web analytics
The Standard

National: Irresponsible Economists and Liars

Written By: - Date published: 1:46 pm, June 10th, 2010 - 21 comments
Categories: budget 2010, tax - Tags: ,

National’s budget broke a number of economic promises. One that’s not been emphasised enough is their commitment to be fiscally neutral.

Labour got New Zealand to $0 net government debt, we actually had net financial assets for the first time. Now we are headed back into the red again and National is making it worse, not to create jobs to help ordinary Kiwis through the recession, but to fund tax cuts for their rich mates. Labour got in independent economists and have discovered that it is not just in the first year the government is more than $500 million short, by 2024 there is a $9 billion budget shortfall. The new taxes imposed (GST & rental property loophole closure) will not increase their value over the years in the same way as those cut (income and business taxes) would have. As they are also refusing to invest in the Cullen Fund once they are projected back into surplus in 2016, another lie, the baby-boomer superannuation hole just gets ever bigger.

With their GST rise (another broken promise…), tax cut for the rich, ACC levy rises, rent increases, additional Early Childcare Education costs, increased power and petrol prices from the ETS (flowing on to everything that’s transported – like food), this is a very inflationary budget.

And what does an inflationary budget mean: on Thursday Alan Bollard will have to start raising interest rates. And he’s going to have to keep raising them. So those renting will be hit by the closing of landlord’s tax loopholes, and those with mortgages will be hit by the increased interest rates. Everyone earning under $80-90K will be worse off next year after their housing costs are added to their GST, ACC and ETS costs.

Increased interest rates have another side effect too. Money will start to flow into New Zealand in the “carry trade” that ruined Iceland. The Japanese will prefer our high interest rates to their own at 1%, so they’ll put money in our banks. This raises the exchange rate, killing the exporters who we need to grow our economy. Some speculators are already talking about parity with the US dollar next year.

So the Government will make the vast majority of people worse off, and harm our exporters trying to grow us out of the pending superannuation debt problem that National is making worse. What to the future though, maybe the next generation can save us? The bright skilled workers coming out of our tertiary education institutions will have the ideas – except that 8500 (and counting) students won’t be coming out of those institutions as the government has frozen the dollar amount of funding for tertiary education. And cut ACE and the Training Incentive Allowance for those going back for a second chance. High-skill, high wage economy? Not with these jokers.

All this so those earning above $80k can enjoy tax cuts; those on $1 mill get $1000 a week, to be paid for by debt and hitting the most vulnerable. The old will suffer with meals on wheels cuts, home care slashed, having their pension rise attenuate over the next 2 years so they’ll have to pay the extra GST without extra income after that, and having resident withholding tax increased to 21%. The young have ECE cut, so no longer will there be an equal opportunity for all New Zealanders to start out on their good foot.

National aren’t creating a fair New Zealand, an economically or ecologically responsible New Zealand. The pay off? Their rich mates get richer, and we have less than 1% additional growth in 8 years time.

Bunji

21 comments on “National: Irresponsible Economists and Liars”

  1. ianmac 1

    Of course it could be deliberate. If cost of living goes up and the Government is short of finance, what better excuse to sell assets like Kiwirail, shift Super age entitlement out, user-pays unemployment benefit, part payment of hospital charges, limit DPB to a short time and lower the bar for entry of Maori to prison. Machivalian experts in there somewhere

    • jimmy 1.1

      There is just too many reasons for this government to run us into the ground, no doubt a little jealous of their Greek counterparts (the Greek version of the Tories that is). They would love nothing more than another recession.

      Another economic bump and were screwed, prudence would have been the logical move but hell its not like they are trying to prove that elected citizens can run an economy.

  2. seth 2

    Thats strange, because Labour were so fiscally irresponsible we ended up having to borrow $250 million a week. Thanks to policies such as their fcuking stupid vote buying interest free student loans policy and then buying the dog that is Kiwirail for 3 times what it was worth. This is not to mention getting 50% of all families in New Zealand dependent on government handouts/rebates/benefits in order to have children.

    And you call that fiscally responsibile? Please promise me you will never ever get a job where you are in charge of spending money or buying things.

    [lprent: Or it could be that the tax cuts were fiscally irresponsible… ]

      • Bored 2.1.1

        Nice comment Kaplan “I suggest you inject some reality into your life”. You will like most people probably say the same to me, but at the risk of Bored being boring here it is:

        * the only really good thing I see about what Labour did was to recognise the folly of debt and act upon it, to be commended.
        * the whole gammut of those tea leaf readers we call economists seem to believe in two things, the ability to have limitless growth on a limited planet AND the ability to create debt and pay the bill in the future.

        If we could grow continuously we could prop up this debt but it is really a Ponzi scheme, a pyramid underpinned by the use of non renewable resources. They happen to be running out, sort of stuffing up supply and demand graphs geared to constant growth.

        Boring and tedious I know, but the baliff will appear to collect the debt. Cant say we have not warned all and sundry, as Jeremiahs we will expect to be blamed aswell. So enjoy the party whilst it lasts, or go home early and make other arrangements.

    • Lanthanide 2.2

      Interest free student loans was blatant vote buying, but it is also damn good policy. I do think they tipped it a bit too far to the generous side, and I approve of Joyce’s $50/year fee for people with loans.

    • Sam 2.3

      In actual fact, interest free student loans was more from the good work done by NZUSA than it was Labour investing in our future.

      But whatever.

    • Draco T Bastard 2.4

      We ended up having to borrow $250m/week (which I believe is wrong but I’ll stick to your figures) because of tax cuts. Without those tax cuts then we wouldn’t have need to borrow. NACTs further tax cuts mean that we get to borrow even more putting us even further in to the red.

      BTW, Cullen didn’t want to put into place that tax cuts that he did but they were a hell of a lot more responsible than the ones that NACT put in once in power.

  3. Pete 3

    Ignoring the ignorant (seth), thanks for the comment Bunji.

    To be fair to the government though, less than 1% additional growth is still “growing the pie” like their supporters always said they would.

    • Bunji 3.1

      Yes, but you’re going to have to grow the pie an awful lot more than that if you’re going to make up for cutting down most people’s share of the pie.

      captcha: policys (as in National have as rubbish ones as the spelling ability of the anti-spam machine)

    • Draco T Bastard 3.2

      1% growth would be growing the pie – if it happens and all real experience of such things over the last 30 years of neo-liberalism has shown that it doesn’t.

  4. Good post. Shame that there is so much attention on Ministerial visa card use today. The wingnuts ought to read this instead. They may learn something, like what a great job Michael Cullen did.

    • seth 4.1

      Right…..if he did such a great job, how come we plunged into recession as soon as a whiff of anything bad happened? How come they lost the election by a landslide if they were doing such a great job?

      Why is it that Key and his lot is being held up in Australia as an example of what Kevin Rudd’s Labour should’ve done? Surely they should be using Michael Cullen as the example if he was so amazing?

      • Lanthanide 4.1.1

        From your apparent beloved master English in 2008 after he took office:

        “Having condemned his predecessor for many years for paying off debt too quickly, English said: “I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook.”

        “In New Zealand we have room to respond. This is the rainy day that Government has been saving up for,” he told reporters at the Treasury briefing on the state of the economy and forecasts.”

        Grow a brain.

      • zonk 4.1.2

        Because the right wing wet dreamers are all about greed and ignorance. This is the right wing revival based on climate chamge denial…

        • Andy 4.1.2.1

          Interesting approach, since the ETS will result in a wealth transfer from the average NZ household to the rich forestry and electricity company owners.

          How does this fit in with a left wing viewpoint, one may ask?

      • mickysavage 4.1.3

        if he did such a great job, how come we plunged into recession as soon as a whiff of anything bad happened

        Ask Blinglish

  5. I feel like i’m at the base of a giant pyramid scheme run by the gov’t who know it’s gonna collapse real soon. So they’re getting as much as they can out of it by rorting the system and paying off their mates with taxcuts that when the shit global money market hits the fan of popular discontent, they’ll hopefully have stolen enough off the taxpayer to protect themselves from the blowback.

    Come that day i’m pickin they’ll leave this country for dead and retire to some private island in another part of the pacific or a walled community here in NZ

    The other thing i feel, is that they’re stupid if they think money will protect them.

    • Bored 5.1

      Thanks Polly, much along my way of looking at it, we are watching an argument over how best to walk a dead duck. No amount of stroking the feathers into shape is going to resurrect it, better perhaps to prepare it for the oven.

  6. Herodotus 6

    “Labour got New Zealand to $0 net government debt, we actually had net financial assets for the first time” yet gross debt only reduced from about $37b to about $30b. So there was minimum gross debt repaid, this fact always gets overlooked and that for 8 of the 9 Lab years the gap between rich and poor was extented ref Parl Question time ealier on in the month as to a tabled docomunent that was tabled by both Lab and NAt within 5 minutes of each other.
    “..National aren’t creating a fair New Zealand..” funny enough Labour achieved almost everything that is now being pointed towards National (except min wage increase). Did not the OCR hit 8.5% just before the election and inflation rose to 4% on 2 occassions and the range that the Reserve Bank had to keep inflation was widneed from 1-2% to 1-3% and this new target was achieved by the reserve bank about 50% of the time.
    Until both sides cease this partisian attitude of blindly following “US” without any policies to point to how can NZ achieve anything. No wonder the MP’s spending has taken so much time in the media as there is no substance to be seen from a politicial party. Unless those on this site start to demand something tangible from Labour all we will have is the blind leading the blind, and NZ will be slipping behind what is now 3rd World countries in performance.

Recent Comments

Recent Posts

1 2 3 8

  • Tragedy must be impetus for better training
    The Police Minister needs to explain why unsworn and inadequately trained custody officers were put in a situation of caring for a medically unwell prisoner on a busy Saturday night, Labour’s Police spokesperson Kelvin Davis says. Commenting on an IPCA… ...
    11 hours ago
  • Government must be more transparent on investor state clauses
    The Government must be more transparent around the draft investor state dispute settlements in the TPPA, says David Parker, Labour’s Export Growth and Trade spokesperson. “Labour is pro trade, and is proud of the FTA we negotiated with China, which… ...
    16 hours ago
  • Protect university staff and student voices
    The Green Party believes ensuring student and staff representation on university councils is important. National recently passed a law reducing the size of university governance councils while increasing the proportion of the members nominated by, guess who… Steven Joyce. The… ...
    GreensBy Gareth Hughes MP
    1 day ago
  • C’mon Nick what’s the truth on the RMA
     “Nick Smith has got to fess up and tell us what is happening to his much vaunted RMA reform, Labour’s Environment spokesperson Megan Woods says.  “With just a day and a half to go before the polls open in Northland,… ...
    1 day ago
  • SSC salaries sink National’s spending spin
    Massive pay rises at the State Services Commission prove National’s claims of clamping down on spending in the public sector are simply fantasy, Labour’s State Services spokesman Kris Faafoi says. “Salaries in this one department are almost $70,000 more than… ...
    1 day ago
  • We can fix Christchurch and keep our assets
    The Christchurch City Council is seeking public feedback on its proposed 10 year plan for Council revenue and spending. This is probably one of the most significant 10 year plans ever to be written by a local council because of… ...
    GreensBy Eugenie Sage MP
    2 days ago
  • Epidemic of serious assaults in our prisons
    Labour wants stab proof vests and pepper spray for all corrections officers to keep them safe from the epidemic of serious prison assaults that are occurring around the country’s jails, says Labour’s Corrections Spokesperson Kelvin Davis.  “There have been five… ...
    2 days ago
  • Listen to the locals Hekia!
    Minister Hekia Parata needs to understand what consultation is, Port Hills MP Ruth Dyson says. “It means you have to listen to what people say in their submissions and then be able to demonstrate you have considered their views when… ...
    2 days ago
  • Thanking our caregivers
    Let’s celebrate and thank our caregivers. This week is caregivers’ week. It’s a chance to acknowledge the thousands of women, and occasional other person, who are caring for the elderly and disabled in our country. They hold people’s lives in… ...
    GreensBy Jan Logie MP
    2 days ago
  • Mana Post shop the best outcome for community
    Labour MP for Mana Kris Faafoi has welcomed the move to place the services from the Mana Post shop to a local small business. “This is the best outcome for the community we could ask for. All the vital services… ...
    2 days ago
  • Labour looks to put the tea back into entitlements
    Labour is moving to restore the rights of Kiwis to take tea and rest breaks, Leader Andrew Little says. “Within months of the Government’s Employment Relations Amendment Bill becoming law we are already seeing some of our largest companies, including… ...
    3 days ago
  • Desperate money grab to keep Ruataniwha afloat
    The Hawke’s Bay Regional Investment Company’s decision to borrow $4 million to keep the Ruataniwha project afloat is a case of throwing ratepayer’s good money after bad, says Labour’s Water spokesperson Meka Whaitiri and Napier MP Stuart Nash.   “This bridging… ...
    3 days ago
  • Roundup: UN finds it “probably” causes cancer
    At last the UN has spoken out against the widely-used weedkiller Roundup. The UN’s International Agency for Research on Cancer has identified glyphosate, the principle ingredient in Roundup, as a probable carcinogen. They also include as probable carcinogens the insecticides… ...
    GreensBy Steffan Browning MP
    4 days ago
  • Invermay petition delivered to Parliament
    Labour’s Economic Development spokesperson David Clark handed over a 12,450 signature Save Invermay petition to Dunedin South MP Clare Curran on the steps of Parliament today.  “The level of support that the petition has received across New Zealand is overwhelming,”… ...
    4 days ago
  • Redcliffs School closure plan wrong
    The Government’s proposal to consult on the closure of Redcliffs School not only goes against the best geotechnical advice, but more importantly goes against the best educational outcomes for Redcliffs children and the health of our community, Port Hills MP… ...
    4 days ago
  • Cotton On first to test the tea breaks law
    Australian corporate Cotton On, the first major business operating in New Zealand to exploit the new tea breaks law, could walk away from negotiations if it doesn’t get its own way, says Labour Party Labour Relations spokesperson Iain Lees-Galloway.  “Cotton… ...
    4 days ago
  • World water day: eight rivers in one day
    Our photo journey started by the Waioweka (also known as Waioeka) River which flows from Te Urewera to Opotiki, and is surrounded by beautiful forest. The water looked great! Kopeopeo Canal It contrasted greatly with the Kopeopeo Canal near Whakatane,… ...
    GreensBy Catherine Delahunty MP
    4 days ago
  • Council can stop Port’s encroachment on harbour
    As owner of the Port of Auckland, Council can stop the wharf extension and reclamation if it wants to, says Labour’s Auckland Issues spokesperson Phil Goff. ‘As owner the council is custodian of the port and harbour on behalf of… ...
    4 days ago
  • We all benefit when education meets everyone’s needs
    As Dyslexia week comes to a close,  Dyslexia NZ have reminded us that around 10% of our citizens are dyslexic and are entitled to better support. One of their strongest arguments is that failure to provide identification and support for… ...
    GreensBy Catherine Delahunty MP
    5 days ago
  • State house sell-off fiasco a gift for developers
    The Government’s property developer mates are the only people who can salvage National’s state house sell-off now the Salvation Army has torpedoed the policy, Labour’s Housing spokesperson Phil Twyford says. “Having been cynically used by the Government as the poster… ...
    5 days ago
  • National reinforces inequality in schools
    The National Government’s flagship programme Investing in Educational Success is clearly reinforcing inequality in the school system, Labour’s Education spokesperson Chris Hipkins says. “The analysis released today by the NZEI clearly shows schools in wealthier suburbs are the main beneficiaries… ...
    5 days ago
  • Big change starts small
    Today marks Race Relations Day in New Zealand. Race Relations Day coincides with the International Day for the Elimination of Racial Discrimination.  The United Nations General Assembly chose this day as it marks the day in 1960 when 69 peaceful… ...
    GreensBy Denise Roche MP
    7 days ago
  • Israel, Palestine and the question of statehood
    The knife-edge election in Israel complicates the Middle East situation, even more than usual. The Prime Minister-elect, Binyamin Netanyahu, is moving to form a government. Netanyahu has indicated that, during his term, a Palestinian state would not be established. That… ...
    GreensBy Kennedy Graham MP
    1 week ago
  • Christchurch transport goes backwards
    The Green Party has a vision of a liveable, accessible Christchurch with a sense of identity and strong connected communities. Instead, 2013 census figures released by Statistics New Zealand reveal a fractured community, and tell a story of frustrated Christchurch commuters… ...
    GreensBy Eugenie Sage MP
    1 week ago
  • Super Fund should divest $140 million in high risk coal
    The Green Party is calling on the New Zealand Super Fund to divest their $140 million investment in coal companies that are vulnerable to becoming financially stranded according to a damning new report from Oxford University. The Smith School of… ...
    GreensBy Russel Norman MP
    1 week ago
  • Learn to count with Mark Osborne: 0 + 1 = ?
    The adage about the first casualty of war being truth is one that might often be applied to the political battle for hearts and minds, and of course votes. A rather unfortunate example of this has been arriving in the… ...
    GreensBy David Clendon MP
    1 week ago
  • Is it still a safety net when the holes are this big?
    Over the last few weeks I’ve been wondering how safe our income support system is for people, especially those with cognitive or learning disabilities. I’ve been trying to support a young man who was severely injured in a workplace accident… ...
    GreensBy Jan Logie MP
    1 week ago
  • Pasifika – protecting the Pacific needed now more than ever.
    Over the weekend thousands of Aucklanders flocked to celebrate our city’s diverse Pacific communities and cultures at the annual Pasifika festival and the Greens were there to join them. The Pasifika festival has been held every year for 23… ...
    GreensBy Denise Roche MP
    2 weeks ago
  • Sounds Stakeholders Seek a Sustainable Future
    It was heartening to see a large number of people who care about the Marlborough Sounds come together at the Marlborough Marine Futures’ forum in Picton on March 8. Fellow Green MP Steffan Browning, who lives in Marlborough, and I… ...
    GreensBy Eugenie Sage MP
    2 weeks ago
  • Solid Energy, who will clean up the mess?
    What can you say? This state-owned coal miner is facing some very serious problems. They haven’t run a profit in years, have required two Government bailouts, laid-off more than 700 staff and look like they need a third injection of… ...
    GreensBy Gareth Hughes MP
    2 weeks ago

Removed at the request of The Daily Blog.
Public service advertisements by The Standard

Current CO2 level in the atmosphere