsheds: giant dairy co-op Fonterra has lifted its forecast farmgate milk price to $6.30-$6.60kg/MS, up from $6-$6.30, on the back of strong global demand.

The good news extends to next season, with ANZ economists predicting – because dairy commodity prices are improving more quickly than expected – the forecast for 2019-20 could go as high as $7.30kg/MS.

And there is something else Fonterra suppliers might get a bit of a glow from: the recognition by Fonterra’s top brass that the co-op has not been performing anywhere near where it should be. They’ll be looking for a sharp improvement, even if the co-op has a long way to go to match the achievements of smaller outfits like A2 Milk and Synlait. . . 

Fonterra Fund units hit record low – Rebecca Howard:

(BusinessDesk) – Units in the Fonterra Shareholders’ Fund hit a record low after the dairy cooperative cut its forecast earnings and said it won’t pay an interim dividend.

Fonterra downgraded its earnings forecast to 15-25 cents per share from a previous forecast of 25-35 cents per share, blaming the increased milk price which saw it hike the farmgate price to its supplier-shareholders.

The downgrade implies annual earnings of between $242-403 million in the year ending July, compared to the earlier projection of $403-564 million. . .

Fonterra to explore opportunities in complementary nutrition:

Fonterra has taken a stake in Motif Ingredients, a US-based food ingredients company that develops and commercialises bio-engineered animal and food ingredients. 

Fonterra joins Ginkgo Bioworks, Breakthrough Energy Ventures, Louis Dreyfus Companies and Viking Global Investors.

Judith Swales, head of Fonterra’s Global Consumer and Foodservice business, says the move is part of the Co-operative’s commitment to its farmer-owners to stay at the forefront of innovation to understand and meet the changing preferences of consumers. While the terms will not be disclosed, Fonterra’s investment represents a minority stake in the business. . . 

Ngāti Hine Forestry Trust Launches “Ngā Māhuri o Ngāti Hine”:

Twenty young men from Kaikohe and Moerewa are set to start their journey in the Forestry Industry as trainees on the new Ngā Māhuri o Ngāti Hine Mānuka Plantation Training Program.

This is the first part of a 2yr program funded by the Billion Tree fund through Te Uru Rākau and supported by the Ministry for Primary Industries Economic Development Unit. Ngāti Hine Forestry Trust is partnering with Johnson Contractors LTD to deliver a “learn while you earn” approach to L2 Forestry Training.

Ngāti Hine Forestry Trust Chair, Pita Tipene says “Ngā Māhuri o Ngāti Hine means the saplings of Ngāti Hine; this is an industry training program which embodies the kaupapa of Ngāti Hine Forestry Trust Mission – He Ringa Ahuwhenua, He Hanga Mahi, to actively grow our assets. These akonga (learners) are our hapū and community assets”. . . 


Hunter Downs irrigation scheme down

October 10, 2018
The Hunter Downs irrigation scheme hasn’t got enough support to go ahead.

Hunter Downs Water Ltd announced yesterday it did not have enough buy-in from landowners in its command area between the Waitaki River and Timaru.

The company owns resource consent to use up to 20.5 cumecs of Waitaki River water.

The irrigation proposition was launched in 2006.

In March last year, shares were offered in a $195million scheme to irrigate 21,000 ha and a government development funding grant of $1.37million had been made. By June 2017, the design was shrunk to 12,000 ha.

At the end of last year, South Canterbury rich-lister Gary Rooney’s offer to buy “dry shares” saved the project from being scrapped then.

In April, Finance Minister Grant Robertson announced Crown Irrigation Investments Ltd’s $70million term debt funding would no longer be available to the scheme. So the company released a new funding proposal in August, asking all prospective investors to reconfirm their commitment.

Not enough did.

Chairman Andrew Fraser said yesterday “a significant drop-off in support” meant the scheme could not proceed.

It was not all about intensifying land use and converting to dairying, but rather relieving pressure on existing water takes, decreasing reliance on surface water extractions, and using the plentiful Waitaki River resource, he said. . .

These schemes have to have the support of farmers. But without debt funding from Crown Irrigation, the cost would have been too high for too many. IrrigationNZ rightly calls it a lost opportunity for South Canterbury.

The scheme had the potential to significantly boost the Waimate economy, create jobs, improve people’s standard of living and help resolve water quality problems,” says Andrew Curtis, Chief Executive of IrrigationNZ.

“It’s disappointing that a scheme with wide reaching community benefits won’t proceed.”

“Much of Environment Canterbury’s plans for improving water quality in the South Canterbury coastal area rely on the development of the irrigation scheme to reduce pressure on groundwater and augment the Lake Wainono Lagoon. Hunter Downs still wants to use its consent to augment the Lake Wainono Lagoon, but the other environmental impacts of the scheme not proceeding will need to be worked through.”

The scheme wouldn’t just have drought-proofed farms, it would have    had environmental benefits in improved water quality and lagoon enhancement.

“While farmers benefit from irrigation development, so do local communities. Irrigation projects are difficult to get off the ground if farmers are the sole funders of major infrastructure projects. There have now been numerous studies completed of New Zealand irrigation schemes and all demonstrate that irrigation have significant benefits for local communities and create substantial new tax income for the government,” says Mr Curtis.

“Other countries are increasing their investment in water storage to recognise that their communities and economies need access to a secure water supply in a changing climate. New Zealand needs to keep making similar investments to future-proof our water resources and food production, and secure our export income.”

On the south of the Waitaki River the economic, environmental and social benefits of irrigation are obvious. Those on the other side of the river will miss out on all of that without the scheme.

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