Jarring

Written By: - Date published: 2:03 pm, April 29th, 2009 - 49 comments
Categories: labour, national/act government, tax - Tags:

Today Phil Goff’s question to Key is:

“Does he agree with the statements in the House by his Minister of Finance on 16 December 2008 that ‘Yes, I can confirm that National will not be going back on any of those promises, as we fully costed and funded them’?”

His angle is obviously going to be that National hadn’t really costed its tax cuts, they were just hollow promises to get into power, and National’s dropping them is a betrayal of the voters’ trust. Which is all true.

But the problem is that Labour opposes those tax cuts. It’s pretty disingenuous to then go and criticise the government for dropping them (yes, even though National made disingenuous attacks regularly, even though there’s a neat angle). It just jars too much to succeed as a meme when it’s coming from Labour.

The other problem is that Key will simply respond “we’re in a crisis, we’ve got to do the responsible thing”. The polls show voters already understand tax cuts are unaffordable. Far from looking like Key’s betraying the voters, Labour is just inviting him to look pragmatic.

This should be a good period for Labour – National’s handling of the economy has been abysmal, there’s a Black Budget coming which will give Goff a chance to lay out Labour’s alternative vision, and there’s the supercity issue – but they’ve got to get their act together.

49 comments on “Jarring”

  1. vto 1

    “The polls show voters already understand tax cuts are unaffordable.”

    ffs, household cuts are unaffordable too!

    So which should suffer first / most? Household or state? It is clear most here consider the state to be more important. All hail the great state!!

    Bizarre.

    p.s. apologies for the threadjack/tangent

  2. r0b 2

    It’s pretty disingenuous to then go and criticise the government for dropping them

    I agree that it would be a big mistake for Labour to criticise the Nats for dropping the tax cuts – it’s the right thing to do (sorry vto).

    However Labour could and should criticise the Nats for making promises that were obviously unaffordable – it was completely irresponsible, and National are going to pay the price in backlash from their more loony supporters.

    • Craig Ranapia 2.1

      Rob:

      If you want to go there, I think Labour were making a hell of a lot of spending promises that would have turned out to be utterly unaffordable. So take the shot, because its not entirely unfair. I’m just suggesting that there’s more than enough to go all the way around.

      Therese Asenau frequently says that people have a stronger grip on basic economic reality than politicians the media often give them credit for. Policies don’t happen in a cloud of perfumed unicorn farts while elves plant the magic money bushes.

      • Pascal's bookie 2.1.1

        The supply siders say otherwise, 37.9 percent reckon the cuts should go ahead polls say. Who do you think they voted for?

  3. It does seem like Labour is coming up with some silly questions in the house. Often the best question is a simple and straightforward one.

    “Does the government intend to go ahead with their planned tax cuts? If not, why not?”

    “Does the government intend to undertake a referendum on the Super-City issue once a final piece of legislation has been put together? If not, why not?”

    FFS keep it simple.

    • Chris G 3.1

      they’d answer the first of your questions with: “blah blah blah, (for the millionth time if it hadnt been for the economic mis-managment of the previous government then we could continue with them.”

      Thats the template answer I see everytime I bother to bore myself looking at the Q & As of the day. No doubt that will be the template answer for the next three years for any question that gets them in a bit of a pickle.

      Yawn.

      • r0b 3.1.1

        if it hadnt been for the economic mis-managment of the previous government then we could continue with them.

        Yes they will use that excuse, and they will use it knowing full well that the previous government did a good job, according to Treasury, the IMF, and even the National party.

  4. Kevin Welsh 4

    Yeah, just look at the answers we get from Gerry Brownlie these days.

  5. Pat 5

    Does Goff have an alternative vision? Because I haven’t seen him laying one out.

  6. vto 6

    Why not tighten up the requirements for answering questions? Wilson was useless with the whole “address” the question toiletries. Now it isn’t much improved.

    You would think the politicians would go for it as it is something the public would be happy to see, namely proper answers to the questions. Perhaps the politicians don’t realise how angered the people become when they see these buffoons deliberately not answering the questions. The people simply see them wasting their hard-earned tax dollars to joke around and act like pusnuts in the house. It is one of the main reasons politicians are held in such low regard.

    Tighten it up. Make the bastards answer the questions properly.

    • vto 6.1

      oops, wrong threadage

    • BLiP 6.2

      Was Lockwood in the Chair today? I thought he was going to sort this shit out. He certainly got off to a good start. Has anyone seen him in action lately?

  7. This should be a good period for Labour – National’s handling of the economy has been abysmal, there’s a Black Budget coming which will give Goff a chance to lay out Labour’s alternative vision, and there’s the supercity issue – but they’ve got to get their act together.

    I think their current plan is to sit back and wait for the electorate to ‘come to our senses’ and vote them back into the treasury seats which are so rightly theirs. The ‘getting their act together’ bit isn’t going to happen until they get annihilated again in 2011.

  8. Eddie 8

    Goff was damn good just now talking about the supercity in the general debate, and it turns out he did table the newspapers yesterday. Unfortunately, the journalists aren’t watching by this time

    • Graeme 8.1

      All of them? Or a single copy of each?

      • Eddie 8.1.1

        He just said to the speaker they he had tabled them. Yesterday Goff said: “I seek leave to table the front page of every community newspaper in Auckland…To clarify the point, I am seeking leave to table an identical front page in every suburban newspaper in Auckland.” he was referring to one of each paper, that’s the clear and normal interpretation of his words

        • Graeme 8.1.1.1

          The uncorrected Hansard transcript:

          Hon Phil Goff: I seek leave to table the front page of every community newspaper in Auckland that ran the view that the Government was adopting a bullying approach—

          Mr SPEAKER: The member knows that the House takes a dim view of the tabling of newspaper articles. He sought leave to table the front page of every community newspaper. That would be a difficult challenge for him, because under the Standing Orders he must do that if leave is granted. If he raised that point of order purely to try to inject the comment he injected, that is out of order. The House will come back to order. I will put the leave he has sought, but I do not want to see the Standing Order abused.

          Hon Phil Goff: Can I speak further to the point of order, Mr Speaker? If a question is asked where I legitimately quote accurately the views that are expressed in the media, and the Prime Minister said, no, far from saying that, they said something else—in other words saying that the original quote was wrong—

          Mr SPEAKER: The member is bringing the substance of a debate into a point of order. The Standing Orders are very clear on how members should seek leave to table documents. I am merely pointing out that it is not acceptable to use that Standing Order to make a political point. The Standing Order is available for the tabling of documents. The member has sought leave to table the front page of every community newspaper in Auckland. If leave is granted, he will do that. Leave is sought to table the front page—

          Hon Pete Hodgson: I raise a point of order, Mr Speaker. The leave that was sought was to table the front page of every community newspaper in Auckland that had stated that the Government was acting in a bullying capacity.

          Mr SPEAKER: Because it has been alleged that I misrepresented what the member sought leave for, I ask whether the member agrees that he is seeking leave to table the front page of every community newspaper.

          Hon Phil Goff: To clarify the point, I am seeking leave to table an identical front page in every suburban newspaper in Auckland.

          Mr SPEAKER: Leave is sought to table the front page of every suburban newspaper in Auckland. Is there any objection to that course of action? There is no objection. Those front pages will be tabled before the end of this sitting.

          • ripp0 8.1.1.1.1

            Hi Graeme,

            Thx for the transcript.. Can you assist me understand the following Speaker’s point — Mr SPEAKER: The member knows that the House takes a dim view of the tabling of newspaper articles.

            How long has this been the case.. or is the fellow expressing a personal opinion..
            (somehow it doesna look right for a Member to seeking table material that he knows the ‘House” holds a dim view of..

            Also if you wouldn’t mind.. is there an online link to the Hansard for such material matter..?

          • BLiP 8.1.1.1.2

            Thanks, again!

            Stupid me had thought Goff had bungled the procedure but, actually, he got what he wanted. Just goes to show,

            NOTE TO SELF – check whatTrevett says.

            Sorry, Phil.

        • Graeme 8.1.1.2

          At the end of each Parliament, the Standing Orders Committee reviews how the standing orders are working and makes recommendations – usually unanimously – for improvement, which are adopted in changes to the standing orders as one of the last things the House does (they do it at the end of a Parliament so that the Government is less likely to ram through changes to advantage it – contrast this with the US House of Representatives).

          The review at the conclusion of the last Parliament (available here)noted disquiet among MPs with the amount of House time taken pointlessly seeking leave to table this newspaper article or that – at the end of every oral question, whichever newspaper was be quoted from to show the minister (or opposition spokesperson) was being hypocritical or stupid or whatever would be sought to be tabled. Leave would be generally be denied, particularly if a great political speech came along with the leave request (I seek leave to table this newspaper article that shows the government is blah blah blah), and it was just generally annoying that it all happened so often.

          The rationale behind the tabling of a document is that it is made available for the members of the House to inform debate, etc. and when the process was being used to try to table newspaper articles everyone had already read it was all a bit of a waste of time.

          Anyway, the review noted this, and while not banning the practice (they want people to be able to table things) noted that it was supposed to be used to inform the House. They also added a requirement that when leave was sought to table something, it actually had to be tabled (as members were using the process of seeking leave to score their points, and then not bothering). Thus, with the House’s acceptance of this review, the Speaker has something to point to whenever someone tries to table a newspaper article.

          The transcripts of question time are made available here – http://www.parliament.nz/en-NZ/PB/Debates/QOA/ – generally at around 6pm on the same day.

          The rest of Hansard is made available here – http://www.parliament.nz/en-NZ/PB/Debates/Debates/ – but it takes a little longer.

          • ripp0 8.1.1.2.1

            muchos gracias senor!

            in a nutshell members ought table material to inform Members, and for real..

            which would suggest that any Member insisting on so-tabling has either done so (for real earlier) or intends doing so..( validating the Speaker’s point re absence )

            in say the event of a Speaker’s unwitting ignorance as to the provision or not I wonder whether an apology to a Member – public or private – would be in order…

            just wondering, answer welcome tho unnecessary 🙂

  9. Eddie

    I think that criticism of National for dropping the tax cuts previously promises is entiurely appropriate.

    They knew then that the world economy was sliding and there would be pressure on Government funding. They criticised Labour continuously for not giving tax cuts. Now they are acknowledging that the decision by Labour was the right one.

    So IMHO National can be criticised for making a promise it knew could not be kept and for breaking that promise. What is wrong with that?

    It really is a matter of trust.

    • Bevanj 9.1

      Nats can be trusted to give tax cuts when able, Labour can be trusted to offer election bribes like interest free student loans and a planned tax cut after 9 years.

      • BLiP 9.1.1

        Yeah, right.

      • Jungle Feaver 9.1.2

        Bevanj:

        Whether you like it or not National’s tax cuts were election bribes.

        • Jared 9.1.2.1

          All election promises are bribes of sorts are they not? Hell, Labour even promised to introduce a universal student allowance if re elected, and that wasn’t a bribe? Just like interest free student loans in the past….

    • aj 9.2

      Labour need to get across where we would be had the Nat got their way with tax large personal cuts instead of surpluses held and debt paid over the last few years. They need to expose the hypocrisy of their current postion. Of course this is not an easy task with media looking for simple explanations. At least Garner summed up Cullen’s legacy more or less correctly tonight.

    • Jared 9.3

      I disagree, when Tax Cuts were promised in 2008 no one was prepared for the impact of the economic land slide that has subsequently occurred, no one. So to allege that National knew it couldn’t keep their promise is patently false.

      • mickysavage 9.3.1

        Jared

        Sorry but for the past two years the news has been absolutely full of economic crises. Remember peak oil and the spike in oil prices? Can you recall that the subprime mortgage problems were already rolling then?

        Remember Michael Cullen saying that any further fiscal stimulus over the 2008 budget was irresponsible? Boy was he right.

        I and about 1 million followers of economics and left wing commentators were prepared and predicting it.

        • Jared 9.3.1.1

          Peak Oil had nothing to do with the current economic crisis, what it was down to was how exposed businesses were in the current debt market (the spike in oil prices wasn’t down to peak oil, it was down to speculators pushing the price up regardless of demand, OPEC has cut production dramatically). We knew after Bear Stearns collapsed that more were to follow and that more banking institutions needed to write down asset revaluations, but the impact was certainly unclear. It only really came to a head in september, but even then the impact on the relatively detached NZ Market wasn’t clear. We had little exposure to the subprime mortgage problem (bar a couple of Australian banks who had minor write downs), what really hit our market was the lack of credit. Michael Cullen was naturally cautious about any inflationary behaviour because of the Labour Governments policy of tackling inflation head on with a two pronged attack by both the treasury and the reserve bank.

          • mickysavage 9.3.1.1.1

            Peak oil has absolutely everything to do with the current crisis and this wonderful world that we live in will never be the same. Oil prices shot up to US$150 per barrell at the peak of economic activity because the world was using so much and the brakes were then applied really hard. Oil consumption then went down so that the expensive sources were no longer required but when the cheap sources dry up those expensive sources will then again come into play.

            Some families in the US found they could no longer pay their mortgages because they were spending so much on fuel and they folded, taking many banks down with them. The whole system was leveraged that much that a slight gust of wind created a hurricane.

            Sorry but you are looking at the end results without understanding the causes.

          • BLiP 9.3.1.1.2

            Peak oil had nothing to do with the economic depression? WTF!

  10. aj 10

    National election talk: No ifs but or maybes. Costed. North of $50.

    Now in 2008 an economic slide was fairly widely anticipated. To those who follow closely {that is, the opposite of the Dow 30,000 crowd} a significant downturn was expected. Economic modelling showed how vulnerable Labour’s surplus were to a downturn, how they would quickly turn to deficits. The surplus were not structural. National ignored all that and made promises they must have known they may not have been able to keep. If they didn’t know then they are not savvy enough to be in government.

  11. Jared 11

    Economic Modelling? All we had was circumstantial evidence from Cullen’s excuses as to why he couldn’t dol out tax cuts earlier, that he was saving the budget surplus for a rainy day. A downturn was expected, no doubt, but the impact and effect was far more substantial than expected. The PREFU stated this, and said even under the previous Labour management the economy was going to decline over the next 10 years. So I can hardly see how you can place the blame squarely on National. The modest approach would be to say that there was little either party could do, and that a decline in growth was to be expected.

    • Cullen did not want to give them because he did not think it was right to do so. Key promised them and said they were affordable. He now acknowledges that they are not and we cannot afford them.

      Why do some of the population think that Key and not Cullen should be in charge of the economy?

      • Jared 11.1.1

        Because, in the right market conditions tax cuts and a redistribution of the surplus would have likely had a positive effect on growth. Having a cautious approach towards the economy is fine if you are merely trying to control inflation. But considering the size of the surplus, it perhaps could have been more effective in better positioning us by encouraging growth than hoarding it for a rainy day. At the time the tax cuts were possible, yet the effect of the recession has been far worse than expected.

        • Pascal's bookie 11.1.1.1

          I remember when saint ronny ray-guns dished out the biggest tax cuts in history (at that point).

          All the supply siders messed their pants and the stockie market boiled.

          (there’s a parallel story about stagflation, what the fed was doing under Carter’s appointee and how well that man got on with the Laffer nuts, but that’s a different story than this one, and that one’s the story of how the ‘malaise’ got itself undone).

          But back to the taxy talk re the cuttin’ and the growin’.

          What grew mostest was the deficit in the govt’s books (well durr). Grew so much Mr Ray-guns had to follow up his first term record breaking cuts with some record breaking hikes in his second term.

          ( How those hikes was distributed is yet another story agin, that one’s more like the grapes of unrequited wrath, the side effects of which a Mr Mark Ames could tell you about, in his book, ‘Going postal’). But the Taxi tale is waiting.

          Next up on the presidenting gig was Bush the-less-nutty. He had to hike the taxes yit agin see, in his first and only term. Shit, there is starting to look like something’s wrong with the paradigm here dunnit? All these goppers havin to raise taxes.

          Never mind, here comes a demoncrat, by the name of Bubba. He does some more tax rasin see, and finally the ‘murcans gits themselfs a surplus. Bit of a boom occurs, low inflations thanks, and pay as you goes and all looks sense-i-full for a whiles with regards to the tax accounts. strange american bookeeping not wifstanding.

          Now comes bush the-lots-nutty-thank-you-very-much. He runz on the ‘cuttin of the taxes because a surplus is thefty’ line and wins big. Well, wins in court after mucho american style shenanigans, but no mind. He wins.

          Not his fault but the dotcom goes pops and with it the surplus what now becomes a deficit again, but not a huge one. Doctor McNutjob prescribes the laffer cure of tax cuts that fund themselves through faster growth, bye bye pay as you go. Deficit goes upwards.

          Dick Cheney (who’d appointed hisself as Mr VP go forth and torture branch) says, from his undisclosed tomb in an alternate universe, “Mr Ray-guns proved deficits don’t matter”. So more tax cuts for the ritchies, it’s good for what ails ya, if what ails ya is having a functioning gummint.

          And all lived happily ever afters, apart from all the dead people, and the ones that have had their life savings destroyed and those as yet unborn that will be picking up the tab. Huzzah! Thanks supply side fruitloops!!

          Now you may think some of the above is fanciful and unfair, with unsubstantiations and and the like. You may be right, you may not but you can’t complain, cause you started it.

          • ripp0 11.1.1.1.1

            Pb,

            have to admit to a big smile at your “Mr. Ray-Guns”.. reminescent as it was also of an Texan actor – Billy-Joe ? (can’t recall surname) in the DVD movie “The Edge of Darkness”. Movie-making in the Brit grit style, but only Billy could have delivered the conference punchline on Ray-Guns starwars deal back then.

            PS; If you haven’t seen this movie and have time and opp do so I’d recommend it..

    • Jared 11.2

      Oil consumption has dropped in some countries, thus demand has dropped, but the resulting price readjustment was down to more than just a drop in demand. Oil Speculators needed only 5-15% of the contract price to secure a futures contract and with significantly more responsibility for losses and less availability to funds, traders have almost all but stopped hedging on futures contracts. Futures trading alone was by far the largest factor behind the excessive pricing at the pumps. Prices peaked in June/July and dropped dramatically around the financial crisis in August/September (http://www.inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp). Demand as you said dropped, not supply, yet peak oil assumes that demand exceeds supply and that free market economics increases prices to match dwindling supply. I still fail to see how “peak oil” is entwined in the financial crisis, considering economic trends have largely been disproving it as a theory. Infact, during 2008 supply far exceeded demand. Logically for prices to be impacted by supply, demand would need to exceed supply, which clearly was not the case. If anything, the financial crisis realigned pricing to a more reflective price. Considering supply already exceeded demand, the reduction in demand if anything showed excessive supply capacity.

  12. ThrustLabour 12

    Cullen sabotaged our economy by over-spending by $4.5 billion in the last budget, going to the extent of touting there was nothing left for national to do anything with, and still dickeysavage claims he was a financial genius (which gives us some insight into how clever you really are dickey – but for clarification we could measure it accurately against two short planks).
    National paid down far more debt in the 90’s so by that yardstick they’re clearly the real heroes. Spin it how you like, Cullen has left us in a terrible mess.
    The majority of the public back this government to do the right thing, even if it does mean breaking an election promise. We know it has to be done, we know it’s the right thing to do, and we support National’s decision to do it.
    Crying from the left that it is backpedalling on an election promise only shows how loast and desperate you are.

    [lprent: Assessment for troll status…
    Some attention to spelling is called for.
    Actually providing some links would also be useful with respect to the debt.
    Verdict – simple fool]

    • Zaphod Beeblebrox 12.1

      The mere act of the government going back into surplus isn’t going to rescue the NZ economy. It will do little for our current account deficit and it will increase unemployment. Unless creative ways to improve productivity, creativity and export innovation are developed, NZ will stay 23rd in the OECD. Sacking a few public servants is not going create anything. Lets see how far Fiji’s economy develops after doing this.
      The World Bank in the 80s and 90s tried this approach in African countries time and time again and produced economic disaster after disaster.

      • Steve Withers 12.1.1

        The fascinating thing about all this is that much of NZ’s deficit is composed of money borrowed by private businesses: banks, whomever. If there is innovation and investment to be done, (and these are the people usually telling us it needs to be done), you’d think they would be doing it…..

        The reality is that some are, but most aren’t. They want someone else to do it so they can import it and clip the ticket. “best practice” is often a euphemism for sitting on your hands waiting to see how someone else innovated.

        The other tragedy of New Zealand business is that those who do innovate then tend to sell their businesses overseas…along with all that innovative IP they created. From that point onward, productivity improves by moving production offshore….so we end up importing what we innovated and used to make.

        For the past 25 years, we have not seen an NZ government that understands we are a tiny place far away from markets. If they understood that, they would not have allowed our industrial and creative infrastructure (mostly created behind tariff walls) to be run down and degraded as they have.

        Exactly where they thought the designers and engineers would come from after actually MAKING anything went offshore, I have no idea…and I don’t think they did (or do) either.

        NZ needs some mixture of openness and closedness. Otherwise, the situation we see today will continue to deteriorate as it has done since the day we decided to drop our pants in the global market….without reciprocity.

        As the scope of knowledge and experience across many sectors continues to shrink, the areas in which we might innovate shrink with it….and ticket-clippers carry on calling themselves “entrepreneurs” and looking down their noses at anyone who actually works for a living.

    • r0b 12.2

      Cullen sabotaged our economy by over-spending by $4.5 billion in the last budget

      Probably a good thing that he did. The economy needs a certain amount of stimulus to help ride out the current crisis, and against all international advice and precedent the National party has done nothing but sit on its hands. Without Cullen’s years of careful management and debt reduction (see above), and without the stimulus of his last budget, the recession (bad as it is) would have been even worse.

      • Bevanj 12.2.1

        The debt reduction was probably incidental as Labour couldn’t figure out how to bloat governance any faster.

  13. BunnyBrainz 13

    To be fair to Mr. Goff, Michael Cullen was warning National about their promised tax cuts as far back as 2007. In this story in the Sunday Star Times http://www.stuff.co.nz/national/6229 Cullen states “I think if one says the amount… then the risk is if the international situation worsens then you end up at Budget time sort of drawing back from where you were. If you talk to any minister of finance around the world they’ll all tell you the picture for next year is fairly uncertain at this point.” So now National are acting like this recession was sprung on them? I believe the idea of a possible downturn in economic cliamte was forecast well before the election, but National still went ahead with promising tax cuts they were never sure they would be able to fulfill..

  14. aj 14

    What Mickeysavage said.

    Jared, “in the right market conditions tax cuts and a redistribution of the surplus would have likely had a positive effect on growth”

    If you get the ‘right’ market conditions and give tax cuts, what do you do when market conditions are not longer right? raise taxes? or borrow and hope.

    “perhaps could have been more effective in better positioning us by encouraging growth than hoarding it for a rainy day”
    Have you forgotten are the billion $ business tax cuts Cullen delivered on to boost bussiness and growth. You and Cullen are on the same page.

    Yes tax cuts are always ‘possible’. but the piper has to be paid. Even Graeme Scott treasury acolyte said that spending cuts could only be made with a razor and not an axe.

  15. Pascal's bookie 15

    I think I’ve got a comment in moderation, which is fair enough, it’s not the queen’s english.

  16. I agree. the question is a pointy-headed one. The numbers have changed rapidly over the past few weeks and months. National’s December estimations would have been based on data from months prior. No longer valid for forward planning.

    Obvious to almost anyone…..except whoever composed that question. Is someone setting Goff up to look bad, or is he doing that himself?

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