Picking fruit, poisoning roots

21/05/2021

Yesterday’s Budget was a big spending one which omitted to give so much as a mention to where the money to pay for it is coming from:

Federated Farmers wants New Zealand’s farmers to pat themselves on the back for making it possible for the country to afford the Budget announced by the Government today.

In his speech to present the Budget Minister of Finance Grant Robertson acknowledged the financial carnage predicted by the Government last year did not eventuate.

“And that’s because New Zealand’s internationally competitive, resilient and fleet-footed farmers and growers could roll with the COVID punches and keep this country financially afloat,” Federated Farmers national president Andrew Hoggard says.

The Minister’s talk of winding back the clock to undo the reforms of the 80s and 90s will send shivers down the spines of farmers, especially the ones old enough to remember farming in those days.

Those reforms were tough on farmers and anyone whose income was related to farming.

The tough times were made tougher because while farmers were made to face the real world without subsidies immediately it took much longer for the rest of the economy to lose the protection of tariffs on inputs and and a heavily unionised workforce.

Even this government isn’t stupid enough to suggest reinstating tariffs to protect local producers but it is threatening us with industry-wide unfair pay agreements.

“Our sector is now internationally competitive, open and embracing of free trade. The 120 countries we trade with welcome our highly valued products, produced to environmental and animal welfare standards beyond what the world expects.

“The only reason farmers and growers were able to keep New Zealand out of the financial crap of last year was because we underwent the reforms of the 80s and 90s.

“We do this because it is the only way to operate a truly globally successful economy,” Andrew says.

Feds identified a few positives in today’s Budget, around additional support for streamlining farm planning, agricultural emissions research and boosting the effectiveness of NAIT.

“What we really need to see from this Government is an acknowledgement that the world pays us good money for the food we produce, and we need a regulatory framework that encourages and supports us to keep doing what we do.”

That’s what we need, but it’s not what the government is giving us.

Instead we’re facing more and tougher regulations that will impose higher costs on production.

Farming has proved it can stand on its own feet, but that’s getting harder and harder with government policies that, by accident or design, will hold it back.

This government is happy to distribute the fruit of the money tree but it’s doing nothing to help it grow and it’s in grave danger of poisoning the roots.


A freeze by any other name . . .

11/05/2021

The PM and Finance Minister are both trying to say the public wage freeze announced last week is not a freeze:

Prime Minister Jacinda Ardern and her Deputy, Grant Robertson, were both forced on the defensive this morning over their public sector wage freeze decision.

They both rejected that the moves to restrain public sector wages was a “freeze”, as there is still some room for movement in pay scales.

Speaking to reporters at the post-Cabinet press conference, Ardern said she had no plans to reverse the Government’s decision.

But she has admitted that she thinks the Government should have put more emphasis on the fact that public servants earning more than $60,000 a year can still move up through their pay bands. . . 

Moving up through a pay band is not generally regarded as being the same as a pay rise and if people aren’t getting a pay rise it’s generally regarded as a pay freeze.

That the government realises the need to restrain its spending and is doing something about it ought to be a good thing but in targetting people nurses, police and teachers, most of whom are underpaid for the work they do and responsibilities they have, they’ve hit the wrong target.

It would have been far better to follow the example of John Key and BIll English during the GFC when total public service spending was frozen, excepting health and education and with the direction there was to be no reduction in front-line services.

That left the people paid to manage their departments and ministries to do so by cutting fat and showed the workers, and public that frontline staff were valued.

Instead the government has demonstrated its propensity for control freakery once again, upsetting public servants, unions and gaining no points from the public who generally don’t think the frontline staff in education, health and policing are overpaid.

The government was probably trying to show it can manage its finances well. It hasn’t done that and has also demonstrated political mismanagement in the process.

 


Proud of so little

06/05/2021

If Ministers were doing their jobs we wouldn’t need a Minister of Delivery.

But they’re not.

The Deputy Prime Minister appears to be pushing ahead with an implementation unit without any idea of what that unit will actually deliver, Shadow Treasurer Andrew Bayly says.

“It remains unclear what this implementation unit will actually do, other than add another layer of taxpayer-funded bureaucracy to the public service in Wellington. Grant Robertson didn’t have any satisfying answers when quizzed about this in Parliament today.

“If the Deputy Prime Minister isn’t sure where to start, National has a few ideas. How about Labour’s KiwiBuild disaster, which was supposed to have delivered 16,000 houses by June but has only managed about 870.

“Labour could also do something about the light rail debacle in Auckland that was meant to be up and running between the CBD and Mt Roskill by now but hasn’t even started.

“There’s also the housing shortage, the Government’s failure to lift 100,000 children out of poverty, as promised, and poor delivery on mental health that could do with some attention.

“The reality is, this implementation unit is a big vote of no confidence by Jacinda Ardern and Grant Robertson in the ability of Labour’s other Cabinet Ministers to do their jobs properly.

“The Key and English governments did not need an implementation unit to get things done, nor did the Helen Clark-led Labour Government either. They pushed their Ministers to do their jobs properly.

“Perhaps if Grant Robertson had established this unit back in 2017, Labour’s big election promises wouldn’t be in such tatters now.”

And that’s not all they haven’t done. Only half the shovel-ready projects that were announced will be delivered.

None of this is something anyone who understands the difference between announcing and performing would be proud of.

 


No need to spend it all

05/05/2021

This is not a bonus:

Almost $1 billion that was allocated for the Covid-19 response last year was never spent, and Finance Minister Grant Robertson has put it back into the Covid fund to spend on the recovery.

Robertson delivered the first of his pre-Budget speeches this morning to the Wellington Chamber of Commerce, saying Budget 2021 would be a “recovery Budget”. . . 

Finding you’ve spent less than you borrowed doesn’t mean you should spend it all.

Responding to the Finance Minister’s decision to reallocate $926 million from the COVID-19 response fund, New Zealand Taxpayers’ Union spokesman Louis Houlbrooke says:

“Grant Robertson is acting like he’s got a spending target. Someone needs to tell him he doesn’t actually have to spend every last cent from his COVID-19 response fund.”

“The Government’s decision to borrow more than $100 billion has monumental consequences for future generations of taxpayers. That borrowing was justified purely on the basis of dealing with COVID-19. If we no longer need the money for our COVID-19 response, then it should simply not be spent.”

“We’re currently looking at a forecast of around $100,000 in government debt for every household in the country. The Finance Minister should be using whatever fiscal wriggle room he can find to reduce that burden.”

Not spending as much borrowed money than at first anticipated doesn’t give you more money. It could give less debt if it’s not spent.


Stop tax increases by stealth

09/04/2021

National is seeking to stop tax increases by stealth:

National is committed to letting Kiwis keep more of what they earn and has proposed new legislation that will end tax hikes by stealth, Tauranga MP Simon Bridges says.

Mr Bridges’ Income Tax (Adjustment of Taxable Income Ranges) Amendment Bill, drawn from the Member’s Ballot today, will require tax thresholds to be adjusted every three years in line with the cost of living. This will mean that within a year, after every election, Treasury will advise the Government on how much the thresholds should be adjusted for inflation.

“This will stop New Zealanders moving into higher tax brackets even when their income isn’t keeping up with the rising cost of living, putting an end to inflation being an annual tax increase by stealth.

“New Zealanders will be able to keep more of what they earn, helping them stay on top of rising costs for necessities like petrol, rent and electricity.

“The Tax Working Group advised the Government that bracket creep could lead to as much as $1.7 billion in stealth tax increases in a given year. The Government is taking more than it needs, only to waste billions on bad spending.

If passed into law, this change will make a real difference, Mr Bridges says.

“It will mean Kiwis can keep more their own money in their own bank accounts,” Mr Bridges says.

“This law change shows how committed National is to helping New Zealanders get ahead.

“There is widespread agreement that bracket creep is a hidden tax increase on hard working New Zealanders, and I urge Finance Minister Grant Robertson to stop taxing Kiwis by stealth and wholeheartedly support this law change through all stages.”

The Taxpayers’ Union applauds the Bill:

. . . Union spokesman Louis Houlbrooke says, “From a taxpayer perspective, this is one of the most important private members’ bills we’ll see in our lifetime. For decades successive governments have exploited inflation to sneakily increase the average tax rates levied on New Zealanders. It’s a stealthy, dishonest tax hike that makes a liar of any politician who promises ‘no new taxes’.”

The Taxpayers’ Union has campaigned against bracket creep since 2016. In a submission to the Tax Working Group, the Union highlighted bracket creep as the ‘under-arm bowling of our tax system’, explaining: Inflation sees taxpayers’ nominal incomes, but not real incomes, increase. Because income tax thresholds are fixed, taxpayers face a higher proportion of their income lost to income tax, without any corresponding increase to their real income.

“Take our 30 percent income tax rate. When it was introduced in 2010 for income over $70,000, that was the equivalent of $83,000 in today’s money. That meant only high earners were hit. But today, $70,000 is an unremarkable salary. It’s atrocious that middle-income New Zealanders are forced to give up 30 percent of any pay rise to the taxman.”

“Labour has no good reason to block this bill. They’ve already rushed through unannounced taxes on housing, so they don’t need extra revenue. In fact, under Bridges’s bill, the Minister of Finance could still veto bracket adjustments on a case by case basis. Of course, he’d have to explain himself to New Zealanders, but he shouldn’t be afraid of accountability.”

Having no good reason to block the bill might not be enough to stop Labour doing that.

But if it is serious about its quest for wellbeing and the need for kindness, it will do the right thing and back this bill to stop the stealthy tax increases by adjusting thresholds in line with inflation.


Broken promises and bromide

24/03/2021

Yesterday’s announcement on housing was mere tinkering.

It broke the promise of Grant Robertson that there would be no changes to the bright line test and Jacinda Ardern’s promise there would be no capital gains tax while she was leader.

What makes it worse is that the broken promises will do nothing to solve the housing crisis. It could well decrease the supply of rental accommodation and will lead to increased rents.

That pressure on rents will be compounded by the decision to single property owners out by ending their ability to claim the cost of interest against their income for tax purposes.

This is not as the government asserts, and some in the media parrot, closing a loophole, it’s a change to tax law that has until now applied to every business.

Higher costs for landlords will inevitably be passed on to their tenants.

Increasing income caps and house prices for First Home Grants is a token gesture when house prices are so high and if it does anything it will add fuel to the fire. Anything which makes it easier for people to buy a house without increasing the supply will push up prices.

At first glance the infrastructure accelerator looks good, but will it be effective?

. . .However, Kiwibank chief economist Jarrod Kerr said the policy changes simply “tinkered at the edges”, and were not enough to address the systemic supply issues that have caused New Zealand’s house prices to soar beyond the reach of many.

“It was pretty disappointing to be honest. Some of the ideas are good, but the size is pathetic. It’s a drop in the bucket and it’s a leaky bucket at that.”

Kerr said the tool with the most potential was the $3.8b infrastructure accelerator, which is intended to help local councils create the necessary services infrastructure – plumbing, roads, power – to unlock remote land for property development.

“I think the idea is great; we need to get funding into councils to sort out woeful infrastructure and get it to areas that need to be developed. But the fact that it only got $3.8b means that it’s going to be ineffective – $3.8billion spread across all our councils is a rounding error.” . . 

The whole package is underwhelming, it’s just broken promises and bromide that ignore the root cause of the crisis – a lack of supply and the foundation for that is an unwillingness to cut the red tape that holds back development.

 


Stick to your word

05/12/2020

The Taxpayer’s Union is calling on Grant Robertson to keep his word :

The New Zealand Taxpayers’ Union has today launched its ‘Stick to Your Word’ campaign calling on Grant Robertson to keep his promise made six weeks ago not to touch the bright line test.

Union Campaigns Manager, Louis Houlbrooke, said: “Despite promising prior to the election not to change any taxes beyond what was in Labour’s election policy, Robertson is now asking Treasury for advice on an extension of the ‘bright-line’ test.”

“Extending the bright line test is effectively imposing a nasty capital gains tax – at a rate of up to 39% – for property owners who sell within ten years.”

“Taxing houses will not make them more affordable. What it will do is hammer people who need to cash out of property for personal reasons. It would reduce liquidity in the market, and could even incentivise politicians to drive up house prices further in order to reap tax revenue from the capital gain.”

“If the Government decides it’s okay to break its tax promises, it won’t stop at the bright line test. A Green Party-style asset tax or even a Michael Cullen-style capital gains tax could be back on the agenda. That’s why we’ve set up a tool for New Zealanders to tell Grant Robertson to keep his promises.”

The campaign advert can be viewed here .

New Zealanders are encouraged to write a postcard to Mr Robertson via the website StickToYourWord.nz

 


Rural round-up

19/09/2020

Fonterra back in the black :

Fonterra has posted a $659 million profit and will pay farmers $7.19/kg milksolids for the 2019-20 season.

It has held the forecast for the 2020-21 season at $5.90-6.90/kg MS.

The dividend for the 2019-20 season is 5c a share.

Fonterra chief executive Miles Hurrell says 2019-20 was a good year for the co-op, with profit up, debt down and a strong milk price.

“We increased our profit after tax by more than $1 billion, reduced our debt by more than $1 billion and this has put us in a position to start paying dividends again,” he says. . . 

Farmers and growers call for help with labour shortages – Katie Todd:

Farmers and growers say if agriculture is going to drag the country’s economy back into shape, they will need help to fix labour shortages.

While urban centres went into a strict lockdown in April and May – contributing to a 12.2 percent tumble in gross domestic product – agriculture, forestry and fishing saw only a marginal drop of 2.2 percent.

The pandemic has done little to disrupt business on Damien Roper’s south Taranaki farm, home to 420 dairy cows.

He said even in the throes of the level four lockdown, his classification as an essential worker made it almost business as usual. . . 

Urgent government intervention required for horticulture industry Finance Minister told :

Industry representatives met with Finance Minister, Grant Robertson in Hawke’s Bay earlier this week to discuss challenges facing the regional fruit and wine industry. The main item of discussion was around labour pressure for the coming grape, summerfruit and apple harvests – pressure that will see more than 10,000 seasonal workers needed.

Industry welcomed the Minister’s positive message that the government understood the issue facing these industries.

“With backpackers and Pacific seasonal workers down by 50,000, the industry is facing an incredibly difficult task across New Zealand this season,” says New Zealand Apples and Pears Inc (NZAPI) chief executive Alan Pollard. . . 

‘Languishing’ Jobs for Nature process leave tourism operator fearful – Tess Brunton:

A South Island tourism operator says he could have prevented redundancies if wasn’t for delays to a nature-based job creation scheme.

More than $1 billion was earmarked for the Jobs for Nature programme in May as part of the government’s cross-agency Covid-19 recovery package to run over four years.

Today, Minister of Conservation Eugenie Sage announced an extra $19.7 million for kiwi conservation aimed at reversing the decline of the species.

While the funding has been welcomed, some applicants have been waiting months in limbo unsure if they will get a green light. . . 

Agricultural policy must incentivise innovation:

Agcarm calls on the government to introduce managed risk to legislation. Its chief executive Mark Ross says that the rural sector faces many, and often conflicting, demands. “Our farmers and growers are faced with the challenges of growing more food and fibre in reducing hectares of available space. They are also being asked to reduce greenhouse gas emissions, keep up with international best practice, minimise residues and manage resistance.

“To support our farmers and growers to meet these challenges, we must allow them to have access to the latest technology and the most effective and sustainable animal medicines and pesticides to protect animals and crops from devasting losses,” he says.

In its election manifesto, Agcarm asks the new government to modernise the regulatory environment for new product approvals and base scientific decision-making on facts and evidence, not political popularity. . . 

Rural market poised for spring:

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 121 more farm sales (+45.7%) for the three months ended August 2020 than for the three months ended August 2019. Overall, there were 386 farm sales in the three months ended August 2020, compared to 341 farm sales for the three months ended July 2020 (+13.2%), and 265 farm sales for the three months ended August 2019. 1,252 farms were sold in the year to August 2020, 7.2% fewer than were sold in the year to August 2019, with 22.9% less Dairy farms, 14.1% less Grazing farms, 15.3% less Finishing farms and 6.1% more Arable farms sold over the same period.

The median price per hectare for all farms sold in the three months to August 2020 was $25,657 compared to $25,346 recorded for three months ended August 2019 (+1.2%). The median price per hectare increased 10.8% compared to July 2020. . . 


Fiddling while country burns

10/09/2020

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

03/09/2020

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

31/08/2020

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

27/08/2020

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

11/08/2020

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

04/08/2020

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?

03/08/2020

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

21/05/2020

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

15/05/2020

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?

08/04/2020

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

02/12/2019

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

09/10/2019

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.


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