Leaving us with more

September 18, 2020

National is promising tax cuts to help us through the Covid crisis:

National’s massive tax stimulus package will put more than $3000 extra into the pockets of hard-working Kiwis on middle incomes, National Party Leader Judith Collins says.

You can read a copy of National’s Economic & Fiscal Plan here.

Ms Collins has announced the next National Government will let Kiwis keep more of what they earn by lifting the bottom tax threshold from $14,000 to $20,000, the middle threshold from $48,000 to $64,000 and the top threshold from $70,000 to $90,000.

These changes will be in place from December 1, 2020 until March 31, 2022. The total cost of this over the 16-month period is estimated to be $4.7 billion.

“Today we are facing the biggest economic downturn the world has seen since in living memory. But with the right leadership and economic plan we can grow our economy and keep Kiwis in jobs,” Ms Collins says.

“To keep our economy ticking, New Zealanders need money to spend. National will deliver temporary tax relief that puts more than $3000 – or nearly $50 a week – into the back pockets of average earners over the next 16 months.

“This will give Kiwis the confidence to go out and spend, which will be crucial for our retail, tourism and hospitality businesses to survive this economic crisis.

“New Zealand is facing a much longer and more painful economic shock than earlier forecast. We need a serious plan for economic growth to get us back on track.”

National’s Finance spokesperson Paul Goldsmith pointed to higher taxes as Labour’s only plan to get New Zealand out of this economic hole.

“No country has ever taxed its way out of a recession – and this is a big one we’re in now.”

As well as tax relief for households, National will double the depreciation rate for businesses that invest in new Plant, Equipment and Machinery over the next twelve months. This will bring forward the amount a business can claim in depreciation for new investments, which will stimulate investment by increasing the return on capital.

Doubling the depreciation rate is expected to cost $430 million a year for five years, while increasing tax revenues in out years.

“Our stimulus package has been fully-funded and costed, and is included in our independently reviewed Economic and Fiscal Plan released today,” Mr Goldsmith says.

“National’s plan carefully balances the need to drive economic stimulus, increase investment in core public services and restore government debt back to prudent levels.

“Labour, on the other hand, has announced it will increase taxes during a recession. The contrasting approaches to the economy at this election could not be clearer.

“Judith Collins and her strong National team will bring the leadership, experience and vision needed to get our country back on track.”

You can read a copy of National’s Economic & Fiscal Plan here.

You can view a copy of National’s Personal Tax Relief Policy here.

You can view a copy of National’s Double Depreciation Rate Policy here.

David Farrar has worked out what the tax cuts mean for different income levels and conclude:

This provides New Zealanders with a real choice – a Government that will help people through the tough times by temporarily reducing taxes, or a Government that will increase taxes.

If you’re not sure which would be better, ask yourself who would make better use of the money you earn – you or the government?

If you’re still not sure, think about what’s more efficient, letting us keep a bit more of what we earn and giving us the choice about how, and how much we spend, or having the government take more and absorbing some of that in the bureaucracy before the rest can be spent and only then dribble through the economy?


Decade of deficits

September 17, 2020

Treasury is forecasting more than a decade of deficits:

With deficits projected out to 2033/34, there needs to be urgent action from all political parties on addressing the national debt, says the New Zealand Taxpayers’ Union. 

Taxpayers’ Union Campaigns Manager Louis Houlbrooke says “After many years of prudent fiscal management from National and Labour, it Treasury is now projecting 15 years of deficits in a row. As a result, net debt will be $31 billion higher – or $17,000 a household – in 2033/34 compared to the Budget 2020 projection. The Government needs to give us a credible path back to surplus rather than leaving taxpayers on the hook for a never-ending accumulation of debt.”

“The major reason for the more than a decade of deficits ahead is Treasury’s belief that our economic recovery from Covid-19 will be more anaemic than previously expected. The message is clear: our recent track-record of weak economic growth isn’t just hurting incomes and entrepreneurship; it’s going to have a serious impact on our public debt.

“The solution to the forecast decade of deficits is to cut wasteful spending, end regulatory taxes on business which stifle growth and employment, and deliver modest tax relief to households and employers to get the economy growing again.” 

It’s 12 years since Treasury last forecast a decade of deficits.

That was when a Labour-led government propped up by New Zealand First was on its last legs. It was also before the global financial crisis hit.

National came to power and in spite of the GFC and Canterbury earthquakes, returned to surplus in less than 10 years.

Who will you trust to turn the Treasury forecast round this time – the government that squandered the surplus and had the country back in deficit before Covid-19 hit, or a National-led government that understands that the quality of spending is far more important than the quantity?

Today’s Pre-election Economic and Fiscal Update forecasts a longer and more painful economic crisis than earlier forecast and requires a serious growth plan to get New Zealand back on track, National Party Leader Judith Collins and Finance spokesperson Paul Goldsmith say.

“Our economy is forecast to have shrunk by 16 per cent in the June quarter, and we will be taking on even more debt, an extra $200 billion. Every dollar and cent of this will have to be paid back by our children and grandchildren,” Ms Collins says.

“Unemployment will be substantially worse in 2022 and 2023. Treasury predicts 100,000 more New Zealanders will lose their jobs in the next two years.

That’s more than 10,000 more than the total population of Palmerston North.

“The Minister of Finance shouldn’t try to sugar coat these figures. He has taken a rose-tinted glasses view at a dreadful picture that cannot be described as anything other than catastrophic. Any short-term improvement on the Budget forecasts is far outweighed by the worsening picture past 2021.

“The contrast between Treasury’s estimate of more than 16 per cent contraction in our economy in the June quarter compared with 7 per cent in Australia shows he should be careful about making comparisons,” Ms Collins says.

“Grant Robertson’s only plan is higher taxes, and no country has ever taxed its way out of a recession, and this a huge one,” Mr Goldsmith says.

“Treasury is forecasting that under Labour New Zealand will be in deficit every year for at least the next 15 years. Grant Robertson and his Government have no plan to get New Zealand back into surplus. Ever.

“New Zealanders have a choice for our economic recovery: more government programmes, welfare and costs for business under Labour or lower taxes, more business investment and quality infrastructure under National.

“National has a comprehensive plan to secure our border and prevent New Zealand from yo-yoing in and out of lockdown. Effective border management, coupled with common sense and pragmatism around the rules, is an important aspect to help our economy can recover.

“We will do everything we can to make it easier for businesses to hire – 90 day trials, flexible employment laws, low taxes and innovative policies like JobStart and BusinessStart.

“Our economic plan of job friendly policies and investment in quality infrastructure will grow our economy, give businesses the confidence to grow and restore household incomes for New Zealanders,” Mr Goldsmith says.

“National will release our fiscal plan soon which will carefully balance the need to inject stimulus, increase investment in core public services and restore Government debt back to prudent levels,” Ms Collins says.

We couldn’t afford the current government before Covid-19 hit, we certainly can’t afford another three years of mismanagement.

 


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.


Better health beats another holiday

September 8, 2020

The country is still stuttering along at lockdown 2 (or 2.5 in Auckland).

The government is borrowing every cent it’s spending.

The country, and the world is facing the worst economic crisis in decades and yesterday we got a contrast in priorities from National and Labour.

National launched a policy taking a health approach to the meth pandemic:

National has outlined an integrated and comprehensive plan to tackle the issues caused by methamphetamine use. Our Plan will deliver a response work programme, unifying resources from Justice, Health, Police and Customs.

National’s plan tackles the harm of methamphetamine use, restoring hope to people trapped in cycles of drug dependence and challenging those who peddle misery in our communities.

The use of this drug tears families apart, fuels violence, enriches criminals and destroys lives. We cannot tolerate the continued misery this drug causes, which leads to rising levels of violence and poverty, and widespread social harm.

Methamphetamine is the most commonly detected illicit drug nationwide. Social agencies identify it as a significant factor in domestic and family violence.

There is no single solution to what has become a scourge on our society. A National government will tackle this problem from all angles, addressing both demand and supply.

National Plan to tackle demand will:

  • Deploy the Matrix Methamphetamine Treatment Pilot Programme across District Health Boards to provide direct support to those recovering from methamphetamine use.
  • Add 13 detox bed for methamphetamine across New Zealand, ensuring every District Health Board has at least one.
  • Ensure at least one methamphetamine specialist per District Health Board is available to assist with in-patient detoxing from methamphetamine.
  • Establish a contestable fund of $50 million to pilot new or scaled-up whole-community harm reduction programmes.
  • Establish best practices for frontline police to refer meth users to DHBs, Ministry of Social Development, education resources and community-based support.

National will reduce demand by improving the health response and providing treatment options that are not available today.

There must also be a strong response from our law and order agencies to disrupt those trying to bring meth into the country.

We will build capacity to interdict the international crime cartels that are bringing this problem to our shores. Good intelligence and international co-operation will be a priority under National.

There can be no tolerance for the dealing and supply of methamphetamine. Those who peddle this drug are responsible for the misery and social harm it causes.

National’s Plan to tackle supply will:

  • Increase funding for drug intelligence to enable Customs, Police and health authorities to identify drugs coming into the country.
  • Increase funding for Police and Health to identify new drugs and bad batches sooner.
  • Introduce more drug dogs at airports and ports.
  • Identify a new supply disruption strategy to reduce methamphetamine use in Corrections facilities.
  • Target domestic organised crime networks with extra focus and resourcing from Police.

National has a strong track-record of fighting the meth scourge. The Methamphetamine Action Plan we introduced saw increased seizures of methamphetamine and a 59 per cent reduction in use as a proportion of the population, between 2009 and 2015.

Labour rescinded National’s refreshed Action Plan in 2018 in favour of an ad-hoc, piecemeal approach to drug harm.

We will re-establish the social investment approach across the justice system, making sure the impacts of crime are addressed, as well as the causes of it.

New Zealand needs a co-ordinated and effective response to the methamphetamine problem.

With this Plan, National will deliver one.

You can read National’s Tackling Methamphetamine Policy Factsheet here.

This is a positive policy that takes a health approach to addicts and a cross agency approach to the people who peddle the drug.

And what’s Labour’s priority?

Another public holiday:

New Zealand is in the biggest economic crisis in a generation and Labour’s answer to this is another public holiday, National’s Finance spokesperson Paul Goldsmith says.

“At a time when the economy is shrinking and we are losing jobs, it’s tone deaf for Labour’s second policy announcement to be an additional public holiday.

“More and more New Zealanders want to celebrate Matariki, but if it is to take the form of a public holiday it should replace an existing one.

I like the idea of a holiday to celebrate Matariki. Mid winter is a much better time for fireworks than GUy Fawkes (which isn’t a holiday) or New Year. But my support is for it to replace an existing one not as an extra one.

“Businesses up and down the country are under colossal pressure right now, they’re the ones who will have to pay for another public holiday.

“It’s a pity that Labour Leader Jacinda Ardern has shown zero empathy for the tens of thousands of New Zealanders who are struggling right now to keep their businesses afloat and employ Kiwis.

“A new public holiday won’t mean much to the tens of thousands of families who are now on the unemployment benefit.

“The absolute focus should be on saving jobs and creating new ones, but we’re not seeing that from Labour.”

The Taxpayers’ Union describes it as another tax on employers:

An additional public holiday is a blatant tax on employers, who will be forced to pay workers for a day off. It will also reduce overall productivity, which means a smaller economy and fewer jobs. An economic recession is the worst time to introduce this kind of regulatory tax.”

“If the intention is to acknowledge the cultural significance of Matariki, there’s an opportunity for a middle road: introduce the new holiday, but scrap Labour Day, an obsolete hangover from international Marxism that most New Zealanders just consider to be a day off.”

The concept of an International Workers’ Day (also known as Labour Day) began its spread after a resolution by the Marxist International Socialist Congress in Paris, 1889.

The EMA is unimpressed:

The EMA says the Government’s announcement today of an extra public holiday for Matariki from 2022 is unlikely to find favour with its business members.

Chief Executive Brett O’Riley says it will be seen as another cost to business and is unlikely to support increased tourism, which was the original argument for an extra public holiday during COVID-19 Alert Levels 1 and 2.

Some tourism businesses already close on public holidays because any increase in customers doesn’t cover the extra cost of wages and time off in lieu for staff who work on those days.

Mr O’Riley says the Government priority should be focused on fixing the dysfunctional Holidays Act.

“We need to see a simplified and streamlined process for calculating entitlements and creating efficiencies for business.”

“We understand the cultural argument about Matariki being considered important enough for a public holiday, but it could have been exchanged with one of the other public holidays,” he says. 

Heather du Plessis-Allan likes the idea but not the timing:

. . . Labour seem completely tone-deaf on this.

At a time when government should be reducing as many burdens on business as possible… they’re doing the opposite.

In this term alone they’ve increased maternity leave to 26 weeks, domestic abuse leave to two weeks, upped the minimum wage by 20 per cent, scrapped 90-day trials, regulated when employees must take breaks, are apparently considering doubling sick leave to two weeks and now this.

All in all that is a huge amount of regulation and cost added to businesses who are fighting for their survival right now.

It makes it slightly better than the policy is deferred to mid-2022. But, in truth, businesses will still be struggling then. ASB today projected it won’t enter recovery mode until 2023.

You have to wonder also at the priorities here. If this is the policy to kick off the campaign property you have to wonder whether Labour either doesn’t appreciate what’s headed our way or just knows it can get away with it while voters live in a fantasy land of sugar money propping up the economy.

This is a great idea, but it’s a great idea for another time. Right now, we have bigger problems than the need for another public holiday. 

We already have four weeks’ annual leave and 11 statutory holidays.

If ever we could afford another day off it isn’t now.

The contrast between the two policies couldn’t be starker – National’s will tackle a very real problem, Labour ignores the problems we’re facing.


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.


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.


Quotes of the month

August 1, 2020

Nearly every day….I get a random stranger go out of their way to walk up to me in the street and say ‘I want to let you know I’m very grateful for what you do’. So at some point you decide do you want to listen to the one negative person, or 50 positive people?.’ – Paula Bennett

Homeowners in Kelburn who like the idea that we lead the world in banning plastic bags (we don’t) and seeing statues of Captain Cook replaced with Pohutukawa trees are going to spill their almond milk at the prospect of paying an annual two per cent tax on their unrealised capital gains. Wealthy Green voters, I am willing to wager, prefer looking good to doing good.Damien Grant

Let’s understand that dying is an intrinsic part of life. Let’s talk about what end-of-life care actually is and strengthen, extend and improve what we already have in our palliative care. Such care is a commitment, one we need to make. Euthanasia is an avoidance of this commitment. – Serena Jones

Without food, there is no life. The trick is to produce it in ways that also yield rich soils, thriving forests, healthy waterways and flourishing communities. As the Parliamentary Commissioner for the Environment pointed out 10 years ago, in tackling climate change, it’s vital to avoid perverse incentives and bad ecological outcomes. he farmers are right. At present, the incentives in the ETS are perverse, and they’re taking us in the wrong direction. It needs to be fixed before it’s too late. – Dame Anne Salmond

 Don’t jack up taxes during an economic crisis. Don’t add to the burden. Give us a break. What’s the better alternative? Blitz the low-quality spending and accelerate economic growth to generate the revenue to deal to the debt. – Mike Yardley

If sex isn’t real, there’s no same-sex attraction. If sex isn’t real, the lived reality of women globally is erased. I know and love trans people, but erasing the concept of sex removes the ability of many to meaningfully discuss their lives. It isn’t hate to speak the truth.” – J.K. Rowling

When transgender women and women are indistinguishable, women are unable to access the rights they would have if they were distinctive. . . Yet being tolerant of transgender women does not mean that one loses the ability to defend the rights of women who were born female. . . The main reason for this silence, as I see it, is the twisted logic of identity politics and its adherents. This ideology promotes a worldview that is wholly based on power structures and relationships. All of society is viewed through the prism of oppressors and oppressed. The ideology focuses on traits, such as race, gender or sexual orientation, some of which are deemed unalterable, others a matter of personal choice. Yet individual agency is generally devalued, to the benefit of collective identities that are increasingly ideologically fixed. An individual has less and less room to carve out room for her own views within each collective. A matrix has formed where those who have a higher number of marginalized traits rank higher on the victimhood ladder; their “truth” therefore counts more. – Ayaan Hirsi Ali

More funding does not address the issues of choice, accountability, value for money, and individual and community needs.Brooke van Velden

If your test is, it doesn’t matter whether someone is nice to the Labour Party, it matters if they are nice to the waiter, then Judith Collins is a very nice person. – Ben Thomas

Collins does not deal in ambiguity and nor is she likely to deliver it.Liam Hehir

You can’t be focussed on New Zealanders when you’re busy playing politics.One of the things I’ve learned over the years is you only ever learn from your mistakes, you don’t learn from your successes. The National Party is very focussed on not repeating any mistakes.” – Judith Collins

Elections are the means by which the Government has legitimacy and power; not minor inconveniences on the path to Covid-19 recovery.Henry Cooke

Collins, like Muldoon, speaks to a New Zealand that sees itself above class and race. She imagines a country where the language of political correctness has no place and anyone who works hard can get ahead. Don’t underestimate how many New Zealanders share that vision. – Josh Van Veen

Twitter is not on the masthead of The New York Times. But Twitter has become its ultimate editor. As the ethics and mores of that platform have become those of the paper, the paper itself has increasingly become a kind of performance space. Stories are chosen and told in a way to satisfy the narrowest of audiences, rather than to allow a curious public to read about the world and then draw their own conclusions. I was always taught that journalists were charged with writing the first rough draft of history. Now, history itself is one more ephemeral thing molded to fit the needs of a predetermined narrative. – Bari Weiss

To me, the point of a strong economy is to enable New Zealanders to do the most basic things in life well. A strong economy improves our chances of finding satisfying and well-paying work so that we can look after ourselves and our families – the most fundamental task each of us have. A society based on the assumption that its average citizen can’t or shouldn’t be expected to look after themselves and their families is doomed. – Paul Goldsmith

Here we had intimations at least that the prim, prissy, prudish neo-Puritanism, the Woke-Fascism unleashed on the nation by the Marxist Jacinda Ardern might have met its match. – Lindsay Perigo

She is creating a climate of terror designed to keep people cowed and bowed. It’s cynical, and I believe she was acting in the best interest of the country in the beginning, and now it’s become almost a mania. – Kerre McIvor

National’s approach to infrastructure is simple: Make decisions, get projects funded and commissioned, and then get them delivered, at least a couple of years before they are expected to be needed. That is the approach that transformed the economies of Asia from the 1960s.Judith Collins

It wasn’t that long ago when much of the global elite had conclusively decided that climate change was our world’s top priority. Then came a massive sideswiping by a global pandemic, of which we have only seen the first wave, along with an equally massive global recession. It serves as a timely reminder that an alarmism that cultivates one fear over others serves society poorly. – Bjorn Lomborg

I have no doubt that in the ranks of both main Parties there are numerous MPs with a strong Green personal agenda. If the Greens see a Parliamentary role then that should be to go into coalition with any majority Party so as to push their agenda. The indisputable fact is they’re frauds. – Sir Bob Jones 

A wealth tax is far more punitive than a capital gains tax, since rather than being raised on profits after an asset is sold, it must be found each year by people who may be asset rich but cash poor. It would become an unaffordable burden on many New Zealanders, especially those who are retired. – Dr Muriel Newman

Increasingly throwing money at dysfunctional families provides no assurance parents will suddenly become better budgeters, or not simply spend more on harmful behaviours. Gambling and substance abuse don’t just hurt the parent. They hurt the child directly (damage in the womb, physical abuse or neglect under the influence) not to mention indirectly through parental role-modelling that normalizes bad behaviours, especially violence, to their children.-  Lindsay Mitchell

My warning, however, would be that it’d be dangerous for National to become a conservatives’ party rather than a party with conservatives in it. It’s better to share power in a party that governs more often than not than it is to be the dominant force in a party that reliably gets 35% of the vote. . . The National Party is not an ideological movement. It is a political framework that allows members unified by their opposition to state socialism to pursue their various goals incrementally and co-operatively. Nobody ever gets everything they want but that’s a fact of life. – Liam Hehir

And that defines the New Zealand First dilemma. They must now campaign on the basis that they were part of a Government so they can’t credibly attack it, but they were not a big enough part to have a major influence. Richard Harman

We think it’s very important that we have everybody involved in it (planning). But I think it’s really important too is that consultation actually should be consultation, not the farce we have at the moment where everybody gets a say, and nobody gets the answer. –  Judith Collins

For me every day is now what they refer to as ‘Blursday’ because I really wouldn’t know. – Melina Schamroth

Properly funded end of life care is what needs to happen before, in my opinion, we push the nuclear button on the option of euthanasia. – Maggie Barry

It is about this time in the election cycle that the media starts crying out for policy. They want to know exactly what a party will do if elected. The problem for parties has always been that the amount of effort that goes into writing an election policy is not reflected in the amount of consideration given to it by voters. – Brigitte Morton

Laying hundreds off is no different to laying one off if you’re that one. And the reason this will play into the way we vote is because the halcyon days of the lock down are well past, and we have moved on with the inevitable, what next scenario. . .If The Warehouse, having taken the wage subsidy, can still lay off the numbers they are, and they’re far from the only ones, how many more join that queue come September 1st? And how many of those jobless quite rightly ask themselves whether teddy bears in windows, closed borders and a tanked economy with no real answer outside welfare is really worth voting for. – Mike Hosking

Hypocrisy is a normal but irritating aspect of human behaviour. We’re all hypocrites to some extent, but true hypocrites are almost admirable in their chutzpah because, unlike hypocrites who are caught doing what they try to hide, real hypocrites are outraged by vices which they themselves do in public. Their hypocrisy is so blatant that, after a while, nobody notices – it fades into the background like muzak in a shopping centre. – Roger Franklin

On behalf of environmentalists everywhere, I would like to formally apologize for the climate scare we created over the last 30 years. Climate change is happening. It’s just not the end of the world. It’s not even our most serious environmental problem.  – Michael Shellenberger

Peters can only win if voters see only his crafted image and ignore the reality of who he really is. But once the tricks become obvious – when the threadbare curtain concealing him is pulled back – the show man can no longer pass himself off as the Wizard of Oz. – Andrea Vance

By any measure it is the coming together of the narcissist and the plain wacky coated in self-delusion. – The Veteran

A strong economy improves our chances of finding satisfying and well-paying work so that we can look after ourselves and our families – the most fundamental task each of us have.
A society based on the assumption that its average citizen can’t or shouldn’t be expected to look after themselves and their families is doomed.  
Paul Goldsmith

Just think about it, when you step into a polling booth on September 19 you will be a bit like a practising Catholic going into a cathedral, dipping your fingers into the holy water font and blessing yourself.

After you’ve washed your hands with the sanitiser, you’ll bow over the ballot paper in the booth and be reminded how lucky you are to be alive.  – Barry Soper

Those on welfare don’t need sympathy. They need to be backed, encouraged, and supported to plan their future and see a path off welfare dependency. . . . I have always believed the answers to long-term dependency, child abuse, and neglect, and violence are in our communities. There is no programme that a politician or a bureaucrat can design that will solve these complex issues – Paula Bennett

Money is currently being thrown around but with no accountability. We have to be bold, brave. How can throwing millions and millions of dollars around and hoping some gets to those that need it most, through Government agencies and community organisations, and yet watching more people in despair be OK. – Paula Bennett

I’m far from perfect, and I know that, but my intent, my heart, my integrity has meant that I have slept well. This place is brutal. It will pick up the spade and bury you if you let it. It is relentless, but we sign up knowing that. So I went hard and full-on. For me to have not made a difference and not given it everything I’ve got would’ve been wasted time. So I end this chapter half the size but twice the woman thanks to this experience.  – Paula Bennett

Why is it through the toughest moments of our lives we learn the most, we feel the most, we have the greatest power to contribute and experience beauty? Through COVID, we saw this. Through fear, desperation, and hardship, heroes emerged. Teachers taught children from their living rooms while supporting their own families. Nurses, doctors, and checkout operators had the courage to turn up even when they were petrified. The lesson is: character and courage emerge out of trauma and hardship. The question for any generation of political leaders is: have we had the courage and character to step up and solve the hard economic and social issues of our time?  – Nikki Kaye

The National Party has been a strong force in New Zealand politics because of its values of freedom and personal responsibility—a place where social conservatives and social liberals can work for the common good. As a party, we are at our best when there is balance. That is when we are truly representative of this great nation. – Nikki Kaye

To the parliamentarians: I’ve always said I believe there are two types of parliamentarians in this place. Those that are in it for themselves and those that are in it for the country. Be the latter. Be brave and have courage. Don’t leave anything in the tank. – Nikki Kaye

In my three years as justice Minister, it very quickly became clear to me that the best thing we could do to reduce crime was to intervene many, many years before the offenders ever turn up in court. That was the basis of my absolute adoption of the importance of social investment as championed by Sir Bill English. Yes, it’s early intervention but it’s so much more and involves radical change to our delivery models if we’re going to make progress on the hard intergenerational issues.  – Amy Adams

Colleagues, the jobs we hold matter. They matter so much more than any one of us. We need good people to want to step into this arena, and we need them to do it for the best of reasons. I worry that increasingly the scorn and the vitriol that is heaped on politicians—often fairly—discourages those good people from stepping up. These jobs are tough. The life is brutal, and the public will never really see the hours, the stress, the impossibility of the perfection that is required, and the impact that life in the public eye has on our families. While you are here in your political role, it is your life. Friends, family, and our health get what’s left over, and often that’s not much. But this job deserves that level of devotion. – Amy Adams

If I have any advice for those who follow me, it would be pretty simple: do the right thing and let the politics take care of itself. Be brave, stand up on the divisive issues, and never lose sight of the difference you get to make in the time that we are here. – Amy Adams

I had the privilege of sharing a breakfast with Julia Gillard, the Australian Prime Minister at the time. Neither of us were into cold pastries or cold meat, so she ordered toast. I thought, “What are we going to put on this toast?” She said, “Don’t worry, Nathan. I’ve got it in hand.”, reached down—”Craft peanut butter. Vegemite.” We had a great discussion. The Anzac bond is incredibly strong. – Nathan Guy

It’s easy to sit on the side lines and criticise. It’s a lot more difficult to stand up and be counted. – Nathan Guy

While everyone is in recession it is a wee bit difficult to believe that we are going to be out of it. . . . We are heading into massive deficits. Households will tend to buckle down in the face of that and eventually government will have to tighten up as well. One of the things about this recession is the way it cuts across your usual categories of who is hit and who isn’t. Get ready for a long haul.- Sir Bill English

You should be concerned about systems that randomly allocate public resource to businesses under pressure. – Sir Bill English

 


Don’t have to be doomed

July 28, 2020

National finance spokesman Paul Goldsmith’s speech to IFINZ includes this gem:

To me, the point of a strong economy is to enable New Zealanders to do the most basic things in life well.

A strong economy improves our chances of finding satisfying and well-paying work so that we can look after ourselves and our families – the most fundamental task each of us have.

A society based on the assumption that its average citizen can’t or shouldn’t be expected to look after themselves and their families is doomed.  

This government’s all-rights-no-responsibility attitude to benefits has sent a strong message that people aren’t expected to look after themselves.

People looking back at the supposed good old days often cite the level of government support, including universal Family Benefit.

They conveniently overlook the fact that most families had two parents, generally one of those parents was in paid work and most people expected to look after themselves and their families.

The economic impact of Covid-19 has resulted in a significant number of job losses. Few would argue that they should not have the safety net of a benefit.

The only way to ensure that net doesn’t become a trap is a strong economy that gives businesses the confidence to invest and employ people.

The government has been quite clear about its willingness to borrow and spend. It hasn’t provided a plan for economic growth.

National does have a plan:

Government spending, however, cannot provide the full plan. The money has to come from somewhere – it either comes from current taxpayers, leaving them with less to make their own investments, or from future generations – leaving them with less to make their own investments.

The primary driver for growth and jobs needs to be the private sector. 

The recipe for this hasn’t changed.

It requires disciplined Government creating an environment where businesses feel confident to invest and a mix of employment-friendly policies that make it easier to take on new people.

The core elements are:

  • Low taxes
  • Regulatory restraint
  • Consistency
  • An openness to investment
  • And in the Covid recovery context we can add, a path to make progress on the border. . . 

We don’t have to be doomed.

The recipe to save us from that is simple, as is the expectation that those of us who can look after ourselves and our families should do so.


Reds’ policy path to poverty

June 29, 2020

The Reds have announced an $8 billion tax grab:

The Green Party have unveiled a sweeping new welfare policy that would guarantee a weekly income of at least $325, paid for by a wealth tax on millionaires and two new income tax brackets on high-earners. . . 

The $325 after-tax payment would be paid to every adult not in fulltime paid work – including students, part-time workers, and the unemployed. The student allowance and Jobseekers benefit would be replaced. . . 

It would be topped up by $110 for sole parents, and the current best start payment would be expanded from $60 per child to $100 per child, and made universal for children up to three instead of two.

This guaranteed minimum income plan would cost $7.9b a year – roughly half what is spent on NZ Super, but almost twice what is spent on current working age benefits.

Paying for all this would be a wealth tax of one per cent on net wealth of over $1 million and two per cent for assets over $2 million. The party expects this would hit only the wealthiest 6 per cent of Kiwis.

This would take the form of an annual payment and would only apply to those who owned those assets outright – not someone who still had a mortgage on their million-dollar home, for example.

That looks like everyone could avoid the tax by never paying off their mortgage, but the party wouldn’t be that stupid, would it?

Any party that thinks up this sort of economic vandalism could be.

The Taxpayers’ Union is slamming the Green Party’s proposed wealth tax as bureaucratic economic vandalism that would hammer job creators.

Taxpayers’ Union spokesperson Jordan Williams says, “The proposed wealth tax would mean the return of the dreaded compulsory asset valuations that made a capital gains tax so unpopular. A bureaucratic valuation scheme would incentivise people to hide their wealth, or shift it offshore. It would be a dream for tax accountants but hell for small business owners.”

“The policy also appears not to differentiate between asset types.  It would tax entrepreneurs creating jobs the same as someone sitting on an art collection. Ultimately it would cost jobs at the very time New Zealanders need entrepreneurs to create them.”

“Wealthy iwi groups sitting on often unproductive land would also be smashed under this scheme.  It’s bumper sticker type policy which is poorly thought through.”

“Any party that says you should raise taxes in the middle of a recession is divorced from reality. It is scary that all the work James Shaw has done to try and make the Greens more economically credible appears to be for nothing.”

Commenting specifically on the Green Party’s income support policy, Mr Williams says, “Under the Greens’ policy, a family of five with both parents on the dole would receive $1180 a week in taxpayer funds, assuming one of the kids is younger than three. That goes beyond generosity: it is using taxpayer funds to encourage long-term unemployment. Combined with the policies to tax job creators, this package would take a sledgehammer to New Zealand’s productivity.”

There’s no good time to increase taxes and a recession is an even worse time.

Recovery from the economic carnage wrought by the Covid-19 response requires investment, expansion and increased employment opportunities.

This policy will be a handbrake on all of those and an accelerator for benefit dependency which is a pathway to increased poverty.

This policy is typical of a party that’s more red than green and doesn’t understand that a greener country has to be well and truly in the black and you don’t there by taxing more.

New Zealanders gained a glimpse today of what a Labour Greens government would look like, and it involves a lot more taxes, National’s Finance spokesperson, Paul Goldsmith, said today. . . 

At a time when we need our successful small business people to invest and create more jobs, the Greens want to tax them more.

Rather than celebrating Kiwis doing well, the Greens seem to want to punish them.

The Greens never have the influence to get their way entirely, but they would push a Labour Greens coalition in the direction of higher taxes.

Labour have so far refused to rule out taxing people more if they win the election.

The very real fear many New Zealanders have is that this current government, which has $20 billion available for election spending, will spend whatever it takes to try to keep its poll numbers up until the 19 September election.

Then on the 20th, if they win, the smiles will drop and New Zealanders will be presented with the bill – higher taxes.

National has committed to no new taxes for Kiwis in our first term.

While the economy is going down, the Greens want to tax us more, and Labour haven’t ruled out doing the same.

That’s another very good reason to vote for a National/Act government that will focus on policies which foster the economic growth necessary to provide a pathway for progress.


NZ hit harder than most

June 12, 2020

The government boasts of going hard against Covid-19, will it also boast that as a result of that the economy has been hit harder than most?

New figures show New Zealand is likely to experience a bigger economic shock from Covid-19 than Australia and other OECD countries despite being in a better position than most to manage the crisis, National’s Finance Spokesperson Paul Goldsmith says.

“The OECD estimates that New Zealand’s GDP will fall by 8.9 per cent this year, worse than the OECD average of 7.5 per cent.

“New Zealand had huge advantages in terms of isolation, distance and small population, yet our extremely heavy lockdown has resulted in a worse economic outcome than most.

The government’s insistence on allowing only those businesses it deemed essential which was both arbitrary and inconsistent, means we’re paying a far higher cost than it it had allowed those that could operate safely to do so.

“Finance Minister Grant Robertson has spent the last 18 months telling us that New Zealand is doing so much better relative to the OECD, yet we’re now lagging behind at the first test.

“Two thirds of OECD countries expected to fare better economically than New Zealand. Australia and South Korea are only expected to contract by 5 per cent and 1.2 per cent this year respectively.

“Australia, for example, managed to keep industries like construction operating throughout the lockdown and as a result they will have a smaller economic impact and lower unemployment.

“New Zealand’s unemployment rate is expected to rise by 3.8 per compared to just 2.2 per cent in Australia. This highlights that while New Zealand has managed the health response to Covid-19 successfully, the economic response has been poor.

“The Government urgently needs to put forward comprehensive economic plan to reduce the damage and remove barriers to private sector growth, open the borders safely and start work on high quality infrastructure projects.

“So far the Government’s only plan has been massive amounts of debt-fuelled spending, with no plan for economic growth or how to keep debt manageable.”

This government appears to think the quantity of its spend is a better measure of success than the quality.

What it’s doing is, Eric Crampton says, like borrowing money for a swimming pool after a house fire:

 . . .After suffering a housefire, an underinsured household would likely need to take on debt to deal with the problem – and that could be fine. But if it then took the opportunity to add a swimming pool to the property, while pushing the mortgage amount to the upper limit, one might wonder about the household’s prudence.

Similarly, the elected Government has been adding metaphorical swimming pools to its shopping list by extending the 2020 Budget beyond what was necessary to deal with the Covid crisis. This raises sharp questions about the Government’s commitment both to fiscal prudence and the Public Finance Act. . .

Borrowing in response to Covid-19 was necessary, but the amount of borrowing and what it’s being used for is far from prudent.

When the GFC struck the then National-led government committed to maintaining spending to protect the vulnerable from the sharp edge of the recession while requiring government departments to cut costs.

The government has talked about cutting red tape but done about it yet and hasn’t even mentioned requiring the public service to take a scalpel to its fat.

It’s pouring money into metaphorical swimming pools with no plan for rebuilding the house or repaying the mortgage.

 


If the cap fits

June 10, 2020

Paul Goldsmith told Jacinda Ardern to stick to her knitting and provoked an uproar on social media.

If there’s any cause for outrage it should be at the ignorance of English idioms.

Stick to your knitting  means:

to continue to do something that you are experienced at and not try to do something which you know very little about

‘It failed because we did not understand the plumbing business, and it taught us a lesson about sticking to our knitting!’

It’s not sexist, it’s just a turn of phrase and the cap fits, he hit the nail on the head with the right tool for the job and anyone who came out of the woodwork to drill down for a meaning that’s not there has the wrong end of the stick, or an axe to grind or maybe just isn’t the sharpest knife in the drawer.


National’s refreshed responsibilities

May 25, 2020

Todd Muller has announced the refreshed responsibilities for his MPs:

He has taken Small Business and National Security.

His deputy Nikki Kaye has Education and Sports and Recreation.

Amy Adams, who had announced her retirement, is staying on with responsibility for Covid-19 Recovery.

Judith Collins:  Economic Development, Regional Development, is Shadow Attorney-General and takes on Pike River Re-entry.

Paul Goldsmith keeps Finance and has responsibility for the Earthquake Commission.

Gerry Brownlee: Foreign Affairs, Disarmament; GCSB; NZSIS and Shadow Leader of House.

Michael Woodhouse keeps Health, is  Deputy Shadow Leader of the House and Associate Finance

Louise Upston: Social Development and Social Investment.

Mark Mitchell: Justice and Defence

Scott Simpson:  Environment, Climate Change and Planning (RMA reform)

Todd McCLay:Trade and Tourism

Chris Bishop has Infrastructure and Transport

Paula Bennett: Drug Reform and Women

Nicola Willis: Housing and Urban Development and Early Childhood Education

Jacqui Dean: Conservation

David Bennett: Agriculture

Shane Reti: Tertiary Skills and Employment,  Treaty of Waitangi Negotiations and Associate Health

Melissa Lee: Broadcasting, Communications and Digital Media and Data and Cybersecurity

Andrew Bayly:  Revenue, Commerce, State Owned Enterprises and Associate Finance

Alfred Ngaro: Pacific Peoples, Community and Voluntary, and Children and Disability Issues

Barbara Kuriger: Senior Whip, Food Safety, Rural Communities

Jonathan Young:

Nick Smith:

Kanwaljit Singh Bakshi:

Matt Doocey:

Jian Yang:

Stuart Smith:

Simon O’Connor:

Lawrence Yule: Local Government

Denise Lee:  Local Government (Auckland)

Anne Tolley: Deputy Speaker

Parmjeet Parmar:  Research, Science and Innovation

Brett Hudson:  Police, Government Digital Services

Stuart Smith: Immigration, Viticulture

Simeon Brown: Corrections, Youth, Associate Education

Ian McKelvie: Racing, Fisheries

Jo Hayes:  Whānau Ora, Māori Development

Andrew Falloon: Biosecurity, Associate Agriculture, Associate Transport

Harete Hipango: Crown Māori Relations, Māori Tourism

Matt King: Regional Development (North Island), Associate Transport

Chris Penk: Courts, Veterans

Hamish Walker Land Information, Forestry, Associate Tourism

Erica Stanford: Internal Affairs, Associate Environment, Associate Conservation

Tim van de Molen: Third Whip, Building and Construction

Maureen Pugh: Consumer Affairs, Regional Development (South Island), West Coast Issues

Dan Bidois: Workplace Relations and Safety

Agnes Loheni:  Associate Small Business, Associate Pacific Peoples

Paulo Garcia: Associate Justice

At the time of the announcement SImon Bridges was considering his future, he nas subsequently announced he will stay on in parliament and contest the Tauranga seat again.


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.


5 point plan to get out of hole

May 11, 2020

National Finance spokesperson Paul Goldsmith asks: how do we avoid making the economic disaster worse than it needs to be? And how can we get back on track?

. . .I argue we are making it worse than it needs to be and an ill-directed, big spending Budget this week would compound the damage. And I’ll outline National’s five-point plan to get us back on track. . . 

Big spending in the Budget should be focused on saving jobs – such as cash to small businesses most effected – and critical expenses related to health and education.

We’d do well to avoid nice-to-have pet projects, such as the Greens’ wider footpaths, or locking in new or more generous entitlements at this time.

We won’t avoid a $40 billion or $50b dollar hole; but we must not turn it into an $80b, $90b or $100b disaster. All the debt will need to be repaid.

Interest rates are low but that is no reason to borrow more than is absolutely necessary; nor to borrow for nice-to-haves rather than needs.

And, who can best provide the economic management to get us back on track faster?

The past is a guide.

The previous National Government borrowed $50b to get us through the Global Financial Crisis and Canterbury earthquakes. In short order we got on top of it, got back to surplus with a strongly growing, confident country and economy.

National inherited a projected decade of deficits and managed to turn that round while protecting the vulnerable front he worst effects of the earthquakes and GFC.

This Government’s economic management in the two years before Covid struck is more mixed. Yes, unemployment and debt stayed low. But in two years they burned through massive surpluses to project a deficit this year, and growth had stalled to 1.8 per cent in calendar year 2019. Many announcements were made – KiwiBuild, Light Rail etc; little was delivered.

A National Budget this week would include a five-point plan back to progress.

First, lighten the lockdown. Get Kiwis back to work unless there’s an overwhelming reason not to, rather than seeking perfection before slowly restoring freedoms.

Each day a business and its staff aren’t working is a day closer to failure.

Second, save jobs by getting cash to small businesses most in need. Our GST refund proposal to businesses that had lost more than 50 per cent of revenue for two months would help and help strong businesses to drive growth. Our Business Investment Accelerator proposals would incentivise new investment.

Third, we need commonsense and pragmatism around the rules for “2 or 1m world'”. It’s one thing to allow bars and cafes to reopen but if the rules mean that you’d just lose money, you’re no further ahead.

Fourth, unlocking private sector investment is the key to growth and innovation.

We won’t rely on Wellington committees to reinvent the economy. We’ll trust Kiwis to work out how to get back on their feet. We’ll keep taxes low, we won’t regulate firms to death or keep changing the rules, and we’ll back them to succeed.

Fifth, we’ll use the Government’s balance sheet to invest in quality infrastructure – like National did with the Ultra-Fast Broadband – in upgrading our skills, turbo-charging the innovation sector and in improving the quality of public services, such as health.

We need a Budget that backs New Zealanders.

A Budget that backs New Zealanders vs one that’s too heavy on regulation and lets any government, let alone the current one, pick winners?

No contest.


Quotes of the month

May 1, 2020

The most galling aspect of the current lock down is that we could’ve prevented it. If we had introduced strict quarantine at the border and made provision for widespread testing much earlier, like South Korea and others, we probably wouldn’t be in the situation we now find ourselves. We all have to pay a high price to bring this disease under control and that cost is now as much in our liberty as our wallets. I don’t think there is anything to be gained at this time in castigating the Government for their earlier inaction, but let’s not give them undue credit either. Hopefully there will be a reckoning after all this is over. – Kiwiwit

One should never underestimate the power of amnesia in human affairs. Even catastrophes on a vast scale are often soon forgotten, at least by those who were not directly affected by them. The young in Eastern Europe, it is said, know nothing of the ravages of communism, though they lasted decades and still exert an influence, and quite a lot think that socialism might be a good thing to try, as if it had never been tried before. Moreover, no memory exerts a salutary effect by itself unaided by thought and reflection: memory (even where accurate) has to be interpreted, and where there is interpretation there is the possibility of error and disagreement. – Theodore Dalrymple

With a full belly, everyone knows better than farmers how to manage land, and how to care for the countryside. – James Rebanks

This is our wake-up call to respect farming once more — not uncritically: we have an absolute right to want more nature on farmland, high welfare standards for farm animals, and safe and healthy food. –James Rebanks

A couple of weeks ago, I wrote a column in the Listener in which I was too dismissive of the health risks of the Covid-19 threat. The reaction was furious and often vituperative – which is another thing we have all become accustomed to these days. My column that would normally be spinning off the printing press right now, said, “I got it wrong”.

I did get it wrong, but our job is to scrutinise, and I remain more afraid of the economic fallout of New Zealand’s response to Covid-19 than I am of the virus itself. – Joanne Black

I don’t jeer at smokers, though. Nicotine is a drug, you get hooked on it, and it takes a lot of effort to stop – I had someone doing it with me and we could console and help each other when it got too hard. It was also a time when I didn’t have any money worries, but really, in the end I kept it up because I was determined I wasn’t going through withdrawal symptoms ever again. I hated that I couldn’t just stop without enduring what seemed like punishment instead of the congratulations I deserved. Renée

That cast iron aversion to enforcing personal responsibility is baked in to our law in numerous areas. . . Shame (whakaama) is the mechanism at the cultural heart of nearly all successful systems for control of anti-social behaviour.  – Stephen Franks

It is as if the government is afraid of confronting and dealing with real hard choices –  and being honest on what they value, what they don’t –  and just prefers now to deal in simplistic rhetorical absolutes, when not much is very absolute at all.Michael Reddell

 Bauer’s exit is further evidence that foreign control of New Zealand media is generally ruinous. Australian ownership did grave – some would say irreparable – damage to both our major print media companies and it seems the Germans are no better. Overseas owners have no emotional stake in the country and no long-term commitment to our wellbeing. They don’t understand our culture and ethos and are largely indifferent to New Zealand affairs. They are interested in us only for as long as they can make a profit, and when that ceases, they cut and run. – Karl du Fresne

Many politicians and voters don’t seem to appreciate the reality that every dollar spent by the government needs to come from taxpayers, who need to earn that dollar in order for the government to take and spend it. Even when the government borrows money to fund its splurge, it is just postponing the bill to future taxpayers. Kiwiwit

We will decide to end social isolation and take to the cafes (those that have survived) with gusto. It will be our duty to support what is left of the economy and keep people employed. We will rush to businesses that the COVID-19 Czars deemed non-essential and hope we have the cash to spend and hope they survived. – Judith Collins

Consistency, at least in matters of public policy, is no doubt the hobgoblin of little minds, and not every argument has to be followed to its logical conclusion. Philosophical abstractions cannot be the sole guide to our political actions, though neither can they be entirely disregarded. The man with no principles is a scoundrel; the man with only principles is a fanatic.Theodore Dalrymple

The feminization of society isn’t  the overlay of feminist values. No. It’s the overlay of natural feminine tendencies. Don’t tell me they don’t exist. Most females become mothers. They are biologically designed to nurture. To bond through touch and soft murmurs. To provide their bodies to their babies (and lovers) as cushions and warmth. They placate, they adjudicate. They practice kindness with reasonable ease because that is at the core of the jigsaw puzzle piece they are.

Mine is a traditional but organic view of what a women is. She is not less than a man. And she is not more. – Lindsay Mitchell

When the New Zealand public looks back on the response to Covid-19 they won’t be judging success by whether we went ‘faster’ or ‘harder’ than other governments. Instead, we will want to know whether the Government’s response was balanced and proportionate.

Specifically, was the response proportionate to the risks posed to the citizenry from the virus? Were the short-term and long-term consequences to health and wellbeing appropriately balanced? Were the impacts on younger members of society who bear the brunt of the financial consequences appropriately weighed against the interests of the elderly members who carry the highest health risks? And were the impacts on low-paid wage earners and disadvantaged communities who will fall deeper into poverty appropriately considered and compensated?

Certainly, extending the lockdown beyond four weeks and prolonging border closures would be the right thing to do only if it saves more lives than it costs. Grant Guilford

 I get home and just try to catch up on all the news I missed while I was writing it. As with March 15, I find filtering the horrible events through the filter of a news story that I am writing the best way to numb myself to their power. If you have to sit back and think about the world shutting all its borders for years to come, of a recession deeper than any we’ve felt in a century, of needless deaths if we don’t resist all the things that make us feel alive, then it all gets a bit much. When you get to write it out as a news story its just data to feed into a well-worn formula, a coping mechanism that also happens to be your job. – Henry Cooke

 The best battery of all is a lake. Water management allows more investment in plant based proteins, better management of waterways, and more green industry. If we want this renewable future then as a country we need to have a mature discussion about water storage which must be, and will be, a net positive for the environment. – Rod Drury

One of the lessons from the animal world, is that every disease has its unique characteristics that determine the specific strategy. But every time, one way or another, it requires a track and trace that is carried out with speed and rigour. – Keith Woodford

I write my way into a story, a poem, a play and I write my way out. One thing I know for sure – there’ll be sticking points, hurdles. Writing that flows like it was effortless and easy to write comes only after hard work. Renée

There must be many other people in these strange times who find that having the time, no longer trying to stuff too many duties and activities into their day, they can now discover the world of small things around them, and find it utterly loveable. Birds singing, leaves unfolding, spiders spinning their miraculous webs – all these things can be food for the soul and can remind us of the goodness of life even in ‘these interesting times’, in the words of the Chinese proverb. –  Valerie Davies

What other industry is allowed to steal the product of another industry’s endeavour and pay nothing for it, while at the same time steal their livelihood through advertising? Because that’s what social media does. They pay absolutely nothing for the product that is the lifeblood of their operation and that is the news content made and paid for by news media organisations.

“I know of no other industry where you can steal something and not only get paid for it through advertising but get the government’s backing for it as well. – Gavin Ellis

So let’s use every nuanced tool we have available to us. Let’s protect the vulnerable, require businesses to prove they can operate safely before reopening, seriously consider regional alert levels, and continue with our physical distancing and virus hygiene protocols. But let’s also move quickly to staunch the bleeding of our troubled economy. Otherwise, we may need to start including suicide statistics, domestic violence call-outs and bankruptcy numbers in our daily briefings. – Lizzie Marvelly

My mum has probably never shown up in the GDP. Men can be pretty shit with a tape measure when it comes to women. No offence. But she could help you with that. Run it down your arm. Around the cuff. Calculate costs in an instant. Show you where you went wrong. Pins askew in her mouth. Glen Colquhoun

We’ve been bemoaning the fact that no one wants to listen to the good stories for years. Who would have thought it would take a global pandemic to give us a window to be able to have that voice again? It seems bad taste to be observing silver linings and opportunities whilst so many are suffering however, an opportunity to connect and support our country can only be a positive for everyone in my books. The primary sector’s social licence and our economy depends on it.  – Penny Clark-Hall

The people that we are talking about now are not the sports stars, not the celebrities, they are the people at the front line -the health workers – the Jenny’s from Invercargill, they are the special people. – Sean Fitzpatrick

One of the problems with Government money is that it always feels like other people’s money, doesn’t it? At the end of the day it’s ours or at least future generations’, who will have to pay it back in some way. We ought to be just as cautious with that money as we would be in our own businesses.

If you give cheap or free Government money to enable businesses to continue, in doing so you may be destroying the very thing that is valuable in business, which is the ability to evaluate risks and to take risk where the benefits that flow are greater than the costs. – Rob Campbell

Not all deaths have the same social cost. The death of a 90 year old can be sad, but the death of a child or young adult is almost always a tragedy. Burden of disease estimates often adjust for the number of life years lost and this adjustment should be made in assessments of the benefits of intervention options.Ian Harrison

Is there any rail network in a sparsely populated narrow and skinny country like ours that has ever paid its way? Perhaps the Greens can enlighten us if there is. The Greens will probably say that there is a financial cost to an economy where climate change is front and centre, but we already know what a carbon-free economy in the year 2020 is like – we just have to reflect on the economic destruction that has taken place during the Covid-19 lockdown.

Rail is not an asset – it’s a liability. And it’s not a stimulus package, any more than spending money on people digging holes in the ground is. Stimulus money should be spent on work that will facilitate commerce and enhance the economy in the long-term, not destroy it, which is what the Greens are proposing. – Frank Newman

If the government wants to build on its success so far and continue running an effective public health campaign against Covid-19 at minimal cost to the economy, it needs a robust decision-making framework that will allow rapid response to changing circumstances and reflect a broad range of health, social and economic considerations. – Sarah Hogan

The more the government can show it is learning and carefully considering the complex sectoral, health, social and economic trade-offs at each alert level – most likely by comparison with a ‘no intervention’ alternative – the more likely it is that decisions will prove durable.

Without more structure, rigour and intense communication effort, the gains won so far against the virus risk unravelling if public scepticism and weariness combine to thwart the battle in the months ahead. – Pattrick Smellie

We shouldn’t take our culture and heritage for granted because it has helped us to strengthen our resolve and courage in such an uncertain time.

I have found that looking out for each other and valuing our culture makes us stronger and although it has been tough we will come out stronger as a community. – Hana Halalele

It does stick in my craw that even the most self-reliant of us have all become dependent on the state. I can’t help thinking that this is seen by those in power as a useful by-product of their Covid-19 response. The metaphysical basis of almost all political belief today is social, cultural and economic collectivism. We are all just part of one big, global village, and, as in any village, every person should be concerned with everyone else’s business. Self-reliance is seen as selfishness and is not to be tolerated, and if you think you know what is best for your own life, you simply don’t know what is good for you. – Kiwiwit

As leader of the nation, Ardern is unparalleled. But her performance as leader of the government is less flash. – Matthew Hooton

Amid the coronavirus implosion I’m guessing productivity failures won’t even get much attention this election.  But they should, and any serious recovery plan should go hand in hand with a strategy that has some credible chance of finally beginning to reverse decades of failure.  Turning inwards and looking more heavily to the state is most unlikely to be such an answer. – Michael Reddell

Any one country trying them will quickly find that tariffs meant to protect domestic steel producers, for example, ruin domestic industries that use steel. And when everyone turns protectionist, the complex international supply networks that deliver us everything from cars to phones seize up. –Eric Crampton

Given that a supply chain these days can take in the entire globe, how is the official to know whose making “essential” parts and who’s not? How, even, are manufacturer’s to know, if the screws they’re making are just the ones that are needed to hold together this machine that when running properly makes thatmachine, and that machine is the one that makes ventilators, say. – Peter Cresswell

Here’s what politicians don’t understand: The economy isn’t a lightswitch that can be turned off quickly, then turned back on without consequence. Economic freedom isn’t just an integral part of the American dream, it’s a prerequisite for prosperity.

Most importantly right now? Everyone’s livelihood is essential to them.

Economic activity is, at its heart, a human activity. To disregard some as non-essential is a mistake with heavy consequences. – Amanda Snell

I find myself wondering if people can identify with what I have written about how it feels to be diagnosed with cancer and whether they have found themselves glimpsing the world I live in. In some strange way it could be possible that people are experiencing to one degree or another, what it feels like to have the rug abruptly pulled from under their feet and to wonder if they are going to die. Right now, people are facing one of the greatest challenges in life that they could ever imagine, just as I and many like me faced when we were given our cancer diagnosis. No words can ever describe what it’s like living with cancer but maybe an experience such as what we’re currently living through might provide a glimpse. Like with a cancer diagnosis, this pandemic will change lives and for many life will never return to what they have always known. It will change the way they view their lives and the world, perhaps even their priorities so post-pandemic life becomes a new normal for them. That phrase is one that everyone who has experienced cancer will have heard at some point because life post-cancer is never the same again, it actually does become a “new normal”.  – Diane Evans-Wood

You know, the theatre has kept going through the plague in the 1600s and it has a 2000 year-old history. Performers are part of that whakapapa and there will always be a need for human beings to connect…and, of course, that is what the arts does for us. – Jennifer Ward-Lealand

We need to balance the ability to be financially sustainable while being environmentally sustainable, not be expected to reach lofty targets set when the world was burning more fossil fuels and living beyond its means before the pandemic.

For NZ those targets need to be readdressed as soon as possible. We must lift the lid on the pressure cooker the primary industries have been under as we look to the future. – Craig Wiggins

One thing I do know is that what has become important now has always been important – food, shelter and good company – Craig Wiggins

Everyone who has a job in this economy is an essential worker. Every single job that is being done in our economy with these severe restrictions that are taking place is essential. . . People stacking shelves, that is essential. People earning money in their family when another member of their family may have lost their job and can no longer earn, that’s an essential job. Jobs are essential – Scott Morrison

Merit of action should be based on decisions made (or not made), the application of reason and science, and of course, the final results. Merit and accolade should never be given simply because of person’s age, gender, belief system, or political leanings. Sadly, we are seeing a commentariat very willing to continue its pursuit of identity politics where the ‘who’ is more important than the ‘what’ and ‘how’.  Simon O’Connor

Whether a farmer, café owner or self-employed plumber, the driving force behind most small businesses is the dignity of self-employment. For some people (me for starters) that’s a huge factor overwhelming any other consideration. – Sir Bob Jones

And yet, if there are any two countries that could pull off a clear if hermetically sealed victory — offering a model of recovery that elevates competence over ego and restores some confidence in democratic government — it may be these two Pacific neighbors with their sparsely populated islands, history of pragmatism and underdogs’ craving for recognition.Damien Cave

You are going to be part of a team facing tradeoffs.  Will we cancel the upgrading of the Tauranga to Katikati highway where there are too many road deaths so we can plant trees on good farm land to suck up CO2?  Will we delay buying equipment for an isolation strategy in a probable flu epidemic or build a cycleway on the Auckland harbour bridge?  Should we introduce tough new water quality measures while farmers are struggling and suiciding?  Will Pharmac get more money for new drugs to save five to ten lives or will we build a tramline to the airport?  Can we afford to close maternity hospitals in Southland risking mothers and babies lives so we can shift the Port of Auckland to Whangarei? – Owen Jennings

I have been alarmed to see that disdain for the mainstream media has spread to the mainstream media itself. Recently I was contacted by people who should know better, asking me to send them a copy of my column because they refused to fork out the readies to breach this paper’s paywall. The total required at the time was $1 a week. This much they would not sacrifice because of their aversion to one columnist. They would forgo the fine work produced by many excellent writers who did not have that columnist’s attention-grabbing profile and gift for alienating readers. . . .

Now more than ever, mainstream media which, for all its flaws, continues to uphold basic journalistic standards has a vital role to play in society.

As I explained at the time, refusing to share my column with my stingy friends, if you think life without magazines is bad, wait until you live in a world without newspapers.Paul Little

We must never again allow a situation where the law allows a young woman with much charm and little real world experience, to legally take such dictatorial powers.

The current legislation needs to be reconsidered in Parliament. While it’s conceivable such situations could arise in the future requiring such a heavy-handed approach, the supporting legislation should require say a 75% Parliamentary vote. Sir Bob Jones

There are two clear dangers for New Zealand.

The first is the virus – or more specifically, the prime minister’s strategy of eliminating the virus; how many lockdowns can we endure?

And the second is our prime minister, who fundamentally believes in state control, and is being given a free rein to embed her agenda deep into the heart of our democracy.  – Muriel Newman

Instead of adding to the deficit by throwing expensive shovels at projects, and thereby taking the public sector’s share of total spending up even further than its current, very high, level of 40 per cent of GDP, let’s hold the line on spending and cut tax revenues for a while, and let the households and the business sector sort out the shovelling for themselves. – Tim Hazeldine

For a Government, public confidence is the most precious of commodities. In ordinary times, it allows businesspeople to take more risks, invest in plant and technology, open new markets, start new ventures, employ more staff. It allows householders to decide yes, we will buy the new fridge, take a bigger holiday, eat out more often. Confidence turns the wheels of the economy. Simon Wilson

We are right to take a strong stand to value life and be against premature death. What we should now ask of our leaders is that they be consistent and place equal value on the risks, both physical and mental, for all people. One of the important roles of teachers in a crisis situation is to hear students’ questions and concerns with an open mind and allow them to work their way through things. Suppressing this process can only lead to conformity for the sake of it and a deep sense of helplessness. – Alwyn Poole

We’ve flattened the curve; we don’t need to flatten our country. Indeed, we now need another curve, an upward growth curve – growth, jobs, and a track back to normality.Simon Bridges

 The instinct of the Labour/ New Zealand First government will be to assume that a committee of Wellington politicians and officials, with a couple of business folk, a union rep and two iwi leaders should steer our path into the new economy. The likes of Shane Jones and Phil Twyford will implement it. . .

But the core engine of growth will always be private sector investment – men, women and their businesses taking on new ventures, rebuilding their businesses, expanding, hiring people – taking mad risks. No committee would have thought Kiwis should get into rockets, or into online accounting systems.

The recipe hasn’t changed. Successful economies make it easy for the investment to flow to more productive activities – they welcome investment, they don’t over regulate or over tax, they provide clear and consistent rules, properly enforced, and don’t go changing them all the time. – Paul Goldsmith

This is not a time to panic or point fingers. It is time for us to reveal our true character. Sir Don McKinnon

We need to speak very plainly about this: these three career politicians have absolutely no idea what sectors of the economy are doomed, which have a future, and whether any particular commercial proposal makes sense. Add Economic Development Phil Twyford to the mix, and it risks the appearance of a circus run by clowns. . .

Free-market capitalism works not because it is individualistic — although it is — but because it collectivises everyone’s best guesses and analysis. In contrast, collectivist economic systems reply on the brilliance of individuals or, worse, committees. Again, we should speak plainly: central planners are not just often wrong, but invariably wrong, just like most of us. – Matthew Hooton 

If you have one tenth the number of intensive care beds per capita that Germany does, if you don’t have contact tracing in place, then if you don’t have that level of resourcing available, you’ve got to focus very hard on the keep-it-out strategy. The fact that we’ve had to work so hard to stamp it out can only mean we’ve failed to keep it out. – Des Gorman


Agility and speed needed for recovery

April 13, 2020

National Finance spokesman Paul Goldsmith says agility and speed are needed as we rebuild the economy:

. . . Every day that the talents and energies of Kiwis are not being put to use, every day that most hospital beds are empty and normal health and education activities are not carried out, we are paying a heavy price. 

The critical thing  this coming week is for the Government to clarify what it sees are the steps to progressively reopen the economy after the lockdown.   Is it all online commerce first with home deliveries, all elements of the supply chain feeding essential services, construction and general medical work?  Then what’s next? Everything that doesn’t involve large crowds, while retaining restrictions on borders?

These steps need to be announced as soon as possible.

We need absolute clarity about what’s in and what’s out at each step, and how social distancing in the workplace will work in practice.  Confusion and gross unfairness between businesses may have been forgiven as we raced headlong into lockdown at the start of the crisis, but it won’t be forgiven as we come out. 

If clarity around what is safe rather than arbitrary, confusing and often conflicting rules on what is essential was the guiding principle there would be less confusion and unfairness.

If the level four, three and two system that we’ve created is unnecessarily clunky and rigid, we should abandon or adapt it, so that new segments of everyday life can be opened up as quickly as possible without having to go through a great bureaucratic chain of command to shift from level three to two. 

Throughout, businesses would benefit from as much signalling of the changes as possible to get ready. . .

Businesses need to plan for reopening. The more knowledge they have and the sooner they have it the better able they’ll be to open sooner and safely.

Of course there is a risk that if we open up too soon we may see infection rates go up.  The response to that is extensive testing, tracing and isolation.   But as we can all see, the alternative of staying in lockdown longer than necessary is far from risk free. . .

The economic and social costs are already high and rising. There are also health costs in the lockdown through diagnosis and treatment delayed.

In the medium term, we need pro-growth policies to encourage investment.   This is not the time for the state to take over the economy or for a committee of Wellington officials to decide where investment should flow.

No virus can change the formula for success.  Most growth, jobs and opportunities will come from people and their businesses taking a risk to invest in rebuilding and expanding their enterprises, hiring new people, starting new ventures, buying new machines. 

They’re more likely to make those investments if they feel confident in the direction taken by the Government – that it won’t regulate them to death, over-tax them or keep changing the rules. 

The Government should hold off on the countless new costs and rules it was planning to impose on the productive sector in the next year or so, so that they can catch their breath and get started.

The government has a big role in the recovery, but it is not in doing things businesses are better doing, nor can it be in getting in the way of businesses doing them.

Meantime, it’s a good time to invest quality infrastructure, the innovation and R&D sector, and in the skills needed for the modern workplace.

There’s no reason our country can’t return to prosperity soon if we continue to apply agility and urgency to the great task of rebuilding our economy.

Governments don’t usually do agility and speed but governments don’t usually lockdown their countries either.

It isn’t going to be easy to get out of lockdown, it will be harder still to get over the consequences.

If the government isn’t able to be agile and speedy, it must do all it can to allow businesses to be.


It’s raining

March 23, 2020

The government’s decision to put public health before that of businesses can be justified but National’s Finance spokesman Paul Goldsmith says it’s time to open the public purse:

We are facing the sharpest and deepest recession in living memory.

To avoid an accelerating downward spiral, with the mass failure of previously healthy firms, large scale job losses, mortgage foreclosures and serious hardship, a massive economic package is required now. Bring out the bazooka.

The primary economic goal must be to reduce the number of business collapses, and thereby to sustain jobs and incomes.

We’d support an economic response that is bigger and faster than what has been delivered so far. . . 

Businesses which have received help are grateful but a lot more needs to be done to protect jobs.

The primary source of urgent assistance is the $5.1b wage subsidy scheme. This we support. But the $150,000 cap for businesses, which translates to 21 full time staff, means that around half or more of New Zealand’s workforce won’t be covered the scheme.

While it’s true that most businesses in New Zealand are small, the majority of workers currently work for the 5000 businesses that employ more than 50 people.

Just think of a large scale tourist bus operator with hundreds of employees. This business’s revenues will have collapsed. A subsidy capped at 21 employees will be of little assistance.

Our strong view is that the government’s immediate package of economic support – $6b at best – is far too light. 

The $150,000 cap needs to be much higher, so that workers are covered no matter what the size of the business.

Urgent further consideration also needs to be given to the shape of the scheme. The Government’s scheme pays the money with no guarantee people will be kept in employment – only ‘best endeavours’ are required. The British scheme, recently announced, is a more generous payment for employees kept on the payroll but sent home.

The costs of the British scheme will be eye-watering, but some variation of that will likely be the least worst option.

Monetary policy, meantime, is not yet doing anything like the hard work it did during the GFC. The Reserve Bank will need to do more.

There is no doubt that if further dramatic restrictions on movement and work follow, we will have to go even further. . . 

Working capital will be the greatest challenges facing most businesses. The banks are rightly the first port of call. A government backed line of credit to banks to on-lend to businesses in trouble is required now. I know the government and banks are working on this; I’d encourage them to fast-track their plans.

On the assumption that this disruption could run to months, we should also move urgently to start on useful transport and water infrastructure – work that definitely needs to be done against nice-to-haves. We should fast-track legislation to get the shovels on the ground.

We cannot possibly stop every job loss, nor avoid every business collapse. But we can, and we should, do more to save as many jobs as we can.

Remember this is an economic shock created by government responses to a virus. This is why successive governments have reduced debt when they could. This is what we’ve prepared for.

My plea to the government is to focus on the here and now, and move more rapidly to stabilise businesses as best we can to save jobs. The National Party stands ready to help in any way we can.

The previous government was criticised in some quarters for its determination to return the government books to surplus.

The current government has been criticised for its determination  to keep debt low.

Both were preparing for a rainy day and that day has arrived.

It’s bucketing down and urgent action is needed to prevent the flood of business collapses and job losses that will follow.


Delivering broken promises

December 12, 2019

When the Prime Minister declared this the year of delivery, did she mean delivering broken promises?

Today’s half year economic and fiscal update is a damning indictment on Prime Minister Jacinda Ardern’s economic management as she puts New Zealand back in the red, National’s Finance Spokesperson Paul Goldsmith says.

“This Government inherited massive surpluses as far as the eye could see, and has blown them in two years.

The previous Labour government left a decade of deficits and National managed to get back into surplus in spite of the Canterbury earthquakes and GFC.

It’s taken just two years for Labour to undo that good work.

“Treasury has slashed its economic growth forecasts which means fewer opportunities for Kiwis to get ahead, less money to go around and more debt. The Government has turned the strong growth and huge surpluses it inherited into deficits, weak growth and more debt with nothing to show for it.

“The Government is pulling the economy down with one hand through added costs, uncertainty and incompetence, and trying to pull it up with other through more debt. It’s confused, incoherent and chaotic.

The Government has also broken its promise to New Zealanders to reduce debt below 20 per cent of GDP by 2022. This promise was only made because Labour knew New Zealanders didn’t trust them to spend wisely.

“That lack of trust has been fully justified.

“The Government would not need to break their debt promise by almost $5 billion if they had not wasted billions of taxpayer money on failed experimental policies like KiwiBuild, Fees Free or the Provincial Growth Fund.

Borrowing when interest rates are low to fund infrastructure investment isn’t necessarily feckless, but the government wouldn’t need to borrow if it hadn’t wasted money on fripperies.

“After spending its first two years deliberately stopping planned transport infrastructure, it’s a relief the Government has finally woken up to the need to get on with things. We, however, have little confidence it will deliver anything next year either. . . 

The announcement begs some questions.

It is borrowing $19 billion of which $12 billion is earmarked for infrastructure.

What is the other $7 billion to be spent on?

And why wait?

. . But details of these projects were not announced today.

Rather, Robertson said the Government would be announcing the specific projects in early to mid-2020. . . 

Of the new spending announced today, $8 billion is for specific “shovel ready” projects, with a further $4 billion on hand for future spending. . . 

If the projects are shovel ready why not start shoveling now? Do we have enough shovelers or will the work, as Politik says, need more migrants?

Like so many times before, what the government announced is a plan to plan, not actually a plan of action and the money it’s planning to plan to spend would be borrowed because it’s squandered the surpluses that ought to have been available for this type of investment.


Business blues deepen

August 30, 2019

Business confidence has fallen to the lowest point since the global financial crisis a decade ago:

The further collapse in businesses’ confidence and in expectations of their own activity is an indictment on the Ardern Government’s economic management, National’s Finance spokesperson Paul Goldsmith says.

“The most recent ANZ Business Outlook survey shows a net negative 52 per cent of businesses are pessimistic about the economy under the bad economic management of the current Government.

“To make it worse, businesses’ expectations of their own activity have fallen to a net negative for the first time since 2009 when the New Zealand economy was in the midst of the Global Financial Crisis. . . 

“When businesses lack confidence in the economy, as they do under the current Government, they are less likely to expand, invest in new staff or lift wages.

Reluctance to expand, invest or lift wages is even more likely when businesses’ expectations of their own activity are so gloomy.

“There has been a sharp decline in the New Zealand economy under this Government. Economic growth has decreased from around 4 per cent down to 2.5 per cent, per-person growth is amongst the worst in the OECD and business investment has fallen from 5 per cent a year under National to just 0.6 per cent under Labour.

“New Zealand should be doing well. The prices for goods we export are near historical highs meaning any effects from global uncertainty and trade tensions haven’t affected our exporters as of yet.

In spite of that farmers are in a similar frame of mind to that during the ag-sag of the 1980s. Uncertainty and  lack of trust in the government are compounded by fear of what it is going through inflict on the farming sector.

The ANZ survey shows the business blues have deepened in towns and cities too.

“Sadly the current Government’s bad economic management have hurt our economy.

“The Government have added costs to businesses and families with higher taxes and more regulations, they’ve created massive uncertainty and they’ve demonstrated incompetence, most famously with KiwiBuild and their woeful infrastructure policies.

“National will restore business confidence and revive our economy so that we can lift our aspirations, both in what we can earn and in what social challenges we can overcome.”

A thriving economy isn’t just about businesses doing well, it’s about job security, export income and the ability to invest in solutions for social problems.

The government has gone quiet on wellbeing with good reason. Businesses without the confidence to expand, invest and lift wages are a symptom of economic illness and that makes a very shaky foundation for wellbeing.


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