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Fudge-it-Budget

Written By: - Date published: 9:18 am, December 11th, 2014 - 31 comments
Categories: ACC, accountability, budget 2014, debt / deficit, economy, Economy, gst, Politics, tax - Tags:

The lied about surplus in the run up to the 2014 National Election is looking like matching Penn and Teller for magical skills. It’s the ultimate disappearing act.

Unlike bad economic figures when Labour is in Government, this isn’t National’s fault. Bill English says so. It’s all down to a whole lot of unusual and unpredictable events outside Penn and Teller’s control.

Interesting to see where the forecast tax revenue is (or isn’t) coming from.

Core tax revenue was $97 million below forecast due to lower than expected goods and services tax and personal income source deductions, though that was partly offset by a bigger take from corporate taxpayers and strong provisional assessments in other individuals tax.

Expenses were $118 million higher than forecast at $23.98 billion, due largely to the $103 million indemnity deed for Solid Energy to preserve the miner’s balance sheet.

When English was “abracadabra-ing” his surplus the much maligned David Cunliffe said this

Labour leader David Cunliffe began by taking aim at the surplus, designating the Budget a “Fudge-it Budget” because of the creative accounting needed to achieve a surplus. Spending was delayed on the Christchurch rebuilding, ACC levy reductions were held back for a year, and Auckland roading projects were funded by interest-free loans rather than spending.

“National calls the Fudge-it Budget ‘steady as she goes’. Steady as she goes all right – just do not ask where she is going.”

Winston Peters put it, in his usual way, succinctly with barbs. It is worth a read.

“Just don’t ask where she (economy) is going, it turns out we didn’t have to wait long to see.

Look? Len Brown had an extra marital affair!!!!!!

 

31 comments on “Fudge-it-Budget ”

  1. lprent 1

    National’s spinners are so good about the diversions suitable for kids with attention deficit disorders.

    It is a pity that so many of those kids wind up becoming journalists reporting in the media…

    Oops. Did I say that?

    • Tom Gould 1.1

      It’s not “National’s spinners” who are the problem, everyone spins, it is the lazy craven Tory chooks in the Gallery who are donkey deep embedded in the Tory spin machine, who are the problem, corrupting both their own profession and politics at the same time. The public doesn’t stand a chance.

      • lprent 1.1.1

        I don’t think that it makes that much difference. I’d just prefer that they used their own brains and their own knowledge to separate the clouds of chaff from the kernel.

        But generally we don’t seem to educate journos all that well.

        It is a revelation when you read one that actually can think and has done enough study to know what they are looking at…. Brian Fallow, Fran O’Sullivan, Colin James, and a few others. A few in the gallery..

  2. Puckish Rogue 2

    Since you’re referencing Penn & Teller you may be interested in watching some of their programmes

    http://en.wikipedia.org/wiki/List_of_Penn_%26_Teller:_Bullshit!_episodes

    They’re very funny and have a go at everyone

  3. ghostwhowalksnz 3

    Core Crown residual cash deficit is $2.2 Billion

    Ie thats before credit card is pulled out .

    And regarding radio spectrum sales, I wonder if English has been lending money on the sly so the media giants can “buy” their spectrum like they did some years ago for the TV3 radio group

    And you got to love this one.
    Environmental protection: + $121 million $103 million of this relates to the Crown’s signing of the Deed of Indemnity with Solid Energy.
    pg 9 Financial statements

    Thats right bailing out a coal miner is lumped under Environmental protection

    So thats how we get a “green” national government

  4. ghostwhowalksnz 4

    It gets worse : Some of that ‘indemnity” is for Pike River !

    Talk about playing politics by dancing on the graves of dead miners- where the family dont have any grave to speak of.

  5. Poission 5

    Core tax revenue was $97 million below forecast due to lower than expected goods and services tax and personal income source deductions

    There are two parts that are of interest,the first being a decrease in consumption tax due to increased interest rates and falling oil prices.

    The second being a decrease in paye source deduction due to decreased payrolls (read zero or less wage increases out to 2018) which is at odds with the spiel of increased jobs growth.

    http://www.treasury.govt.nz/budget/forecasts/prefu2014/013.htm

    • ghostwhowalksnz 5.1

      What increased interest rates ?

      The fall in gst from petrol sales, this is for the October year, so was it bit early for the big falls in petrol prices in the last 6 weeks

  6. Philip Ferguson 6

    Low pay, longer hours, less tea breaks and more crap; welcome to 21st century NZ capitalism: http://rdln.wordpress.com/2012/02/08/low-pay-longer-hours-and-less-social-mobility/

    • tracey 6.1

      But.. But… But… If only people would let us finish what we started, the trcikledown would start…

      Signed

      Roger douglas
      Ruth richardson

  7. Nick Morris 7

    Yes, there is plenty of live ammunition here.

    Andrew Little will have to find a balance between being the reasonable bloke, concerned about the battlers and the principled critic of laissez-faire capital exploitation and lazy, self-serving Tory politics. Anger and logic in equal measure. We look forward to his efforts in the next few months.

  8. tracey 8

    The government has done little to garner credit for good economic management because it never controlled dairy prices or tectonic plates. Sadly so much damage has been done and will be done before the duped voters get a chance to show their mettle

  9. Tom 9

    The one statement I do not hear people talk about is 100 Billion in the RED.
    All this few million here and a few million there BALANCE THE BOOKS ……….. The Question is and Should BE………….. Where is the 100 BILLION John…………….

    This question will flush out all the decoy economics……………. NZ has been ripped off. 250,000 kids are in poor shape ….. wages can not cover expenses for 40% of the population. The Environment is being sold off to the highest bidder………..

    National does not care about everyday NZers ………………. I say again …………
    WHERE IS THE 100 BILLION JOHN…………… HOLD THE GOVERNMENT ACCOUNTABLE.

    • tracey 9.1

      What 100 billion are you referring to?

      • Barfly 9.1.1

        Government debt?..I suspect

      • Tom 9.1.2

        National Debt……………….

        • Naturesong 9.1.2.1

          Talking about public debt – with is currently in the mid 90’s (38% of NZ’s GDP), with net public debt being about $20b less than that.

          Bruce Besset’s article just prior to the election gives a good precis of the issue.

          The other part of the debt story is New Zealands net foreign debt – this is the one that no ones talks about, and should be mentioned every time the current account deficit figures are quoted.

          The wikipedia article on the <Economy of New Zealand also provides a easy to understand summary

          The New Zealand economy has recently been perceived as successful. However, the generally positive outlook includes some challenges. New Zealand income levels, which used to be above much of Western Europe prior to the deep crisis of the 1970s, have never recovered in relative terms. For instance, the New Zealand nominal GDP per capita is about 80% that of the United States. Income inequality has increased greatly, implying that significant portions of the population have quite modest incomes. Further, New Zealand has a very large current account deficit of 8–9% of GDP. Despite this, its public debt stands at 33.7% (2011 est.)[67] of the total GDP, which is small compared to many developed nations. However, between 1984 and 2006, net foreign debt increased 11-fold, to NZ$182 billion, NZ$45,000 for each person.[22]

          The combination of a modest public debt and a large net foreign debt reflects that most of the net foreign debt is held by the private sector. At 31 June 2012, gross foreign debt was NZ$256.4 billion, or 125.3% of GDP.[68] At 31 March 2012, net foreign debt was NZ$141.65 billion or 104.4% of GDP.[69]

          New Zealand’s persistent current-account deficits have two main causes. The first is that earnings from agricultural exports and tourism have failed to cover the imports of advanced manufactured goods and other imports (such as imported fuels) required to sustain the New Zealand economy.[citation needed] Secondly, there has been an investment income imbalance or net outflow for debt-servicing of external loans. The proportion of the current account deficit that is attributable to the investment income imbalance (a net outflow to the Australian-owned banking sector) grew from one third in 1997 to roughly 70% in 2008.[70]

          While I was largely supportive of Micheal Cullen’s tenure as finance minister (he’s the sort of conservative centre right finance minister that I would be ok with in a National government), it’s this that really grates: “Despite this, its public debt stands at 33.7% (2011 est.)[67] of the total GDP, which is small compared to many developed nations. However, between 1984 and 2006, net foreign debt increased 11-fold, to NZ$182 billion, NZ$45,000 for each person.”

      • seeker 9.1.3

        hi tracey @ 1.57pm
        can’t give you the link as i can’t figure this pad out but i just put in ‘national debt clock 2014 nz ‘ and wait for my hair to rise in shock….

    • Chch_chiquita 9.2

      When asked the National will answer there was a GFC and ChCh earthquake and it is only because of the amazing financial literacy of this Govt that we are ONLY 100B in the red. If it was Labour we would have been worse off. Don’t expect to get any real answers.

      • Tom 9.2.1

        They can say that all they like but the numbers don’t add up …………. it is a matter of record what has been spent and its nowhere near 100 Billion. I do expect to get real answers and if we had honest media (not foreign corporates) this would be the case. Once we allow the media and a corrupt Gov to get away with it were buggered………..

  10. aerobubble 10

    Dairy boom, green and fiscal debts. By not passing on the cost of carbon, unlike its competitors who had to pay for xarbon, Key soften us up for a farming debt crisis.

    Key goes into his last question time and declares he does not understand that high housing costs, poor availability harms economies of scale. Expensive homes, high rents, longer travel times, saturated roads, all harm the ability of aUckland to sustain the rising numbers return to NZ.

    Are you sure Key is a good ,anager of the economy?

  11. Tracey 11

    because house prices in auckland are out of control interest rates will go up not down. wouldnt down be more helpful to farmers with loans?

  12. Andrea 12

    Tax take down?

    Could lightning strike twice?

    ‘The government has passed under urgency, with the total endorsement of ACT, a 2.5% increase in GST to take effect just in time for the start of the 2015 school year’.

    ‘Just temporary, people! You know we have to pay the bills like any household would.’

    Yeah. Right.

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