Farewell Michael

Written By: - Date published: 6:29 am, May 1st, 2009 - 23 comments
Categories: uncategorized - Tags:

Well the other shoe has dropped, and Michael Cullen has now left parliament. His valedictory speech is classic Cullen – best line (re his new role at NZ Post) “When I attacked National last year for swallowing so many dead rats little did I think that some might see me as one of them.”

Anticipating the usual drivel from right wing trolls, let it be stated that Cullen was an excellent, prudent manager of the economy. He has left us well placed to weather the current economic crisis – according to Treasury, the IMF, and even the National Party). It may get bad, but it won’t get nearly as bad as it would have if Cullen hadn’t planned ahead. His lasting legacy will be the visionary long term infrastructure that he put in place, KiwiSaver, KiwiBank, and the Superannuation fund.

I liked Vernon Small’s piece on Cullen’s farewell, and I can’t do better than his final words: “So retires from the House a hilarious, caring, clever, compassionate smart-arse.”
– Guest

To that I just want to add that, barring revolutionary reforms, Finance Ministers only have marginal impact on the performance of the economy as a whole in the short-term.

What they can do is influence the distribution of wealth to reduce poverty and build the foundations for the future. That is Cullen’s legacy – Working for Families, the Cullen Fund, paying down debt, a more progressive tax system (bottom rate down to 12.5%, top rate to 39%), returning assets to Kiwi hands and keeping them there, and policies like free doctors’ visits, free early childhood education, interest-free student loans the benefits of which we will experience in the decades to come.
-Eddie

23 comments on “Farewell Michael”

  1. What a load of BS. Cullen was a right wing politician who implemented and promoted neoliberal economic policies that have impacted adversely on ordinary people.
    This sort of pro-Labour crap – no matter what – is so typical of The Standard.

  2. Tim Ellis 2

    I disagree with you, Eddie, on Cullen’s legacy. I think historical reviews of him will be mixed. He will be considered a darling of the Left for his redistribution of wealth. On the right, I think his massive increases in social spending will be seen to have been unsustainable, and have left us a decade of deficits. He has left many years of crippling debt for the current National Government to deal with. There will also be very mixed views of his performance in managing the economy. On the Left, you will point to the years of growth under Cullen. On the Right, many will point to the fact that New Zealand’s strong economic performance was due to buoyant international economic conditions, high commodity prices, and factors outside the Minister of Finance’s control.

    I don’t think Cullen succeeded in creating an economic culture-shift under Cullen. Social service spending ballooned, with little to identify real improvements in outcomes. I think many on the right will view the Cullen years as wasted economic opportunity. It was a time when New Zealand should have cashed in and made real productivity gains in the long term. We didn’t.

    To be charitable to Cullen, he was a highly competent Minister with a very strong grasp of his portfolios and he wasn’t dominated by officials. That is the mark of a good Minister. I think it’s also fair to say that just as Clark was the undisputed political leader of her generation, Cullen was the undisputed parliamentary master of his generation.

    As a parliamentary valedictory, it is brilliant. I do wonder whether when MPs begin to carve out their careers, they should begin writing and framing their valedictory speeches. Cullen’s was masterful.

    • r0b 2.1

      He has left many years of crippling debt for the current National Government to deal with.

      Cullen massively reduced debt, which is why NZ was well placed going in to this crisis. Future projected debt arising from the international crisis certainly needs dealing with, but deal with it we can, by raising taxes.

      On the Right, many will point to the fact that New Zealand’s strong economic performance was due to buoyant international economic conditions, high commodity prices, and factors outside the Minister of Finance’s control.

      On the Right many will continue to ignore the fact that NZ did better than other comparable economies during this time, while also paying down huge amounts of debt (left to us by the previous National administration).

      Social service spending ballooned, with little to identify real improvements in outcomes.

      What “identifies” improvements? Numbers on benefits fell, numbers below the poverty line fell, crime rates fell, suicide rates fell – all those are directly measurable. And many of the real improvements in outcomes are long term, visionary planning to deal with the problems of the future (superannuation). Cullen didn’t spend it all on short term fixes, or piss it all away in tax cuts to the rich, he thought long term, he acted long term. Very rare in a politician, and NZ will be thanking him for decades to come.

      • mickysavage 2.1.1

        Why is it that when the economy does well under a left of centre Government it is because of buoyant economic conditions but if it does well under a right wing Government it is because of wise stewartship?

        • jerry 2.1.1.1

          You do realise the same arguement is used by your political opponents albeit with opposite players.

        • Chris S 2.1.1.2

          Agreed Micky.

          Also, when the economy does poorly, directly linked to bad global economic issues, it’s all Cullen’s fault?

          They need to get their attack lines sorted out.

      • BLiP 2.1.2

        What r0b said, plus:

        It was a time when New Zealand should have cashed in and made real productivity gains in the long term. We didn’t.

        That was down to the private sector which preferred to ship containers of cash offshore rather than invest in New Zealand.

        To be charitable to Cullen . . .

        If you’re going to wite bollocks and echo Kiwiblob nonsense, why bother?

  3. BeShakey 3

    In response to Tim, I don’t think that an assessment of a Minister (of the left or right), should be based on whether their opponents like what they did. Even in that regard Cullen has left a raft of measures that, while perhaps not liked, are now accepted as part of the political landscape.

    In terms of unproductive social investments, there were undoubtedly some of those, but I question whether there were as many or if they were as costly as sometimes claimed. Many of the investments will show social, economic and environmental benefits only over the longer term. Examples include some of the education and health investments. While it would be nice to have short-term outcome (rather than output) indicators of the success of these programmes, no one on the right that I’ve talked to has been able to suggest any. That leaves the option of doing nothing to address many of the entrenched issues in New Zealand, or taking the kind of long term/big return measures that Cullen/Labour took.

    In one respect I think that will be an important Cullen legacy, he was willing to introduce measures that weren’t going to have as large a political payoff in his political lifetime as some of the alternatives.

  4. lprent 5

    I’ll miss him. After 30 years of barely incompetent management at the treasury from the 60’s to the 90’s, we finally got a manager who was aware of the downstream costs and risks of doing or not doing change.

    It meant for the first time during my lifetime we were not merely lurching from political or fiscal crisis to the next one. Some forward planning was being done on what happens in the coming decades. In particular with the shifting age balances in the population with the impacts that brings on superannuation, healthcare, tax-payer base, etc.

    Sure Michael Cullen had a good decade to do it in. However he concentrated on improving the governments fiscal position by killing government debt as fast as was feasible. This resulted in the effective removal of the interest payments that had been bleeding our fiscal position dry since the 70’s. At one stage for a number of years, the interest on government debt was the single largest line item in the budget. Removing that interest burden was the biggest single productivity boost that the economy could have received. It also substantially reduced our forward risks when inevitably the world economy went into a substantial decline, as it has now.

    Similarly he put in place some measures to ameliorate the future liabilities of an aging population. The NZ Superannuation fund is designed to reduce the burden on future taxpayers for the superannuation of the current taxpayers. Similarly Kiwisaver is designed to assist with rising expectations of superannuates with the constrained tax base of an aging population.

    To do that he resisted the short-sighted calls to do tax-cuts, preferring to secure our longer term position rather than shore up short-term popularity as other parties did. Eventually he was pushed into accepting the political need for personal taxcuts (the business taxes had already been cut for a good reason). It was probably his only really poor decision. We still have the forward liabilities that are not covered, and will have to be by the taxpayers when they come due.

    There are innumerable things that he put into place. From the trivial to the extreme. However they were all done with considerable forethought. A stark contrast to the thoughtless short-term changes that were common with Muldoon, Douglas, and Birch. In the latter two they were heavily constrained by Muldoons legacy.

    The biggest problem that he was only starting to work on was the appalling private debt and private savings record in NZ. However he did start the work that was required to correct those imbalances taht are still in our economy.

    I’ll miss him as being the most effective treasurer we have had in my lifetime, because he concentrated on the long-term goals rather than fire-fighting.

    The jury is still out on English, who is in fire-fighting mode at present with the global problems. It will be interesting to see if he can manage to balance between the short and long-term issues.

  5. Pat 6

    I thought Cullen’s best line was at the end:

    “To the Greens – good luck. But loosen up a bit; saving the planet needs to sound less like a punishment for our sins if it is going to succeed.”

    In one sentence, he has hit the nail on the head. I wonder in the Greens are smart enough to see that this is their primary problem with their message.

    catchpa: bestpaid wits

    Cullen certainly was!

  6. Pascal's bookie 7

    Yep, right on Lynn.

    Thanks Dr. Cullen, and go on, write a book. 🙂

  7. Mikey 8

    Just remember we know have a Prime Minister who accused Cullen of over-taxing the country by the size of the $11 billion surplus – money in fact that had been allocated if you understand fiscal policy. It was a cynical play on journalist’s failure to grasp fiscal policy – their ignorance something Cullen noted on Weds (not Vernon Small I should add). Funny how tax cuts are now no longer the silver bullet the Nats so long claimed them to be. And imagine how the debt position would look like it if Cullen had listened and made big tax cuts. I would have thought saving should be a key policy in dark times too – sensible long term policy and what have the Nats done, pruned KiwiSaver and will shortly take the axe to the Super Fund in the Budget. Where is their plan for recovery – no tax cuts – lower savings – no R&D assistance – no science fund?

  8. Stephen 9

    And imagine how the debt position would look like it if Cullen had listened and made big tax cuts.

    Can anyone guess what the debt position would be if he’d given equivalent tax cuts for all instead of WFF?

    • lprent 9.1

      Now or in the future? Short-term or long-term. That is exactly the response you’d expect from a short-thinking Treasurer.

      Look at the long-term downstream costs when the kids that WFF was targeted at hit (or didn’t hit) the workforce. The costs of having kids is pretty high. It was rapidly getting to the point that couples in the lower to mid income brackets wouldn’t have kids because it was too much of a financial strain.

      So it meant that people like me who don’t have kids would have been looking at a severely reduced tax base to support our needs when we get old and feeble. WFF is a good long-term measure to prevent a inter-generational tax crisis in 20-30 years time. It certainly reduced the severe drop in birth rate that was happening during the 90’s.

  9. Stephen 10

    Eventually he was pushed into accepting the political need for personal taxcuts (the business taxes had already been cut for a good reason). It was probably his only really poor decision.

    Didn’t he effectively raise taxes on many by not adjusting for inflation all those years?

  10. Tom M 11

    He should totally start a blog, it would be phenomenal.

  11. BeShakey 12

    Can anyone guess what the debt position would be if he’d given equivalent tax cuts for all instead of WFF?

    About the same as now, but with worse social outcomes for those for whom WFF provided social and economic benefits?

  12. jarbury 13

    Can anyone guess what the debt position would be if he’d given equivalent tax cuts for all instead of WFF?
    It would be, almost by definition, the same. After all, you did say equivalent.

    Working for Families is the first genuine attempt to reduce social inequality since…. the 1960s? No wonder the right hates it so much.

  13. Stephen 14

    Thanks you two.

    It would be, almost by definition, the same. After all, you did say equivalent

    I’m not intimately familiar with issues of the economy, however I do have the impression that taxes have some sort of effect on the economy. Say if all people earning under 40,000 got the money funnelled into WFF, would that have had a different effect to giving money to couples earning $100,000 (remember the ipod ad!)?

    Working for Families is the first genuine attempt to reduce social inequality since . the 1960s? No wonder the right hates it so much.

    So why give it to the rich*?! I think what the right hate about it are the really high marginal tax rates that can occur…

    *Which lately seems to be those earning over 40k, but hey whatever.

  14. jarbury 15

    Lowering taxes generally benefits those earning the most. The right is a bit disingenuous on this issue saying “$10 a week extra means more to a poor person than $100 a week extra to a rich person – that’s total bollocks, the rich person has still done way better out of the deal. The only time this doesn’t happen is when tax rates on low thresholds are reduced (or ideally eliminated). The right generally argues that giving the rich more money is good for the economy, therefore tax cuts are good for the economy and for society as a whole (that is, if they actually care about society as a whole).

    However, that is only true if you believe in “trickle-down” economics. Increasing polarisation of wealth in the USA over the past 30 years tends me to think that trickle-down economics is a farce, and tax cuts for the wealthy benefit them and them alone.

    Anyhow, getting back to WFF there is an obvious advantage in targeted assistnce – in that it’s TARGETED. That is, it goes to those who most need it, and because it doesn’t go to a wider group of people than those who most need it, it can have the biggest effect. I can’t exactly remember the income rate where WFF disappears, but even if it is $100,000 I can see how a family with that income (probably via a single-income earner), a big mortgage and potentially a few kids would need it more than a few uni graduates on $40k each sharing a flat.

    For what is spent on WFF you probably could create a tax free threshold for maybe the bottom $25k of income. However, that’s going to assist your multi-millionaire just as much as a middle-income family who really need the money. And because both the multi-millionare and the middle income family both get this money (and all the recent grads, and the DINKYs) there’s far less money in the pot for the targeted assistance – so therefore there ends up being less assistance.

    Regarding high marginal tax rates… well that’s life when you do something like this. I don’t really think they disincentivise people from wanting a better paid job… surely everyone wants to be paid more, even if it’s just a little bit more after tax. Do you really reckon someone would turn down the opportunity for a higher paying job, or work harder to achieve one, because they know their tax rate might go up a bit?

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    I have no special insights to offer on the Labour sexual assault coverup. All I have is disgust. Disgust that an organisation could fail its people so badly. Disgust that they punished the victims rather than the perpetrator. Disgust that its party hacks are apparently blaming the victims for demanding ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Speak Up for Women calls out Greens’ censorship
    This open letter to the Green Party was penned after an opinion piece by Jill Abigail, a feminist and founding member of the party, was censored by the Greens’ leadership. (Redline has reprinted her article here).The intolerance of the Green Party leaders and their acceptance of the misogyny of gender ...
    RedlineBy Daphna
    1 week ago
  • Member’s Day: End of Life Choice, part 3
    Today is a Member's day, and David Seymour's End of Life Choice Bill continues its slow crawl through its committee stage. They're spending the whole day on it today, though the first hour is likely to be spent on voting left over from last time. After that they'll move on ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Flight to Los Angeles turned back after passengers decide they don’t want to go anymore
    An ambitious plan to fly to Los Angeles petered out into a brief sight-seeing trip and a desire to return home and get some sleep before work tomorrow. Air New Zealand has confirmed a flight to Los Angeles last night was turned back about a quarter of the way into ...
    The CivilianBy admin
    1 week ago
  • Indigenous Futures: defuturing and futuring – an analytical framework for policy development?
    There appears to be consensus – by omission – that the concept of indigenous futures should be accepted at face value. So I scavenged the internet to see if I could locate an academic descriptor or a framework around how we think about it as a concept, and whether it ...
    EllipsisterBy Ellipsister
    1 week ago
  • Cadbury rumoured to be releasing the Pineapple Trump
    Here’s another novelty chocolate to shove in your gob, New Zealand Cadbury could be seeking to make itself great again with a rumoured new release: Pineapple Trumps, a spin on its classic chocolate-encased pineapple treat and do-it-yourself tooth remover. The global confectionery manufacturer and bumbling “before” character in an infomercial, ...
    The CivilianBy admin
    1 week ago
  • The coming resource war.
    During my time in the Pentagon I had the privilege of sitting down with military leaders and defence and security officials from a variety of Latin American nations. Sometimes I was present as a subordinate assistant to a senior US defence department official, sometimes as part of a delegation that ...
    KiwipoliticoBy Pablo
    1 week ago
  • Māori Language Week with The Civilian
    Kia ora, Aotearoa. It’s that magical time of year. Te Wiki o te Reo Māori. In English, the week that frightens talk radio. As you probably know by now, all your favourite media outlets are participating, some more successfully than others. Stuff has changed its name to Puna for the ...
    The CivilianBy admin
    1 week ago
  • Will Horizons act on climate change?
    Local body elections are coming up next month. And it looks like all Palmerston North candidates for Horizons (the Manawatu-Whanganui Regional Council) want to take action on climate change:Climate change is set to be a key issue in Palmerston North for the next three years if those wanting to get ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • BORA reform is stalled
    Eighteen months ago, the government promised to strengthen the Bill of Rights Act, by explicitly affirming the power of the courts to issue declarations of inconsistency and requiring Parliament to formally respond to them. So how's that going? I was curious, so I asked for all advice about the proposal. ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Corbyn and Brexit
    As the Brexit saga staggers on, the focus is naturally enough on the Prime Minister and his attempts to achieve Brexit “do or die”. But the role played by the Leader of the Opposition is of almost equal interest and complexity. The first problem for Jeremy Corbyn is that he ...
    Bryan GouldBy Bryan Gould
    1 week ago
  • A ditch for him to die in
    Last week, English Prime Minister Boris Johnson boldly declared that he would rather die be dead in a ditch than delay Brexit. Unfortunately for him, the UK parliament accepted the challenge, and promptly dug one for him. The "rebellion bill" requires him to ask for and secure yet another temporary ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Warning! Warning! Danger Jacinda Ardern! Danger Marama Davidson! Warning!
    Lost In Political Space: The most important takeaway from this latest Labour sexual assault scandal, which (if I may paraphrase Nixon’s White House counsel’s, John Dean’s, infamous description of Watergate) is “growing like a cancer” on the premiership, is the Labour Party organisation’s extraordinary professional paralysis in the face of ...
    1 week ago
  • Union solidarity with Ihumatao land occupation
    by Daphna Whitmore Every Sunday for the past two months unionists from First Union, with supporters from other unions, have set out to the Ihumatao land protest, put up gazebos and gas barbeques, and cooked food for a few hundred locals and supporters who have come from across the country. ...
    RedlineBy Daphna
    1 week ago
  • Climate Change: The wrong kind of trees?
    Newsroom today has an excellent, in-depth article on pine trees as carbon sinks. The TL;DR is that pine is really good at soaking up carbon, but people prefer far-less efficient native forests instead. Which is understandable, but there's two problems: firstly, we've pissed about so long on this problem that ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • No freedom of speech in Turkey
    Canan Kaftancioglu is a Turkish politician and member of the opposition Republican People's Party (CHP). Like most modern politicians, she tweets, and uses the platform to criticise the Turkish government. She has criticised them over the death of a 14-year-old boy who was hit by a tear gas grenade during ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Speaker: Tadhg Stopford: Why I’m standing for the ADHB
    Hi there, just call me Tim.We face tough problems, and I’d like to help, because there are solutions.An Auckand District Health Board member has nominated me for as a candidate for the ADHB, because her MS-related pain and fatigue is reduced with hemp products from Rotorua.  Nothing else helped her. If I ...
    1 week ago
  • Good little vassals
    The Inspector-General of Intelligence and Security has published their report on whether the SIS and GCSB had any complicity in American torture. And its damning. The pull quote is this:The Inquiry found both agencies, but to a much greater degree, the NZSIS, received many intelligence reports obtained from detainees who, ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Who Shall We Turn To When God, And Uncle Sam, Cease To Defend New Zealand?
    Bewhiskered Cassandra? Professor Hugh White’s chilling suggestion, advanced to select collections of academic, military and diplomatic Kiwi experts over the course of the past week, is that the assumptions upon which Australia and New Zealand have built their foreign affairs and defence policies for practically their entire histories – are ...
    1 week ago
  • The Politics of Opposition
    For most of the time I was a British MP, my party was out of government – these were the Thatcher years, when it was hard for anyone else to get a look-in. As a front-bencher and shadow minister, I became familiar with the strategies required in a parliamentary democracy ...
    Bryan GouldBy Bryan Gould
    1 week ago
  • More expert comments on the Canadian fluoride-IQ paper
    The Green et al (2019) fluoride/IQ is certainly controversial – as would be expected from its subject (see If at first you don’t succeed . . . statistical manipulation might help and Politics of science – making a silk purse out of a sow’s ear). Anti-fluoride campaigners have been actively promoting it ...
    2 weeks ago
  • The return to guerrilla war in Colombia
    by Gearóid Ó Loingsigh On August 29th a video in which veteran FARC (Revolutionary Armed Forces of Colombia) commander Iván Márquez announced that they had taken up arms again was released. There was no delay in the reaction to it, from longtime Liberal Party figure and former president Uribe, for ...
    RedlineBy Admin
    2 weeks ago
  • Air New Zealand identifies this enormous plot of unused land as possible second airport site
    Air New Zealand couldn’t believe its luck that this seemingly ideal piece of real estate had so far gone entirely unnoticed. Air New Zealand’s search for a site to build a second Auckland Airport may have made a breakthrough this afternoon, after employees scanning Google satellite imagery spotted a huge, ...
    The CivilianBy admin
    2 weeks ago
  • Redline on the Labour Party
    No-one on the anti-capitalist left in this country today puts forward a case that Labour is on the side of the working class.  There are certainly people who call themselves ‘socialist’ who do, but they are essentially liberals with vested interests in Labourism – often for career reasons. Nevertheless, there ...
    RedlineBy Admin
    2 weeks ago
  • New Fisk
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Labour’s failure
    When National was in government and fucking over the poor for the benefit of the rich, foodbanks were a growth industry. And now Labour is in charge, nothing has changed: A huge demand for emergency food parcels means the Auckland City Mission is struggling to prepare for the impending arrival ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Ardern attempts to vaccinate Clarke Gayford live on television to prove that it’s safe
    Gayford, pictured here on The Project, before things got wildly out of control. A bold public relations move by the Government to encourage parents to vaccinate their children has gone horribly wrong. Prime Minister Jacinda Ardern appeared on tonight’s episode of Three’s The Project, where the plan was for her ...
    The CivilianBy admin
    2 weeks ago
  • Has Mr. Whippy gone too far by parking on our front lawns?
    Mr. Whippy’s business model has driven it down a dark road of intimidation. Residents in major centres around the country are becoming disgruntled by the increasingly aggressive actions of purported ice cream company Mr. Whippy, who have taken to parking on people’s front lawns and doorsteps in a desperate attempt ...
    The CivilianBy admin
    2 weeks ago
  • Cleaning up the water
    Today the government released its Action Plan for Healthy Waterways, aimed at cleaning up our lakes and rivers. Its actually quite good. There will be protection for wetlands, better standards for swimming spots, a requirement for continuous improvement, and better standards for wastewater and stormwater. But most importantly, there's a ...
    No Right TurnBy Idiot/Savant
    2 weeks ago
  • Fronting up
    Today I appeared before the Environment Committee to give an oral submission on the Zero Carbon Bill. Over 1,500 people have asked to appear in person, so they've divided into subcommittees and are off touring the country, giving people a five minute slot each. The other submitters were a mixed ...
    No Right TurnBy Idiot/Savant
    2 weeks ago

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